February celebrates Black History Month, making it more important than ever to highlight inclusivity in the workplace. Many companies lack diversity which can ultimately increase turnover and affect your bottom line. Employers will often overlook the need for a diverse workforce because they aren’t prioritizing their organization. Not only does having an inclusive hiring process help reach business goals, but it can also increase your company’s revenue.
First and foremost, we’ll cover what exactly a diverse workforce looks like: such a team would include employees of ranging backgrounds across ethnicities, age, gender, and abilities. With culturally diverse employees, companies can benefit from the three types of diversity. The first type of diversity that should be present at your organization is cognitive diversity, which is when there are various problem-solving skills and thought processes across the company. Second, lifestyle diversity is when your employees engage in different activities outside of work that impact their business decisions. Last but not least, brand diversity is when the business can attract diverse talent.
Benefits of having diverse employees
With these three types of diversity in mind, you might be wondering how this affects the business’ bottom line. Below, we’ve covered the benefits of a diverse workforce that will encourage you to start hiring employees of varying backgrounds.
If you’re struggling to get minority employees to stay at your company, you may need sufficient diverse individuals to ensure that no one feels like the odd one out. Employers should focus on hiring various individuals and creating a welcoming environment for them to thrive with anti-discrimination policies in place. The data shows that 47% of Black employees reported leaving a job because they witnessed or experienced discrimination at work. That number was 49% for Hispanic employees, nearly half of those surveyed!
This is where cognitive diversity comes into play: having different perspectives at work can help provide innovative business solutions through the varying ways diverse employees solve problems. In a study of various teams, researchers found that they outperform individual decision-makers 87% of the time. They also made decisions faster 60% of the time. This shows that diverse teams can affect the company’s bottom line.
While the connection between diversity and revenue may seem ambiguous, studies have shown that companies with an inclusive board of directors were 43% more likely to earn higher revenue. Not only that, but another report revealed that diverse teams also had a higher innovation revenue: 19 points higher than companies that didn’t have diversity in employees. The diverse teams had an innovation revenue of 45%, while homogenous teams had 26%. If you’re wondering what innovation revenue is, it’s defined as the profit earned from services or products offered by a company.
It is no surprise that diverse teams are more engaged in the work. A study of millennials uncovered that when they felt that they worked at an inclusive company, 83% were actively engaged. Conversely, only 60% reported active engagement at companies that didn’t value diversity. If the above benefits haven’t convinced you of the value of a diverse workforce, read more about diversity and inclusion in hiring at Velocity Global.