5 Benefits of Cultural Diversity in the Workplace

While studies from Gallup and Linkedin tell us that supporting diversity and inclusion in your company increases engagement and the bottomline, many organizations still don’t see the myriad of benefits of diversity in the workplace.

When it comes to diverse workplaces, supporting different backgrounds and incorporating inclusive practices gives your company an edge with:

• Stronger decision-making
• Holistic problem-solving
• Better work culture (and increased retention)
• A team that reflects your customer base

Just to name a few.

Head of Diversity, Equity and Inclusion and Chief of Staff to the CEO at GitHub, Demetris White Cheatham defines culture as the “pulse of a company” or the “secret sauce” of what makes a company unique. That’s the people, the product, and the processes in your company. And it starts with trust.

“Employees have to trust this system,” Demetris said. “They have to trust that this place they’re walking into is going to take care of them. That it’s going to make them feel like they belong and that they’ll get meaningful work and opportunities to contribute to that.”

“The culture is going to give them the tools that they need to succeed and thrive,” she told Cooleaf’s own John Duisberg during The Great Retention podcast.

With Millennials and Gen Z increasingly taking over the workforce, we’re seeing prospective talent prioritize that sense of trust and belonging. More people want organizations that support diverse groups, different cultures, and worldviews.

Top organizations like Github, Salesforce, Deloitte, and Cox show us that cultural diversity isn’t a trend. It isn’t lip service. It makes their organizations stronger.

Scroll below to learn about benefits of diversity in the workplace.

What Is Cultural Diversity?

Culture is considered to be the underlying values that direct how people behave. Cultural diversity, aka Diversity, Equity, and Inclusion (DEI), in the workplace is a result of practices, values, traditions, or beliefs of employees based on race, age, ethnicity, disabilities, religion, sexual orientation, or gender.

A diverse company culture:

• Recognizes the importance of multiple cultures to a team.
• Understands each team member's range of skills.
• Encourages viewpoints or ideas from employees with different backgrounds.
• Accepts the cultural differences of coworkers and finds ways to implement them into the growth of the company.
• Puts policies in place to encourage a sense of belonging for all employees
• Does not tolerate discrimination or microaggressions in the workplace.

Creating a workplace of diversity requires ongoing efforts and routine evaluation of the current work environment, while continuously comparing it to the goals of a diverse workplace.

While cultural diversity has many positive impacts on a company, we’ve highlighted five of the potential benefits in the workplace that every company can enjoy.

Ready to unlock the power of DEI? Our DEI Calendar is here to help!

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Drives Innovation and Inspires Creativity

Cultural diversity brings together diverse perspectives, knowledge, and skills, which in turn supports the generation of innovative ideas.

A study by Boston Consulting Group (BCG) showed a significant correlation between diversity and overall innovation. This shows that diversity in your teams and leadership can improve the performance of organizations, particularly those relying on creativity and innovation.

Different backgrounds offer diverse perspectives and problem-solving techniques, and this is especially important for today’s remote teams. A 2013 Harvard Business Review study also supports this. When cultural background or ethnicity is shared by a member of a team, they’re more likely to find an answer to a client’s needs.

• A diverse workplace is a more accurate representation of the world at large, so your people can speak to your customers or clients in way that resonates
• Different cultural backgrounds and point of references give us new ways to think outside our way of thinking
• Learning to work in organizations with diverse employees strengthens our own empathy, listening, and learning muscles
• A diverse workforce expands how we approach work and processes and make it better

Attracts Top Talent

Accepting a culture of diversity gives you the opportunity to recruit a more experienced talent pool of candidates.

Studies show that today’s candidates are prioritizing diversity when choosing a workplace. About 1 in 3 employees and job seekers (32%) would not apply to a job at a company where there is a lack of diversity among its workforce. Additionally, when you attract productive team members and leaders, they begin to shape the company culture for the better, further encouraging more open-minded, inclusive applicants with divergent skill sets  and competencies to apply.

In short, cultural diversity increases company reputation.

"Many companies have been making commitments around diversity and inclusion recently, but now job seekers and employees want to see action and real change from employers," said Glassdoor Chief People Officer, Carina Cortez.

