The 4 primary benefits of diversity in the workplace

New Zealand’s long and rich history of indigenous culture and multiculturalism is one of our greatest strengths. There is even legislation in place, like the Human Rights Act 1993, which makes it illegal to treat an applicant or employee unfavourably because of their race, colour or national or ethnic origin, to help ensure diversity extends from our societal makeup into the engine room of our country - our workplaces.

Beyond a business’ legal responsibility, workplace diversity has become a central focus of the HR industry over the last couple of decades and was a leading workplace trend in 2020. One reason for this was the large number of businesses investing in the global workforce which resulted in more diverse teams working remotely following the onset of the COVID-19 pandemic.

Businesses are now prioritising diversity as well as complementary inclusion policies with the aim of increasing employee happiness and satisfaction and improving their reputation. Enforcing an integral inclusion policy that protects your diverse workforce and works to help all employees interact productively and kindly is crucial to your company’s success.

However, while your company’s reputation and inclusive diversity are definitely important goals, workplace diversity also offers a number of substantial benefits that will directly impact your company’s bottom line and give you a serious competitive advantage.

What is workplace diversity?

Workplace diversity involves intentionally employing people in your business across all walks of life across from different backgrounds, genders, ages, races, ethnicities, religions, sexual orientation, skills and socio-economic groups.

And remember, hiring people that fit in well with your company culture is mainly based on someone’s personality rather than background or experience. When you hire a truly diverse workforce you are more likely to harness benefits like innovation, new and contrasting ideas and perspectives - all factors that will contribute to a positive workplace culture and environment.

What is an inclusive workplace?

An inclusive workplace is one where all employees, regardless of their race, background, religion, gender, disability or anything else that might make them different to someone else, feel safe, welcome, encouraged and valued for their contributions at work.

When it comes to your workplace it’s possible to have a diverse workforce that isn’t inclusive, or an inclusive workplace that’s not diverse – these combinations usually mean that you won’t see the benefits of either.

Building an inclusive culture for a diverse workforce is crucial to harnessing the benefits and power of diversity. An inclusion policy should help your company embrace the diversity of backgrounds and perspectives of your employee. This will in turn increase the skills, creativity, productivity and contributions of your entire workforce.

What are the 4 primary benefits and challenges of workplace diversity?

Diversity in the workplace offers a wealth of internal and external benefits but it isn’t without its unique set of challenges either. Here are the four most meaningful benefits and challenges of a diverse workplace for your business:

Benefits of workplace diversity

You can harness a variety of perspectives
When employees of different backgrounds, cultures, nationalities, and perspectives brainstorm together, the collection of different approaches to a job or a problem increases success. A diverse workforce also gives you better insight into your diverse customers.

You can foster increased creativity and innovation
Workplace diversity boosts creativity by encouraging employees from diverse backgrounds to brainstorm together. This kind of melting pot allows for fresh innovative ideas for reaching company goals and solving day-to-day problems.

You can boost your business’ reputation
Other than diversity looking good, it can also generate goodwill in your community and industry. Diversity not only connects you to more of your community, it can help you build a national (and even international) reputation for being an inclusive, forward-thinking brand that welcomes all people. When you become a brand people want to work with, your hiring quality and business success will sky rocket.

You can increase your bottom line
According to a number of industry studies, in particular a recent McKinsey report, companies who focus heavily on racial and ethnic diversity are 36% more likely to have financial returns that are above average for their industry. That’s some solid evidence that greater workplace diversity leads to greater returns on investment.

Challenges of workplace diversity

Aligning diversity policies with your company goals
A handbook that explains the best way to do this unfortunately doesn’t exist. But, taking the time to make sure your unique company goals and culture are intertwined in your diversity policies, will mean that you are much more likely to thrive from the benefits of workplace diversity. The last thing you need is to spend time on diversity initiatives that don’t significantly enhance your business.

Implementing a diversity program
A perfectly designed diversity program is useless if no one champions it’s launch and continuing success in your company. Nominating a team, some support, and resources to lead the implementation of your diversity initiatives will help to hold your business accountable for its effectiveness.

Training your leaders
For diversity to be successful every employee -  from top to bottom -  needs to get on board and work together. Your leaders and managers have an especially huge influence on how well the rest of your business embraces workplace diversity. Investing in training to help your leaders understand why your diversity goals are important and how you expect them to set an example is crucial. Even if just one leader slips up with an insensitive or exclusive comment your company’s culture could be in jeopardy.

You can increase your bottom line
Unfortunately, it’s not easy to convince every employee to commit to greater workplace diversity. No matter the reason for an employee’s resistance to get on board, as the leader of your business, educating and training your staff as much as possible on the benefits of diversity is key to overcoming friction. Providing a clear outline of what values underpin your unique company culture will make it easier for certain employees to understand whether their beliefs align with your company and even whether or not they truly belong with your organisation.

References:

• https://www.talentlyft.com/en/blog/article/244/top-10-benefits-of-diversity-in-the-workplace
• https://www.cultureamp.com/blog/benefits-of-diversity-in-the-workplace/
• https://inside.6q.io/benefits-of-cultural-diversity-in-the-workplace/ 
• https://www.wonolo.com/blog/6-benefits-of-having-a-diverse-workforce 
• https://www.linkedin.com/pulse/characteristics-inclusive-workplace-siyana-sokolova 
• https://www.breathehr.com/en-gb/blog/topic/company-culture/equality-and-diversity-in-the-workplace

Disclaimer: This document contains general information and is also not intended to constitute legal or taxation advice. If you need legal or taxation advice, we recommend you speak to a qualified adviser.