What is workforce diversity and why does it matter? If you’re a business or HR leader who has ever pondered these questions, then let this be your guide to filling the blanks of what you don’t know about diversity and why prioritising it in 2020, is an essential success measure of your people & talent strategy.
Workforce diversity, in straight forward terms, means similarities and differences among employees in terms of their age, socio-economic & cultural background, race, religion, gender, sexual orientation, physical abilities and disabilities – Ultimately it’s a full spectrum of demographics that individuals can represent and an appreciation of the fact that no two humans are alike.
Individuals, companies and indeed the collective culture is beginning to embrace the benefits of having a diverse workforce. Moving away from the ‘individuals must fit the mould’ mode of thinking, to one where uniqueness and differences are valued for their contributions and perspectives.
Getting workforce diversity right, from a people and business management standpoint, is about valuing everyone in the organisation as an ‘individual’ and “having an inclusive environment where everyone feels able to participate and achieve their potential,” says the CIPD (Chartered Institute of Personnel & Development).
The Business case for Diversity & Inclusion (D&I)
By placing Diversity and Inclusion at the top of your people agenda, you too could reap a host of tangible benefits. The business case for diversity in your workforce has proven results reported on time & again by managing consulting firms like Mckinsey.
Promoting and supporting diversity in the workplace is an important aspect of good people management – it’s about valuing everyone in the organisation as an individual
Whist there are significant strides being made towards greater diversity in the workforce, with many smart, people-centric businesses having D&I on their agenda for some time. The increased impetus for true inclusion has grown in recent years, thanks to high-profile initiatives such as gender pay gap reporting in the UK, campaigning and activism for greater racial diversity in business by organisations like the Equality Trust and demands for increasing socioeconomic diversity by organisations like the Social Mobility Foundation.
Diversity and financial performance in 2017These activities and movements, coupled with the reporting of sexual harassment in the film industry and its impact on diversity and equality have pushed the diversity agenda forward rapidly.
1️⃣ Diverse teams perform better
Diverse teams have been found to make decisions 60% faster than non-diverse teams. In fact, a study by online decision-making platform Cloverpop, analysed around 600 business decisions made by 200 teams, across a range of companies and found that when diverse teams of three or more people, made a business decision, they outperformed individual decision-makers up to 87 per cent of the time.
Infographic: Diversity + Inclusion = Better Decision Making At Work | Source: CloverpopThe research study also found that diverse teams made decisions faster than individual workers, findings echoed in a similar study by Harvard Business Review. The Harvard Business Review research published in 2017, found that cognitively diverse teams solve problems faster than teams of cognitively similar people. Demonstrating the significant advantages available to organisations who hire, build and deploy teams with diversity in mind from the outset.
Teams Solve Problems Faster When They’re More Cognitively Diverse | Source: Harvard Business ReviewIn order to harness the benefits and effectively measure the performance successes of diverse teams, it’s essential to have good HR Management Software that accurately holds, individual and demographic data on employees. In doing so, benefits realisation reporting is accurate, measurable and repeatable.
2️⃣ Workforce Diversity gives you a better understanding of your customers
Your customer & client demographics are unlikely to be singular, there will invariably be a blend of different demographics amongst your customer base and so by having a diverse workforce you’re both representing and gaining an insight into the customers & clients your business serves.
Teams Solve Problems Faster When They’re More Cognitively Diverse | Source: Harvard Business ReviewCultural nuances, distinct to individual countries and groups, can be better understood and catered to as a result of harnessing those cultures within your workforce. In the context of international business, what is accepted and common in one country could be different in another.
How culture affects international business, is in three key areas, communication, etiquette, and organizational hierarchy, say Hult Business School on the subject of how to successfully integrate cultural diversity in your workforce.
By engaging the feedback and viewpoint of a diverse range of employees you’re better placed to respond to the needs of your international customers and any potential cultural distinctions.
3️⃣ Higher Innovation comes from diverse workforces
Diversity in your workforce leads to higher innovation, found a Bersin by Deloitte research study.
The study found that inclusive companies are 1.7 times more likely to be innovation leaders in their market. Which makes a great deal of sense when you consider that in a diverse workplace, employees are immersed in and exposed to a multitude of perspectives and differing worldviews, which when combined lead to novel ways of thinking and provide gateways to new innovations.
4️⃣ Greater talent pools and better hiring results achieved through diversity
Workplace diversity, placed high on your talent agenda leads to accessing a far greater pool of talent, which in turn delivers greater hiring results.
