5 Benefits of Cultural Diversity in the Workplace

What defines a company? Beyond the products it sells, services it offers or profits it generates, any organization is ultimately defined by the people who work there.

Managers and employees help shape a company’s mission statement and viewpoints, and they reflect an organization’s greater ideals and aims.

Globalization has taught us that understanding and embracing diversity is the first step to becoming an inclusive workplace.

“Diversity is a business strategy that needs to be built into every decision”- Emma Turner, Diversity and Ability

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, religion, or gender.

A diverse company culture:

• Recognizes the importance of multiple cultures to a team.
• Understands each team member's differences in terms of work styles.
• 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 new hires from all different cultures.
• 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 can improve the performance of organizations, particularly those relying on creativity and innovation.

Diverse composition is often accompanied by diverse perspectives and problem-solving techniques, and this is especially important for today’s remote teams.

The BCG study also shows that a diverse management team is also a valuable asset when it comes to innovation.

But as with any valuable asset, it needs to be developed to reach its potential.

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.

"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.

It offers people self-verification and power, enhances their social position and boosts feelings of self-worth.

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 cultural diversity. When differing identities are welcomed and celebrated in a workplace, 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.

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