4 Ways Diversity Is Key to Business Success

The benefits of having a diverse workforce are myriad. They’re also proven. Since the pro-business case was made in a 1996 Harvard Business Review article, researchers have repeatedly shown that companies with diverse workforces outperform their non-diverse competitors.

However, many employers have yet to heed the research. According to Forbes, more than half of employees believe their company’s diversity efforts have so far been inadequate. Managers, meanwhile, acknowledge they haven’t made diversity a priority; 41 percent say they don’t have time to implement the necessary programs.

While building a diverse workforce is more complicated than simply hiring people from traditionally underrepresented backgrounds, the value gained from being able to draw on the insights of these employees is substantial. Wondering how exactly diversity can help your business? Let’s look at four specific ways.

1. Better Applicants

Employers want job seekers to be excited about the prospect of working for their company. But if the company hasn’t made diversity a priority, candidates will notice.

According to Forbes, when considering whether to apply for an open position, 1 in 3 potential candidates will pass on submitting their resumes if they see a company lacks diversity. Considering that nearly two-thirds of job seekers will research an employer when deciding whether to apply, subpar diversity will negatively impact the number and quality of applicants.

Focusing on diversity, on the other hand, will improve your reputation. According to Indeed, among candidates interviewing for a position, 17 percent say that a major factor in their developing a positive view of a company is a clear commitment by the company to inclusivity and diversity. In addition, 55 percent of applicants point to an emphasis on diversity and inclusion at a company as being “very or extremely important.”

Fortunately for businesses, committing to diversity is a positive, self-reinforcing cycle. Hiring—and then empowering—people from various backgrounds means you’ll be more likely to attract other diverse applicants in the future. This not only ensures you consistently have access to the best talent, but it also makes your company more appealing to clients.

2. Higher-Quality Teams

Most CEOs say that creativity is the most important attribute their employees can have. It’s no wonder why. Creativity yields innovation, and innovation is key to business success.

A diverse workforce translates to a creative workforce in that employees from different backgrounds bring their unique experiences and perspectives to their positions. While people from similar cultural backgrounds will often arrive at a single expected solution, diverse teams are more likely to look at problems in unique ways and formulate multiple out-of-the-box ideas.

When the time comes to decide on pursuing one strategy or another, diverse teams are similarly better equipped than their less diverse counterparts. Research has shown that people from different backgrounds have heightened social awareness and analytical skills.

Incorporating these individuals into teams ensures smarter decision-making overall—overwhelmingly, in fact. One study found that diverse teams outperform non-diverse teams in terms of decision-making at a rate of 87 percent. What’s more, as diversity increases, so does the quality of decision-making.

3. More Loyalty, Less Turnover

Employees who are happy in their positions will stay longer with their company. To keep a diverse workforce happy, you need to treat your employees equitably. A key component of equity is offering opportunities for professional advancement. According to Gallup, 87 percent of millennial survey respondents say that being offered these opportunities is important to their job satisfaction.

Job satisfaction means more than lots of smiles around the office. Employers who are happy with a company’s inclusiveness and equity will have more confidence in their work and be more likely to perform to their maximum potential. When placed onto diverse teams, their productivity can be even higher.

Happy employees will also advocate for your company and attract new talent. This means that even when employees decide to move on from your company, you’ll always have someone qualified to take their place.

4. New Markets, Increased Profits

Advertising and marketing are two of the sectors where the benefits of having culturally diverse teams manifest the most. Diversity in the workplace yields campaigns that feature people from a variety of backgrounds. These campaigns, in turn, will resonate with customers who identify with these backgrounds, thus expanding a company’s customer base.

The numbers bear this out. One study found that having a diverse workforce increases the likelihood of a company capturing a new market by 70 percent. What’s more, once you do capture that market, your diverse employees will help you retain your diverse customers by providing them with the service they need.

It’s important to remember that while having diversity at all levels of your company will help you hold on to new customers, your business will especially benefit from the upper echelons of your company reflecting your commitment to hiring and empowering people from diverse backgrounds. According to Indeed, one study found that in companies whose executive teams ranked in the top quartile in terms of diversity, 15 percent were more likely to report above-average profits.

In closing, diverse companies like Remcoda, which has team members from China, Italy, Sri Lanka, India, Brazil, Colombia, and the US across a variety of religions, genders, sexual orientations, and races, are more innovative, creative, competitive, and profitable.