A diverse workforce gives organizations a significant competitive advantage, including higher profitability, enhanced customer satisfaction, improved engagement, and lower turnover.
By Xan Daniels
The American population has never been as wonderfully diverse as it is right now. From coast to coast, there’s no shortage of diversity in terms of race, ethnicity, age, gender, religion, disability, sexual orientation, veteran status, neurodiversity, gender identity, and more.
Accordingly, today’s workforce is more diverse than at any other time in history. That’s a great thing. Not only does it provide a richer experience for employees, but it also brings a wealth of experiences, backgrounds, beliefs, and perspectives that deliver immense advantages in the form of varied perspectives, outlooks, communication styles, and approaches to problem-solving.
A diverse workforce can significantly improve business outcomes by fostering innovation, enhancing decision-making, expanding market reach, improving employee engagement, and attracting top talent. Diverse teams are better able to challenge assumptions and explore unconventional approaches, leading to better problem-solving, more creative solutions, and increased revenue.
Embracing diversity in the workplace is not just a matter of social responsibility, but also a strategic advantage that can lead to significant improvements to the bottom line.
Delivering a Competitive Advantage
A diverse workforce gives the organization a significant competitive advantage. Studies have shown that more diverse companies are more successful across several measures:
- Higher profitability (36% to 48%): Companies in the top quartile for gender and ethnic diversity significantly outperform their less-inclusive peers.
- Higher customer satisfaction (53%): Inclusive teams, especially in consumer-facing industries, build stronger customer connections.
- Improved engagement (40%): Companies that prioritize inclusion foster stronger employee loyalty.
- Lower turnover (25%) and higher productivity (21%): Inclusive workplaces engage employees who feel seen and valued.
Diverse teams bring an array of advantages, primarily due to the diversity of thought that develops naturally because of their different lived experiences. Each person brings their unique perspective and point of view, introducing fresh insights, sparking creativity, and leading to new ideas and solutions.
Here are a few ways organizations can benefit from a diverse workforce.
- Innovation: Bringing together different backgrounds and perspectives stimulates creativity, discourages groupthink and generates innovative solutions.
- Representation: When teams represent the diversity of the customer base, the company is better equipped to understand their needs, anticipate challenges and design impactful products. Ultimately, representation within the workforce brings the voice of the customer into the heart of the business strategy.
- Adaptability: Leveraging a variety of skills, experience and knowledge enables organizations to adapt more quickly to sudden changes, emergencies and other unexpected circumstances.
- Problem-solving: The ability to look at something in a novel way, challenge the status quo, and ask thought-provoking questions allows for more effective problem-solving.
- Decision-making: A variety of viewpoints and experiences provide a more comprehensive analysis of situations and potential outcomes.
Setting the Record Straight
Leaders understand the importance of having a workforce that “looks like America.” Thus, they’ve been casting a broad net with the goal of recruiting people from all backgrounds. As they leverage the talents of this inclusive workforce, it’s incumbent on C-suite leaders, particularly the CEO and CHRO, to foster an open dialogue promoting cross-cultural understanding and collaboration, fostering a sense of belonging, and encouraging employees to welcome diverse perspectives into decision-making processes.
Increasingly, they are also encountering a need to address the elephant in the room—that is, the misconception that employers give preferential treatment to marginalized groups, hiring or promoting them even if they are less qualified than other candidates. This belief has become alarmingly pervasive in recent years, driving rancor and discontent among certain factions of the public, leading to confusion, skepticism, and controversy.
Building a workforce that represents the demographics of the United States does not mean lowering the bar for underrepresented groups. The organization should retain high standards for everyone they hire or promote. At the same time, they need to ensure all candidates—regardless of ethnicity, race, gender, sexual orientation, etc.—are given equal consideration. In the end, all decisions around hiring or promotions must be made solely on choosing the best person for the job. If that happens to be a woman, fantastic. If that happens to be a man, fantastic. A person of color? Fantastic. A lesbian? Fantastic. Someone on the spectrum? Fantastic. And so on and so on.
As employers debate how to respond to the ongoing firestorm around diversity, equity, and inclusion (DEI) and chart their path forward, they should be acknowledging the power of a representative workforce and celebrating that people are encouraged to bring their own identities for the betterment of today’s workforce. By fostering a culture of inclusion, they ensure that all employees feel valued, respected, and safe, not for their race or ethnicity or gender, but for who they are and what they bring to the organization. In the face of so much divisiveness, leaders must align to the company’s purpose and values and ensure that whatever the mission, the outcomes are true for all.
Xan Daniels is the global inclusion and diversity leader at Alight.
