Today, many Singaporean companies put diversity initiatives at the tops of their “must do” lists. And while it’s widely accepted as the right thing to do, the reasons for cultivating a diverse and inclusive workplace go far beyond that. As it turns out, creating a culture of diversity and inclusion is actually good for your business — in more ways than you might imagine.
What is diversity in the workplace?
Gallup explains diversity as the range of differences in human demographics, such as race, gender, sexual orientation, religion and age. In some cases, education levels and family characteristics might fall under the category of diversity, too.
Inclusion, on the other hand, is a way of building on that diversity and creating a feeling of belonging for everyone within an organisation. It means creating a workplace culture in which employees feel valued, respected and accepted. They feel they’re welcome to be themselves and can share their ideas in a friendly environment.
When diversity and inclusion work together, they improve the job experience for employees. But they also improve the performance of the company as a whole.
Here are five key benefits of diversity and inclusion.
Diversity and inclusion contribute to higher profitability
According to Forbes, companies ranking high in gender diversity outperform their competition by 15 percent. And it gets even better for those who practice ethnic diversity — they do better than their competitors by 35 percent.
Workplace diversity is an important predictor of a company’s sales revenue and profitability, according to the American Sociological Association. Companies with the highest amount of racial diversity bring in, on average, 15 times more sales revenue than those with lower levels of racial diversity.
Diversity leads to greater innovation
In the study, “Fostering Innovation Through a Diverse Workforce,” researchers for Forbes found some fascinating associations between inclusion and innovation. Diverse employees bring a far-reaching set of life experiences and backgrounds to the table, meaning they’re often looking at life through a different lens. That different perspective can open up new ways to solve challenges or address problems. When these different viewpoints mesh together, it has the potential to out-innovate the competition.
Or, as Harvard Business Review explained, “Diversity unlocks innovation by creating an environment where ‘outside the box’ ideas are heard.” The results? Companies practicing diversity are 70 percent more likely to capture a new market.
Diversity makes it easier to recruit top talent
At a time when unemployment is low, recruiting talented, dedicated workers can be a challenge. They’re looking for more than just compensation perks and packages. A study by Glassdoor found that diversity can mean the difference between whether or not someone wants to work for your firm.
Researchers found that 67 percent of jobseekers considered a diverse workforce one of the important factors in choosing where to work. That was true regardless of whether or not the survey respondents were part of a minority. This shows that workers — as a whole — aren’t just open to the idea of a diverse workplace but that they’re beginning to expect it. The more you respond to this expectation, the better your chances are of hiring and retaining top talent.
Cultural diversity in the workplace attracts more customers
When a business establishes itself as having a culture that fosters diversity, it becomes more attractive to minority customers. A company with a diverse staff is more likely to be perceived as understanding the needs of a diverse customer base. Researcher Stephen B. Knouse, Ph.D., of the University of Louisiana at Lafayette in the US found a diverse employee base can communicate with different types of customers. This helps employees better understand and meet their needs.
The consulting firm DeEtta Jones also reports that brands that value diversity enjoy better brand perception. One reason could be that customers perceive diverse-minded brands as being more in touch with their customers and being more forward-thinking. Potential customers may perceive brands that don’t practice diversity as being bland and behind the times.
Diversity and inclusion boost employee engagement
Many studies indicate that positive work environments lead to greater success. Happier employees are more productive and engaged. When you create a culture of inclusion, it creates a happier, more relaxed work environment, too. Employees feel valued and respected, which leads to greater collaboration and creativity. Inclusive workplaces show higher levels of engaged workers, and that leads directly to better job performance.
Effectively managing cultural diversity in the workplace has a positive effect on all workers, regardless of whether or not they’re part of minority groups. Diversity and inclusion don’t just happen in a workplace, though. They take careful, conscious thought and a clear plan to ensure everyone at every level emphasises and understands the concepts. And, when employees embrace and nurture this type of environment, it benefits everyone.