What are the impacts of diversity in the workplace?

There are various impacts of diversity in the workplace. Diversity in the workplace refers to a company that intentionally employs a workforce that includes a range of characteristics, such as gender, religion, race, age, ethnicity, sexual orientation, education, and other attributes.

Diversity in the workplace leads to plenty of benefits - both internal and external perspectives. However, it doesn't mean implementing diversity at work doesn't have its own challenges. We'll see both sides of the equation in the sections below.

Benefits of diversity in the workplace

Having a diverse and multicultural workplace has several advantages. Since today's world is getting more globalized and interconnected, organizations should take advantage of the diverse range of skills individuals from different backgrounds and languages can bring. Few benefits of workplace diversity include:

• Increased productivity

A diverse workplace adds new ideas and inputs. This diversity of talent means a broader range of skills among employees and a variety of experiences and perspectives, which increases the potential for increased productivity.

• Increased creativity

As various cultures and backgrounds work together, the opportunity for creativity increases. This is because more people have different points of view and solutions to problems, allowing for a greater chance of a workable solution to a problem.

• Improved cultural awareness

A range of cultures within the workplace allows companies to deal with the different problems within a global marketplace. If a company does business with Japan, for example, having an employee who can speak Japanese is an asset and can lead to improved workplace relations.

• A positive reputation

Companies that have a mixed workplace are often perceived as better employers. Potential employees want an employer who is tolerant and accepting of all backgrounds and treats their employees fairly.

• Increase in marketing opportunities

If potential employees see that a company represents a mixed workplace, they feel like they can relate to the company. Using advertising which shows mature-aged, disabled, handicapped, or ethnically different people encourages applicants to apply, promotes a positive reputation, increases marketplace awareness, and generates a more diverse client-base

• Increasing adaptivity 

A broader skills base and more potentially various offerings of products and services can help a business have the competitive advantage of adaptability. In today's uncertain business environment, adaptable organizations are the ones that thrive. Adaptability refers to faster and more effective planning, development, and execution. A company with cultural diversity can be quicker to spot a gap in the market. It will also have the global insight and experience to help a new or adapted product meet changing consumer behavior and succeed.

• Great opportunity for personal growth

An inclusive business will attract talented, ambitious, and globally-minded professionals who will appreciate the opportunity for personal and professional growth. Working across cultures can be an enriching experience, allowing others to learn about perspectives and traditions from around the globe. Bonding over similarities and differences, abandoning prejudices and worldview. A diverse set of colleagues can be professionally enriching, too, as they expose you to new skills and approaches to work and develop an international network that can take your career in new directions.

How does diversity impact business?

Diverse work environments will likely boost profitability, culture, and public perception. Here's how diversity impacts business:

• Diversity Improves Company Performance

Companies with diverse workforces often outperform other companies. A study found that gender-diverse and inclusive teams outperformed their less inclusive counterparts by 50%. Companies with more diverse leadership teams report higher innovation revenue of 45%.

• Diversity Improves Employee Retention and Engagement

Morale, culture, and employee engagement thrive in diverse and inclusive workplaces. Workplace culture attracts turnover, significantly affecting the retention of underrepresented groups.

• Diversity Improves Public Perception of Your Brand

Diversity in the workplace affects various aspects of the business, including what prospective customers think of your business. It might not have been a problem a few years back, but today, people want to know who is behind the making of the product and who's involved in the service behind it. 

Challenges of diversity in the workplace and its solutions

There are few sets of challenges faced when the workplace is diverse:

• Aligning diversity practices with unique organizational goals

Implementing diversity in the workplace is a huge commitment, and there's no rulebook that you can borrow from other associations. Each company has its own unique set of goals. Your diversity practices must align with them to be successful, which means considering the specific culture you have in place and figuring out where you want to go and whether it matches your company.

Solution: conduct a diversity-focused survey that helps identify your organization's specific gaps, so you know where to focus your resources. Otherwise, you may make false assumptions and spend your time on initiatives that have less impact on the customers.

• Moving from design to implementation

One can design the most thoughtful and detail-oriented diversity program, but if there's nobody to carry them out, then it serves no purpose. That's why you need to make sure you have the team, support, and resources on board to move your diversity initiatives from design to implementation.

Solution: Having a dedicated resource and a team on standby, like a Head of Diversity and Inclusion, is a solid way to hold the business accountable for results. 

•  Training management

Diversity requires the cooperation of all employees and anybody working in the organization to be successful. In particular, managers are hugely influential in carrying these initiatives out. This is why it's important to invest in management training to help them understand the company's diversity goals, why they're important, and what's expected of them when they interact with the employees.  

Solution: There are many companies out there in the industry that can aid you in navigating diversity training. Seek help from them to make sure that your resources are in the right hands.

• Overcoming bias

Humans are biased, which is why people tend to bring bias into their everyday interactions, including in the workplace, even with the best intentions. 

Solution: Organizations need to invest in additional training dedicated to overcoming bias. While it's inevitable that bias will not enter the workplace, it makes a huge difference to at least be aware of common biases and have a foundational understanding of how to address and avoid them. 

•  Internal resistance 

Unfortunately, not everyone is okay with the idea of diversity in the workplace. Some people are just uncomfortable with having a diverse range of people working with them and will take time to adjust. But others may be opposed to the idea of intentionally building diversity in the workplace. 

Solution: While there is no previous solution to internal resistance, it's important to focus on moving people towards understanding, which means focusing on people who don't understand why it's important - not only those who do and make them understand the importance of the same. If you make it clear what your culture stands for and what your morals are, some employees may eventually realize that it's not the right place for them, or maybe they are not the right fit for your company and choose to leave. 

While local expertise is an asset, it's also important to foster the integration of various people among teams to avoid colleagues from different countries working in isolation and limiting knowledge transfer. Diversity in the workplace can be beneficial for companies and their employees.