August 7, 2022

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7 Ways In Which A Diverse Workforce Drives Business Growth

“Strength lies in differences, not in similarities” – Stephon R. Covey

The notion that diversity is just practised in books and schools is now a thing of the past. The culture of embracing diversity and inclusion is becoming the new normal all around the globe.

All the stakeholders including employees, employers, and investors are becoming more aware of many evident benefits of diversity and are preferring companies that practice diversity over those that do not. In fact, 35 per cent of the management leaders state that diversity, inclusion, and equity are among their top priorities for the future.

However, in spite of all the benefits of a diverse workforce which we will discuss below, companies are now becoming more open to welcoming employees from all parts of society and giving them equal opportunities to grow and evolve. As a consequence, it will not only assist in the growth of the company but will contribute to making the earth a better place to exist. 

Probing further, this blog will highlight the key benefits of encouraging diversity in the workplace and how all those benefits can contribute to the growth of the company. Therefore, let’s dive right into the blog without further ado.

1. Diverse Workforce Contributes to Better Decision-making 

Diversity and better decision-making have a very simple equation that states more diverse people have more information which further contributes to a better decision-making process. To validate, as per the research by Cloverpop, companies that have a diverse workforce come up with better decisions up to 87 per cent of the time. 

To elaborate, when companies have a more diverse workforce, they will have more people from different mindsets, and experiences, and from various social and cultural backgrounds. This will further contribute to gathering more information and more facts that can lead to more efficient decisions that can benefit the growth of the company

Moreover, even if there are differences in opinions, it will encourage employees to focus more on presenting statements with evident facts. This can lead to even more efficient results because more opinions can counter all the possibilities of backfiring decisions. 

2. Diverse Workforce Enhances Employer Brand

Who does not want to work with a company that is open to everybody irrespective of their gender or race and treats everyone fairly? This highlights another benefit of having a diverse workforce, it attracts potential employees that can enhance the efficiency of your company.

Whenever a company is badmouthed for discriminating against any certain part of society, it affects the employer brand of the company as well. The reason is that nobody wants to work with a company that does not support diversification in the workplace. 

In fact, according to BuiltIn, every 3 out of 4 employees prefer companies that practice diversity. Furthermore, nobody can deny the fact that practising discrimination or favouring any certain part of society creates a huge outrage among audiences in the contemporary world.

Moreover, when companies open themselves to hiring a diversified workforce, it gives them an ample talent pool to choose the best suitable candidates for the position.

Diverse Workforce Improves Customer Experience

3. Diverse Workforce Improves Customer Experience 

Forrester’s 2018 Customer Experience Index results reflect that major companies often struggle to create and sustain a healthy human connection and relationship with their customers. In order to fill that gap, teams must have one significant trait which is empathy.

Empathy assists in creating a better relationship with customers and enhances their overall experience which can further assist in growing the business in the contemporary world. 

Let’s take an example and understand this, you call a company regarding a complaint about their service and their call executive speaks the same language as you. Wouldn’t it be comfortable for you to talk to someone from the same background?

This is how another benefit of diversity works. When a company hires diverse backgrounds, it assists in giving comfort and dealing effectively with their customers from all over the globe which further enhances the customer experience of the company. Most importantly, we all know that better customer service always adds up to achieving the business objectives of the company. 

4. Diverse Workforce Promotes Positive Company Culture

As per The 2021 Deloitte Millennial Survey, 69 per cent of employees believe that their companies’ senior management are diverse and see their working environments as motivating and filled with positivity.  This highlights the importance of diversity in increasing productivity and enhancing company culture. 

However, greater diversity does not directly increase productivity. To elaborate, when the team and employer respect each other’s cultural differences. It gives them confidence and boosts their morale to work together with more efficiency. All of this can give employees a sense of belonging and create a positive environment in a workplace which can further motivate them to engage better and increase their productivity.    

Moreover, higher productivity and higher engagement of employees can also reduce the turnover of the company which can benefit the company in the long run.

Greater Customer Acquisition

5. Greater Customer Acquisition

In the above point, we discussed how diversification enhances positivity in the working culture. This brings us to the next way in which diversification contributes to the growth of the company. 

We are all very well aware of the fact that positive attracts positive. This rule applies in the business world as well. When you hire a diverse workforce that brings positivity to the workplace, this encourages employees to come up with new ideas for attracting new customers which can be implemented to generate revenue. 

Along with this, when a company hires a diverse workforce, it opens up a new opportunity to enter the market of different parts of society. To validate, According to Harvard Business Review, diverse companies have a 70 per cent more chance of capturing a new market. 

Hence, when companies have the ability to reach a new market, it also opens the door to opportunities to acquire new customers from different parts of society through various customer acquisition strategies. Effective implementation can expand the customer base of the company which can further contribute to its growth. 

6. Diverse Workforce Encourages Innovation 

Many pieces of research have shown and proved that companies that practice diversity have the ability to come up with more innovative ideas and products. This innovation can assist in giving them a competitive edge over their competitors and can further add up to enhanced revenue. 

To substantiate, as per Harvard Business Reviews, companies that have higher than average diversity have been able to collect 19% higher innovation revenues than their competitors.

To simplify, when you hire different people representing different communities, they can bring a totally new perspective to an idea because of living in different environments and educational backgrounds. Moreover, a diverse team understands the need and demands of the area they represent which can contribute to generating new and unique ideas that can assist in the further growth of the company.

Diversification Attracts new Investors

7. Diversification Attracts new Investors

Bringing diversity in a workplace not only benefits companies by attracting customers but also increases the possibility of attracting new investors and stakeholders. To elaborate, investors are now also becoming aware of the much visible benefits of having a diverse workforce. 

They understand that bringing diversity to a workplace will bring creativity, innovation, and more customers that will in short benefit them and increase their value of investments. Along with this, many investors believe that treating everyone with respect and equality is their ethical obligation and will only invest in companies that are transparent and open about practising diversity. 

To substantiate, research was conducted and they identified 49 gender-diverse firms that went public and were transparent about their diversity preferences in their workforce. Many big companies like Google, eBay, and Amazon were included in the list.

The research further recorded the reaction of the stock market for some days after the public announcements regarding gender – diversity. They concluded that the investors were more interested and reacted positively towards the companies that were practising diversity and even the stocks of many companies got higher compared to those who did not. 

This implies that investors are happier investing in firms that are more open and transparent about their diversity practices because even the investors do not want to connect with firms that practice discrimination of any kind. This can further affect their reputation as well. 

To summarize, we have highlighted all the possible benefits that come with having a diversified workforce. All these benefits prove that diversity has now not only remained a trend in workplaces but has now become more of a necessity to practice. 

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