"It's critical to understand how different groups look at D&I from their own work experiences, reinforcing the overdue need for all employers to improve when it comes to diversity, inclusion and belonging in the workplace."

Higher Productivity and Performance

Feelings of group membership and valued personal uniqueness are essential for individuals, and contribute to high, ongoing employee engagement.

As Github’s Chief of Staff and Head of DEI Demetris said, that feeling of inclusion and diversity helps build employee trust. More importantly that feeling of trust should go both ways.

"Leadership has to trust that the culture they created has an environment where people can do the best work of their lives. Employees have to produce maximum results of their customers and shareholders,” Demetris said. “That culture has to have a balance where the employee can trust it and leaders can trust it so they both get what they need.”

In a multicultural environment, diversity is intuitively much more visible and understood. So conscious efforts of promoting inclusion will enable companies to better manage and harness their workforce, lead to more committed and satisfied employees, and give companies a competitive advantage.

According to Deloitte, diverse companies enjoy 2.3 times higher cash flow per employee and Gartner found that inclusive teams with diversity initiatives improve team performance by up to 30 percent in high-diversity environments.

In a separate BCG finding, companies with diverse management teams had a 19 percent increase in revenue compared to their less diverse counterparts, leaving no doubt that diversity and inclusion impact the bottom line.

Although inclusion offers clear benefits, it’s difficult to implement. A major issue is that many companies believe they’re already promoting an inclusive culture of diverse teams, but, only 40 percent of employees agree that their supervisor fosters an inclusive environment.

Finding ways to embrace diversity in your organization is key to unlocking its full potential as an inclusive workplace offering unique perspectives.

Reduces Employee Turnover

A diverse workforce plays a vital role in employee retention, especially since everyone wants to work for a company that makes them feel welcomed and appreciated.

Companies that embrace diverse cultural backgrounds in the workplace develop an environment where different working styles and learning techniques are not only accepted, but ingrained in the work culture.

When employers engage in decision making that provides an inclusive workplace where employees come together with different backgrounds, employees can work together to get to know and respect one another.

When employees respect diverse backgrounds and cultures there is a lesser chance of internal conflict, leading to a happier team that is more productive throughout their workday.

Turnover rates skyrocket when employees have vastly different experiences from their peers, or they sense unfairness. Research from the Kapor Center for Social Impact shows that women in tech jobs are two times more likely than men to quit, and Latino and black employees in the same industry are 3.5 times more likely to leave than white or Asian employees.

If an employee feels diversity isn’t valued, they won’t find the firm ground required for job growth. For example, it would be difficult for anyone to picture themselves working up to an executive level if there are no other minorities in those positions.

A diverse workplace where everyone values differences will allow workers to see themselves at that company long-term — because they want to be there.

The future of HR needs diversity. Download the guide to learn more!

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Expands Customer Base

Diversity also provides a way for organizations to expand their reach. Researchers from the Harvard Business Review found that organizations with diverse leadership are up to 70% likelier to capture new markets.

As one of the top benefits of diversity in the workplace, the fresh thinking, strategies, techniques, and perspectives diversity brings in helps to attract new customers that keep organizations expanding and profitable.

Satisfied employees who embrace the importance of inclusivity can understand and better serve the public, as they value cultural differences, diverse employees and perspectives, and the ability to continuously learn and engage with a variety of cultures.

Approximately 48% of employees believe that respect is the most essential factor for a culture of inclusion, according to a study completed by Quantum Workplace.

Respect, empathy and valuing the customer perspective are all skills that drive the customer experience and areas that teams can derive exceptional value.

Diversity and Inclusion Matter

Our cultures shape who we are. Company leaders who wish to uplift and care for the people they employ — and create a workplace environment that retains those valuable employees — must not only acknowledge but celebrate their diverse workforce.

When differing identities and diverse cultural backgrounds are welcomed and celebrated, both the employees and the organization benefit.

If you're looking for other employee engagement ideas as you grow diversity, equity, and inclusion on your team, let us know! We'd love to hear from you.