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5 Advantages of Diversity in the Workplace

Understanding the advantages of diversity in the workplace can result in greater productivity, profitability and team morale. It can also lead to a reduced rate of employee turnover for your business.

Learn about the many benefits of diversity in the workplace and some best practices for embracing inclusion and diversity in your own business.

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Five benefits of diversity in the workplace

Diverse workplaces employ people who represent a wide range of ages, races, backgrounds, languages spoken, sexual orientations, abilities (physical and mental), gender identities and nationalities. By expanding your hiring practices to attract more candidates from diverse backgrounds, you can enhance the way your business functions and make your company more appealing to applicants. Here are five significant advantages of diversity in the workplace:

1. Better opportunities for creativity and problem-solving

A diverse workforce brings a wide variety of people with different experiences, skills, perspectives and insights together to solve problems. Diversity increases innovation, creativity and strategic thinking because teams of people who come from different backgrounds can draw upon their unique experiences and a wider range of knowledge to spark new, innovative ideas. You may also find that your employee relationships are stronger when coworkers can connect on a deeper level based on their backgrounds or shared experiences, improving workplace collaboration.

2. Smarter decision-making

Diverse groups of employees pull from a wider range of sources and experiences. That can help them make more educated decisions, leading to better results for your business. Diverse teams make better decisions than non-diverse teams up to 87% of the time, according to one study.

Teams that demonstrate diversity are proven to be smarter, more innovative and more socially aware, highlighting some of the many diversity benefits your business experiences when you expand your hiring practices. These individuals are known to process facts more carefully, which is a significant factor in making smarter, data-driven decisions.

3. An increase in profits and productivity

Ambitious professionals are often more attracted to inclusive companies. This can result in a more motivated, efficient workforce and increased productivity and profitability. According to an Indeed survey, 55% of job seekers say it is very or extremely important to work at a company that prioritizes diversity and inclusion.*

Not only are diverse teams more productive, but diversity benefits also become apparent in your company’s profitability. One study shows that companies in the top quartile for gender diversity on their executive teams are 15% more likely to generate above-average profitability compared to companies in the bottom quartile whose executive teams are predominantly white males.

4. Reduced rates of employee turnover

One of the most significant advantages of diversity in the workplace is that employees often feel more comfortable and satisfied in inclusive environments. They also tend to be more loyal and are more inclined to stay longer at companies where their unique contributions are recognized and respected.

Overall, workplace equality can increase confidence and encourage employees to achieve their full potential. Diverse teams often have higher morale and are more productive, innovative and loyal to the organization.

5. Improved reputation for your business

When businesses promote diversity, they’re perceived as more relatable, socially responsible and human by a greater number of people. This can improve your overall brand reputation, allowing you to attract new customers, partnerships and markets.

An Indeed survey shows that 17% of job seekers say inclusivity and diversity displayed in the hiring process is one of the top factors for helping them develop a feeling of positive connection or camaraderie with a company during the interview stage.** Focusing on diversity in the workplace creates a positive cycle for your business where more diverse employees result in better company culture, allowing you to attract a more diverse pool of top performers when bringing in new applicants.

Best practices for fostering workplace diversity at your business

So how can you start seeing the advantages of diversity in your workplace? Here are some best practices for championing diversity and inclusion as an employer:

Be fair and identify potential bias

Fairness and awareness of unconscious biases are crucial to a diverse workplace. Ensure you’re treating every employee fairly and that salary and benefits packages are consistent for all employees with similar roles or responsibilities. Consider performing an audit to identify any pay gaps that may exist.

You can further ensure that personal biases aren’t impacting the diversity in your business by taking time to identify what your own personal biases might be. Then, focus on making data-driven hiring decisions to avoid allowing those unconscious biases to impact who you’re bringing into the business. Having a structured recruiting program that relies on a team of individuals rather than a single hiring manager can also reduce the opportunities for bias in your workplace.

Related: How to Promote Gender Equality in the Workplace

Value all of your employees equally

Employees who are valued feel a greater sense of responsibility and connection to their company and teams. They’re more productive, innovative and try harder to contribute to an organization’s success.

Consider starting an incentive program, recognizing employees for their hard work on a regular basis and/or writing appreciation lettersto show your employees you respect and value their unique contributions.

