5 Types of Diversity That Benefit Companies

Traditionally, companies selected their hires based on a criterion called cultural fit. This led to workforces made up of individuals with similar backgrounds and experiences.

Emphasizing cultural fit sometimes meant overlooking highly qualified candidates. In the worst-case scenarios, hiring for cultural fit served as a covert way to discriminate against candidates in protected classes.

At the very least, companies with homogenous cultures were vulnerable to blind spots and poor decision-making. Customers, who are becoming increasingly diverse, have also started to take note of the makeup of companies’ workforce.

Up to a third of consumers consider a company’s diversity policies before making a purchase.

These factors have increased companies’ interest in diversifying their workforce. Inclusive hiring practices not only meet customer demands for diversity but also have a notable impact on profit and revenue.

Statistics show that diverse companies are also far more productive and generate more cash flow.

Diversifying the Workforce

Creating a diverse company requires forethought, a conducive recruiting and hiring process, and company values that include inclusion, acceptance, and respect.

Workforce diversity occurs on several different levels. The most effective companies employ recruitment and retention practices that increase diversity in all the following categories:

Demographic Diversity

Demographics refer to the social and economic identification that people use to label themselves. Some typical demographic categories include race, gender, age, and marital status.

Nearly every industry has an overrepresentation and underrepresentation of one or more demographics. For example, the technology industry tends to be young and male, while early education is mostly female. However, all industries can benefit from a workforce that represents individuals from diverse demographics.

Besides an overemphasis on cultural fit, demographically homogeneous workforces often develop due to a lack of a talent pipeline. For example, young girls are actively and subtly discouraged from STEM subjects due to a lack of role models and lower expectations from their teachers. This reduces the number of college-aged women who major in STEM and are eventually available to work in the field.

Companies can address these issues by establishing targeted training programs that recruit and train individuals from underrepresented demographics.

Experience Diversity

Life experience is also an area where employees tend to share similarities rather than differences. For example, companies may overwhelmingly hire individuals from Ivy League schools or residents of large cities.

However, this can create an insular culture that cannot respond effectively to challenges. Companies can avoid this problem by considering candidates who do not meet their typical profile.

For example, companies can expand their minimum criteria to include individuals with qualifying experience, but no college degree. Candidates who can relate to multiple cultures, such as bilingual individuals or people with international working experience can also provide a fresh point of view that can be invaluable.

Skill Diversity

If a company hires individuals with similar work histories, the workforce may have a homogenous skillset. This can limit how they approach problems and lead to less-than-optimal solutions.

Companies can increase skill diversity by considering candidates who are switching careers. These are individuals who may have spent years in an unrelated field but are now interested in a new industry.

People switching careers often have skills that are unique within an industry. Introducing hires with unusual skill sets enables companies to create solutions that would otherwise be impossible. This can give businesses an edge over their competition.

Thought Style Diversity

Companies with strong cultures can inadvertently encourage the groupthink phenomenon. This happens when workers come to a consensus without thoroughly debating a decision.

Workplace diversification within a company culture that values autonomy and critical thinking can counter groupthink. In this setting, workers feel empowered to share their thoughts and challenge status-quo decisions.

As some people may be more hesitant to contribute their ideas in a group setting, companies can also encourage thought diversity by offering different formats for collaboration.

For example, they could allow employees to share their feedback in writing or anonymously and distribute preparation materials before meeting so that workers can have more time to process the information.

Organizational Diversity

In many companies, departments are segmented, and teams are composed of workers at the same level.

Companies that practice organizational diversity create flexible project teams that include members from multiple departments and different levels of management.

While this practice is slowly gaining attention in the corporate world, it is common in the public and nonprofit sectors. Organizations in these industries often create committees that oversee the creation or implementation of a new project.

Committees are designed to be inclusive and represent all stakeholders, even volunteers or end-users. This ensures that the project is informed from the very beginning by a diverse group of individuals.

Organizational diversity works best in companies with flatter hierarchies. This means that workers report directly to high-level managers or C-suite executives. These types of companies tend to have the flexibility, trust, and employee autonomy that make organizational diversity more viable.

More hierarchical companies can integrate organizational diversity in a top-down manner by seeking employee input, recognizing employee contributions, and ceding more autonomy to employees at all levels.