Diversity has been a buzzword in human resources and recruiting for the last few years. With social causes and equal rights rising to the forefront of the news, companies are now focusing hiring efforts on creating and nurturing diverse teams. Besides the obvious that every job applicant should have an equal chance of landing a job, why is diversity essential, and what positive impacts does it have for a business? There are numerous advantages to having a diverse team, including increased innovation, employee retention, profitability, and more.
What is Diversity in the Workplace?
Diversity encompasses a slew of factors. In the workplace, this equates to a team of employees with different personal characteristics and come from different walks of life. Some of these factors include…
- Gender Identity
- Sexual Orientation
- Political Beliefs
- Socioeconomic Status
These are just some of the attributes that are considered when assessing a team’s diversity.
The benefits of a diverse team are bountiful. Not only do the benefits have a positive impact on the employee experience, but the benefits also positively impact business. However, challenges may arise when fostering diversity in the workplace which we will also cover.
1) Innovation and Creativity
One of the most eye-opening results of having a diverse team of employees is the increase in innovation. One study from Boston Consulting Group found that businesses with diverse management yield a 19% higher revenue because of innovation. Innovation and creativity flourish when different opinions, thought processes, and experiences mesh together. This allows for more intriguing brainstorms and new ways to problem-solve, both of which are vital for innovation. For companies that thrive off innovation, such as startups, diverse teams can be integral to their success.
2) Attracting and Retaining Talent
Businesses are consistently searching for ways to attract and retain top talent. That’s one of the reasons why Google offers complimentary breakfast, lunch, and dinner to its employees every day and why Facebook has an on-site barbershop and dental care. Having a diverse network of employees is another way to attract top talent. This is because companies with a more diverse employee makeup are more likely to allure more diverse job seekers. For example, if a company does not have an ample amount of women employees, women will not want to work for the company. Thus, the company misses out on top female talent. Companies are becoming increasingly creative with the benefits and perks they offer in hopes to impress candidates, but having diverse employees is a perk money cannot buy.
3) Greater Profitability
The main goal for businesses is to make money and turn a profit. Therefore, it’s in a company’s best interest to have diverse employees because diverse teams lead to greater profitability. According to a study conducted by McKinsey, businesses with gender-diverse executive teams garner 21% more EBIT, which is earnings before interest and taxes. Furthermore, racially diverse executive teams experience 35% greater EBIT. Companies should be investing in diverse employees and hiring practices to ensure they are achieving the largest profitability as possible.
4) Improved Public Image
With inclusivity, equal rights, and fair representation becoming daily headlines, the general public is increasingly preferring to engage with companies that are diverse and have diverse marketing campaigns. Consumers want to support brands that reflect their values. Additionally, there is greater transparency and more resources for consumers to identify which companies are genuinely diverse and can therefore hold companies accountable. Thus, companies that employ a more diverse workforce can expect to reach a larger consumer audience, which equates to greater profits and a better public image.
5) Fostering Diversity
Having a diverse team is excellent; however, some companies fall into the trap of hiring diverse candidates to meet a specific goal or quota. Furthermore, companies may have a diverse workforce but do not offer support services for employees. This can lead to numerous adverse outcomes. To avoid the negative consequences, companies should have resources and processes in place that aid diverse employees. Resources can include bringing in guest presenters to educate employees on inclusion in the workplace, creating committees that focus on diversity and inclusion, implementing equal pay, recognizing holidays from different cultures, offering training programs, and more.
At eNamix, we understand the difficulty of reaching diverse candidates. Furthermore, we know the challenges of hiring diverse candidates, as most U.S. states outlaw companies from explicitly announcing a demographic preference, even when intentions are positive (such as increasing diversity in your business). If your company is looking to hire and diversify your teams, eNamix would love to talk with you. We can help your team secure top talent with various experiences and from different backgrounds. Contact us today at firstname.lastname@example.org to set up a consultation with one of our senior account managers.