Part of valuing employees is demonstrating that you trust them. You can do this by treating all your workers with respect, discouraging micromanagement and rewarding employees who take initiative or demonstrate the ability to work well independently.

Promote opportunities for career advancement

Opportunity is one of the primary factors a candidate considers when making a career move. According to an Indeed survey, 24% of job seekers said they started searching for a new job because there was no room for growth at their current company.***

Offer clear paths for career advancement and fair and equal growth opportunities to all employees. Additionally, consider analyzing past promotions at your company to identify any patterns or trends that may exist where certain types of employees get promoted less often than other groups of employees.

Educate your workforce on diversity and enforce respect

Educate your employees on the best practices and benefits of diversity in the workplace. Consider holding webinars, online training and/or hosting guest speakers to get the conversation about diversity going. Encourage discussion and welcome new ideas to create a culture of inclusion and belonging at your company.

Additionally, encourage employees to join or start employee resource groups (ERGs)to increase cultural awareness and ensure all employees feel accepted and valued.

Also, make employees aware of best practices for reporting incidents of discrimination or harassment in the workplace. Ensure that your human resources department is sufficiently equipped and trained in managing these occurrences properly so that all employees feel safe and heard at your company.

Support workplace collaboration

Since there are so many perspectives and opinions involved in diverse workplaces, it can sometimes be difficult to achieve cohesion in a team. That’s why it’s important to encourage and support collaboration. Collaboration strengthens the social bonds that can boost the unique power of a unified, diverse workforce.

Consider using company social events, team-building activities, group volunteering activities, mentor programsand casual coffee chats to strengthen your team’s bond.

Offer flexibility, and respect all beliefs equally

Offer flexible work locations and hours to support a better work/life balance and attract more diverse, qualified applicants. It’s also important to be aware of the different religious and cultural holidays that exist.

Consider offering floating holidaysto allow employees to substitute a public holiday with another day of their choosing, such as a religious or cultural holiday that isn’t on your company’s calendar. Doing so will make employees of all cultural backgrounds feel included, respected and valued. This is also an opportunity to educate other employees about the range of national holidays that your diverse pool of workers celebrates.

Similarly, you should avoid celebrating one holiday, such as Christmas, heavily in the office while ignoring others. Otherwise, you are communicating to your employees that you value some religious or cultural holidays more than others.

Implement a recruiting strategy for diversity

Instead of relying on educational background and work experience, consider implementing personality assessments during the hiring process to get a feel for candidates’ personalities and diversify your company culture.

Additionally, make your recruiting strategy appealing for a wide variety of people by:

  • Posting openings with groups or colleges that focus on underrepresented talent (e.g., Latinas in Tech, National Black Nurses Association, Campus Pride)
  • Offering internships to underrepresented groups
  • Highlighting your commitment to diversity on your website, especially in your careers/job section
  • Training your hiring managers and HR staff to avoid bias in recruitment
  • Encouraging your employees to make diverse referrals

FAQs about the advantages of diversity in the workplace

When considering the benefits of diversity in the workplace, employers commonly ask these questions:

What are the 4 types of diversity?

There are four types of diversity: internal, external, organizational and worldview. In a workplace, you should be striving to represent all of these aspects. Consider how diverse your current employees are (internal), whether you’re attracting a diverse pool of applicants with your current company culture (external), whether you’re representing different groups, identities, and nationalities at all levels of management (organizational) and what your company’s values are (worldview).

What do I do when one colleague is not accepting of another?

If introducing diversity into your workplace causes friction among existing employees, this is a red flag. You will need to deal with the worker who is discriminating against or harassing another individual through stringent measures to demonstrate that this behavior is unacceptable. Ensure HR is trained to handle these matters effectively, and if you cannot improve the situation, you may need to terminate an intolerant employee.

Why is it important to respect diversity in the workplace?

Putting emphasis on the benefits of diversity in the workplace and why it should be respected can help combat negative stereotypes or unconscious biases that individuals may have against certain groups. It is advantageous for the company, but also for the employees to gain experience collaborating and communicating with individuals from all walks of life.

What is a diversity strategy?

A diversity strategy is a process or framework that an employer implements to increase the number of employees at a company from different cultures and backgrounds to ensure that minorities are adequately represented.

*Indeed survey, n=750
**Indeed survey, n=750
***Indeed survey, n=1,000

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