Why diversity in the workplace makes good business sense
On May 22nd, World Day for Cultural Diversity, companies around the globe would do well to spare a thought for their own approaches to diversity. Niteco takes great pride in the diversity within its own staff, actively encouraging people from various cultural backgrounds, nationalities and genders to work together as part of worldwide teams. Niteco’s Sales and Marketing Team, a part of which can be seen in the picture above, is only one of them, boasting members from eight countries on four continents.
The commitment that Niteco and other companies display to the idea of diversity in the workplace is not just for outward appearances, either. In fact, it makes sense for a business to make its staff makeup as diverse as possible, as numerous studies have shown.
Here are just some of the ways in which diversity can help your business.
Better ideas for better outcomes
Especially in tech, innovation is everything. Being able to come up with new ideas that disrupt and revolutionize is the holy grail the IT industry strives for. And many have realized that bringing people from different backgrounds and with different ways of thinking together can give fuel to the fire of creativity.
In a landmark piece on cultural diversity, Scientific American wrote, “Diversity can improve the bottom line of companies and lead to unfettered discoveries and breakthrough innovations. Even simply being exposed to diversity can change the way you think.” Decades of scientific research prove the correlation between such success and diversity.
The article quotes US research that shows that, on average, in companies that are part of Standard & Poor’s Composite 1500 List, “female representation in top management leads to an increase of $42 million in firm value.” They also measured the firms' “innovation intensity” through the ratio of research and development expenses to assets. They found that companies that prioritized innovation saw greater financial gains when women were part of the top leadership ranks.
A researcher of the University of Texas at Dallas found that the same goes for racial diversity. Studying 177 US banks and the relation between their racial diversity, their focus on innovation and their financial performance, it became apparent that for innovation-focused banks, increases in racial diversity were clearly related to enhanced financial performance.
Diversity and engagement go hand in hand
For Millennials, diversity has a huge impact on the way they feel about their place of work. Data shows that Millennials working in places they consider to be culturally diverse feel more connected and engaged with their work, which, in turn, makes them more likely to help the business reach better results.
Research by Deloitte found that 83 percent of millennials are actively engaged when they believe the organization fosters an inclusive culture, compared to 60 percent actively engaged when they believe the organization does not have an inclusive culture. They also report higher feelings of empowerment (76 percent vs 61 percent) as well as higher levels of authenticity and comfort in expressing oneself (81 percent vs 59 percent).
Diversity is good for your bottom line
In the end, businesses have to keep their eye on their bottom line. And diversity can play a major role in that aspect as well. Research by McKinsey and Company found that more diverse companies are more likely to have financial returns above their national industry medians.
The study, which examined 366 public companies across industries in Canada, Latin America, the UK and the US, showed that companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians, while the same number for gender diversity is 15 percent. Good reasons to think about the makeup of your staff, we think.