Today’s Smartest Companies Know Diversity in the Workplace Is a Business Priority — 6 Reasons Why

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Laura Berlinsky-Schine
Laura Berlinsky-Schine
April 15, 2024 at 10:26PM UTC

Today’s smartest companies know that in order for their organization to thrive and remain relevant, diversity needs to be a top business priority. Not all diversity initiatives work out, of course, but it's important to keep trying to find the one that does. If you don’t, it could mean your organization ultimately stagnates and lags behind its competitors — including when it comes to revenue.

Still not convinced that diversity holds the key to keeping your organization competitive? We’ve rounded up the research-backed argument to change your mind below.

What is diversity in the workplace?

A diverse workplace is one that includes employees from a wide range of backgrounds, including people from different: cultures; perspectives; ages; genders; ethnicities; races; abilities; sexual orientations; geographic locations; socioeconomic statuses; religions; and other intersections of identities. Having a diverse workforce can promote an inclusive environment that sees the differences between its workers as the strength that it is.

Why is it good to have diversity in the workplace? 

Companies that choose to promote diversity enjoy many benefits related to company culture. Here are some of the specific benefits that come with making diversity a priority at your organization:

Diversity drives innovation and creativity.

Bringing employees with diverse backgrounds into the fold can challenge and enrich your team as a whole, giving individuals the ability to examine problems and see solutions from new perspectives. Diverse workplaces are breeding grounds for better, bolder ideas. People of different ethnic backgrounds, genders, ages, races, sexual orientations, and other intersections of identity can bring a multitude of experiences and ideas to your business, which not only gives all your team members new perspectives and insights, but can improve your product or service as well. You may discover approaches you never even considered.

 Diverse workplaces attract top talent.

A diverse workforce is a draw for many prospective employees. People want to be part of a work culture that welcomes a range of backgrounds and perspectives and will embrace the differences and ideas they bring to the table, and that data only supports this idea. According to a Glassdoor survey, most workers — 67 percent of those surveyed — say the diversity of a prospective workplace is an important consideration when evaluating whether they’d join a company. 

That percentage is even greater among underrepresented groups. For instance, 72 percent of women identify diversity as a top concern when choosing where to work. That means that if you're not making efforts to promote diversity, you may be missing out on talented candidates.

Diverse workplaces foster a culture of learning.

Companies should make an effort to promote a culture of learning. Doing so leads to better-engaged employees, which can also contribute to retention. Additionally, when employees learn, they become better workers.

Learning isn't limited to developing skills and expertise. It also involves discovering new cultural perspectives and embracing the viewpoints of others. Naturally, by promoting diversity and inclusion in your work environment, you're exposing your employees to differences in backgrounds, views, experiences, and challenges. This not only contributes to an inclusive environment but also allows people to learn new insights and gain perspective, which will ultimately result in a stronger company.

What are three benefits of diversity?

We’ve touched on a few of the cultural benefits of making diversity an organizational priority. But outside of company culture and ethics, fostering a workplace environment that welcomes diversity has some concrete benefits for your company’s bottom-line, too.

1. You'll retain talent.

Retention is an important issue for businesses in every industry. Replacing employees is expensive and requires considerable time and effort on the part of managers, who must interview, hire, and train new recruits, and workers, who must pick up the slack when a coworker leaves the company.

When employees feel valued and included, they are more likely to be satisfied in their positions and less likely to quit. Making efforts to improve cultural diversity and awareness by implementing diversity programs, as one example, can contribute by helping employees to feel included. Recognizing underrepresented groups and holding celebrations or awareness events, like having a company-sponsored group at your local Pride Parade or hosting a book club for Black History Month, are just some examples of diversity programs you might initiate. 

2. Productivity will increase.

Employees with a diverse set of perspectives and skill sets at their access are able to work together more effectively to serve their customers or clients. It makes sense that bringing together people of diverse backgrounds can contribute to a more productive work environment. When people can contribute different insights based on personal experiences and views and use these to exercise unique problem-solving skills, team members are better able to work together to develop solutions and hone their product.

3. Your company will perform better with customers and stakeholders.

Inclusion and diversity don't just matter in a subjective sense. Promoting a culturally diverse workplace can actually yield a greater profit. McKinsey & Company found that companies with strong gender or racial and ethnic diversity are more likely to have greater financial returns than their national industry medians. While correlation doesn't prove causation, the findings suggest that companies who make efforts toward establishing a more diverse work environment may be successful in other areas of the business, too.

Of course, public image and perception may play a role in this as well. How people perceive a company, including the steps it takes to promote diversity, can influence whether or not they will buy or use the service or product. A company that has a strong track record of diversity is likely to have a positive reputation, particularly if it makes forward-facing initiatives.

How do you promote diversity in the workplace? 

Now that we’ve touched on the reasons you should make diversity a business priority, how do you actually go about implementing it at your organization? Building a diverse workforce at your company requires time, commitment, and resources, but it will be well worth the effort. In order to get started, you should: 

1. Make sure you understand the current status of diversity at your organization.

You might survey your employees to learn about their perspectives on diversity and inclusion in your workplace and ask for suggestions on what and how to improve. Take the feedback seriously, and go from there.

2. Implement diversity policies, or assess the effectiveness of existing ones.

Consider how your company policies reflect and incorporate diversity. Do you have a specific diversity policy? If not, you should consider creating one. For instance, how do you ensure that diversity plays a factor in decisions and hiring practices? Going over your current policies and developing new ones can contribute to establishing a more diverse organization.

3. Make use of programs that elevate your employer brand as a diverse one, as well as aid in attracting diverse talent to your organization.

At the end of the day, the health score of an organization’s diversity is pretty simple to assess — how many of your employees are actually diverse, across gender, race, age, sexual orientation, and other intersections of identity? And how many of these employees hold leadership positions? 

If your company’s diversity quota could use some improvement, you may want to consider making use of programs that help address this, like Fairygodboss’ employer branding and recruiting packages. These programs help not only by putting your organization’s job postings where women and diverse candidates are looking for jobs, but also by highlighting what makes your organization an inclusive space where these candidates can be confident they’ll thrive.

See our employer solutions for workplace diversity.

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