By placing diversity at the heart of your hiring strategy, you’re removing the barriers to talent sources that you may not have previously accessed. In fact, being known as a more diverse employer pays dividends to your employer brand, which is important when you consider that a Glassdoor survey on hiring and diversity, found that 67% of job seekers said that the diversity of an employer is important to them when considering job offers.
By focusing on the objective, of achieving a diverse workforce when you hire, you’re not only accessing that all too critical, wider pool of talent. But you’re also answering the demands for greater diversity at work, from the candidates themselves.
5️⃣ Workforce Diversity correlates with increased profits
Mckinsey & Company the global management consulting firm found that companies with greater workplace diversity achieve greater profits.
Research carried out by the firm, included findings from 180 companies in the UK, the US and mainland Europe, deducing that companies with more diverse leadership teams, were also the top financial performers overall.
Companies with diverse executive boards enjoy significantly higher earnings and returns on equity | Source: McKinsey & CompanyThe studies findings were startlingly consistent, for companies ranking in the top quartile of executive-board diversity, records of employment (ROE’s) were 53 per cent higher, on average, than they were for those in the bottom quartile. The study also found that at the same time, EBIT margins at the most diverse companies were 14 per cent higher, on average, than those of the least diverse companies.
As a result, companies with diversity in the workplace, make better decisions faster and achieve better business results, which in turn achieves more profit.
6️⃣ Creativity Increases within diverse teams
Diversity in your workforce leads to greater creativity.
Quite simply, by placing people with different backgrounds, experiences and perspectives together the very melting pot of those experiences leads to far greater creativity, much like innovation.
Through viewing the same problem, task or project in different ways, you’re far more likely to achieve a creative outcome, in turn improving creativity levels in your organisation overall.
7️⃣ Employee engagement increases with greater diversity
Diversity in your workforce positively impacts employee engagement.
Studies carried out on employee engagement, conclude that greater diversity correlates with the engagement levels of employees. This makes a great deal of sense when you consider that individuals are becoming increasingly altruistic and are concerned with more than just monetary gains from their work.
Employees are seeking careers that have a purpose & meaning whilst also wanting to know what their work matters. By being part of a company that cares about creating a diverse and inclusive environment, the sense of engagement and buy-in to the company culture from employees increases.
As Rosanna Durrethy, Head of Global Inclusion and Belonging for Linked In say’s on diversity, “for your company to have the best chance of winning, it should embrace diversity and inclusion. And as you embrace diversity and inclusion, approach it as a team sport.”
8️⃣ Good people management skills increase alongside diversity
The continuous development of good people management is essential in harnessing the benefits of diversity in your workforce. Making a commitment with your leadership & management team to up-level the hard & soft skills required to effectively manage diverse teams, is a solid commitment to make.
HR’s focus should be to hire people managers who have a track record of successfully managing diverse teams. Identifying leaders with this ready blend of skills, at the point of hire enhances the diversity agenda, whilst also introducing a skill set in amongst your existing people managers which can be leveraged.
By devising a learning & development programme that utilises the skills of those managers, through in-house skill shares and training, you’re gaining the most both culturally and skillfully.
9️⃣ Diversity offers a greater opportunity for personal and professional growth
A diverse set of colleagues within your workforce provides a professionally enriching culture, which in turn becomes an enriching experience for those participating in that environment.
By exposing individuals to new skills, perspectives, work-styles and approaches to work, personal growth amongst your employees occurs somewhat organically as well. Working across cultures and collaborating alongside similarities and differences, has increasing value in this interconnected, globalised world of work.
1️⃣0️⃣ Diversity can help your company become a global leader
We’re living and doing business in an increasingly globalised way, it’s highly likely that you’re already working with clients or vendors from other countries and if you aren’t now, in order to support growth, you likely will be at some point in the future.
To become a global leader, you will need a diverse team of employees, with unique cultural backgrounds, which in turn will serve and satisfy the needs of clients from other countries. By having employees who speak other languages and understand other cultures, you’re increasingly likely to succeed in the global market, leveraging the talent and capability you have internally. Multicultural and cross-cultural teams mean businesses can benefit from an increasingly diverse knowledge base and new, insightful approaches to business problem solving, bringing ever-increasing opportunities to work internationally.Jade.
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The post 10 Things You Didn’t Know About Workforce Diversity appeared first on CakeHR Blog | Easy to implement HR tips!.
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Author: cake hr uk
Date/time: 4th May 2020, 12:02