20 Sep 5 Benefits of Diversity in the Workplace

Diversity in the workplace encompasses a wide range of characteristics and experiences that include; Race, ethnicity, gender, body size, age, sexual orientation, disability, education, and immigration status, etc.

Ensuring workplaces are diverse is important for a variety of reasons that make good business sense, let’s explore 5 of them below. 

1. Increased profits

In 2018, Salesforce’s CEO, Marc Benioff, made headlines when he disclosed that the company had been paying women and racialized employees a total of $8.7 million less than other employees.

CEO, Marc Benioff fixed the pay disparity and reported that doing so “has already begun to pay off in incalculable ways, and its benefits will continue to accrue for years. Already, our commitment to equality has helped land us the number one spot on Fortune’s list of best companies to work for, as well as the top spot on People magazine’s list of “Companies That Care” two years in a row. And it has contributed to our ability to attract the very best and brightest talent in the country.” (1)

Salesforce didn’t just increase employee salaries to do the right thing, they knew that companies with more diverse executive teams are 33% more likely to see better-than-average profits, according to a McKinsey & Company study. (2)

And a global survey of almost 22,000 publicly traded companies by the Peterson Institute for International Economics revealed that the presence of more female leaders in top positions of corporate management correlates with increased profitability of these companies. (3)

2. Enhanced Innovation and Creativity

A 2021 study by Boston Consulting Group (BCG) found that companies with more diverse management teams have 19% higher revenue due to innovation than companies with below-average leadership diversity. (4)

3. Improved Problem-Solving Abilities

A 2020 study by Cloverpop, found that “diverse teams make better decisions 87% of the time compared to homogeneous teams.” The study revealed that diverse teams are more effective at problem-solving due to their ability to approach challenges from multiple perspectives and generate more creative solutions. (5)

4. Better Employee Engagement and Retention

According to a 2018 study from Deloitte titled “The Diversity and Inclusion Revolution: Eight Powerful Truths:”

“Companies with inclusive cultures are 2.3 times more likely to experience higher employee satisfaction and are 1.8 times more likely to have better employee retention.” (6)

5. Enriched Company Reputation and Brand Image

People are more likely to buy from companies that recognize and value their unique backgrounds and stop buying from organizations that don’t. A 2021 survey by Google and The Female Quotient found that 64% of consumers are more likely to consider or purchase a product from a brand that shows diversity and inclusion in its advertising (7). According to a 2020 survey by Accenture, 41% of consumers have shifted at least 10% of their spending away from companies that don’t reflect their values on diversity and inclusion. (8)

In conclusion, embracing diversity in the workplace isn’t just the right thing to do; it’s a strategic advantage that can drive innovation, enhance problem-solving, and improve employee satisfaction. By fostering an inclusive environment, organizations can tap into a rich array of perspectives that lead to creative solutions and a stronger bottom line.

So, let’s commit to creating workplaces where every voice is valued and every individual can thrive. 

What steps will you take to promote diversity in your workplace? Share your thoughts in the comments below!

If you’re ready to start your DEI journey then contact Executive Diversity Services today.

https://www.executivediversity.com/contact/

Sources:

1. https://www.wired.com/story/how-salesforce-closed-pay-gap-between-men-women

2. https://www.piie.com/newsroom/press-releases/new-peterson-institute-research-over-21000-companies-globally-finds-women

3. https://www.insurance.ca.gov/diversity/41-ISDGBD/GBDExternal/upload/McKinseyDeliverDiv201801-2.pdf

4. https://www.bcg.com/publications/2024/highlighting-the-business-opportunity-of-dei-initiatives#:~:text=Companies%20with%20above%2Daverage%20diversity,with%20different%20backgrounds%20and%20perspectives

5. https://www.cloverpop.com/hubfs/Whitepapers/Cloverpop_Hacking_Diversity_Inclusive_Decision_Making_White_Paper.pdf

6. https://www2.deloitte.com/us/en/insights/deloitte-review/issue-22/diversity-and-inclusion-at-work-eight-powerful-truths.html

7. https://www.thinkwithgoogle.com/future-of-marketing/management-and-culture/diversity-and-inclusion/thought-leadership-marketing-diversity-inclusion/

8. https://www.accenture.com/content/dam/accenture/final/a-com-migration/manual/r3/pdf/Accenture-Inclusion-and-Diversity-in-Retail.pdf