As technology evolves, it has become easier and faster for businesses to interact with vendors, customers, and employees throughout the world. Today’s businesses have become more globalized and, thus, they operate within a diverse marketplace. As such, it is important for a business to embrace diversity. Hiring and retaining a diverse, inclusive workforce allows a company to reflect the global market and makes your team better to develop products and services that meet the needs of the entire marketplace.
Savvy companies are maximizing their profits in a diverse, globalized market by investing more in diversity. If you recruit only those that are within your neighborhood, you limit your access to the insights, experiences, and worldviews of the global market. Make an effort of employing a diverse set of employees and you will go places. Below are seven benefits of diversity in today’s workplace:
Increased creativity and innovation
Companies that recruit a diverse, inclusive set of employees have the ability to develop creative ideas and methods for solving problems. The more a company brings together individuals with different cultural background, the more it is stimulated by different perspectives and ideas.
Bringing together employees with different experiences, qualifications, and background improves problem-solving in the workplace. A diverse workforce breeds creativity and innovation. Of 321 global enterprises surveyed by Forbes in 2011, over 80 percent agreed that diversity was instrumental in fostering innovation in the workplace. The more ideas an organization can obtain from its diverse set of employees, the more likely it is to develop an outstanding brand.
Bringing together a diverse set of employees can bring about an increase in productivity. In a diverse workplace, employees can offer more creative and innovative solutions to customers by sharing new ideas and perspectives. In turn, diversity at workplace increases employees’ morale and desire to work efficiently. Again, diversity in leadership makes it easier for managers to bring in new skills for achieving the corporate goal. Studies show that foreign executives working in the United States tend to be extremely successful due to globalization. Experts from India and China benefit the U.S. with their stellar quantitative skills in engineering and medicine respectively.
Potential employees are more drawn to companies that embrace diversity. Job seekers want to join companies that will treat them fairly irrespective of their ethnicity, race, and gender. Not only do such companies attract new talent, but also retain existing talents, especially when all employees are treated fairly. Days are gone when top talent was represented by a homogenous group. Instead, it is represented by a set of employees with different experiences and background. By appreciating all employees irrespective of their background, race, and experience, your reputation in the business community is likely to improve. Other professionals and stakeholders will view your company as an organization that values business ethics. In today’s business world, reputation is based on far more than the quality of products and services and financial performance.
Today’s large global enterprises benefit from language diversity. For example, a company with workers fluent in Portuguese and who understand Portuguese culture do not strain when communicating with representatives from Portugal. Likewise, a Chinese company may hire employees that are fluent in English to increase its reputation in Chinese communities. As companies expand into European, Asian, and American markets, they need to learn different languages. As such, a diverse set of employees will help a company thrive in the international market.
Finding a replacement when employees leave your company can be extremely expensive. In many cases, employees quit due to lack of diversity and compensation. As communities become more inclusive, turnover rates could increase; therefore, make an effort of creating a diverse and discrimination-free workplace. For you to reduce turnover rate, create internal mechanisms of listening to employees and appreciating their efforts through compensation and benefits. As such, you not only support diversity but create a cohesive and more focused workforce.
Increased market share
With a diverse workforce, a company can effectively market to different consumer groups irrespective of racial and ethnic backgrounds. Studies show that a diversified workplace is instrumental in increasing the market share. A recent study conducted by sociologist Cedric Herring found that companies with high level of racial diversity generated nearly 15 times more revenue than those with a low level of racial diversity. Companies with a high level of diversity are likely to generate $664.3 million in average sales compared with $45.2 million for companies with a low level of diversity.
Human capital grows as more racial and ethnic minorities, transgender, and women enter the workforce. For example, an increase of women in the labor market in the United States has resulted in a significant growth of the GDP. During the industrial revolution, companies with a high level of diversity developed a rate of economic growth that far outpaced the ones with the lowest diversity. The gap in per capita GDP between the highest and lowest diversified companies increased from 3:1 in 1820 to 18:1 in 2000.
Competition for top talents has increased over time. Recent studies indicate that diversity can help a company gain a competitive edge. Diversity is an important aspect to job seekers when evaluating job offers. Chances are that a job seeker will choose a diverse workplace over a homogenous workplace. You are likely to hire the brightest candidates in the labor market if you make an effort to bring together candidates with different background and experience.