Workplace diversity is taking the HR world by storm.

More than ever,

employers are prioritizing diversity and inclusion initiatives and investing
resources into making sure their teams are set up for success. Focusing on
diversity and inclusion is not only the smart thing to do for your business, but
also the right thing to do for humanity.
In this post, we’ll review the tangible and intangible benefits of workplace
diversity, the challenges that come with it, and what you can do to get started
on related initiatives today.

What is diversity in the workplace?

Diversity in the workplace refers to an organization that intentionally employs
a workforce comprised of individuals of varying gender, religion, race, age,
ethnicity, sexual orientation, education, and other attributes.
Diversity in the workplace leads to a plethora of benefits – both from an
internal and external perspective. However, that doesn’t mean implementing
diversity initiatives at work isn’t without its unique set of challenges. We’ll
review both sides of the equation in the sections below.

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The benefits of diversity in the workplace

1. New perspectives
When you hire people from diverse backgrounds, nationalities, and cultures,
you’re bringing a fresh array of perspectives to the table. This can lead to
benefits like better problem solving and increased productivity. Think of it as a
scavenger hunt: will you find more success by sending everyone on the team
in the same direction? Or will you gather information more quickly by having a
team that splits up strategically?
The idea of bringing new perspectives into the company can feel intimidating
for some hiring managers. People may fear potential awkwardness or
the introduction of unpopular opinions. But the research should put your mind
at ease, which shows that diverse teams see a 60% improvement in decision-
making abilities.
2. Wider talent pool
Employees are no longer simply seeking a 9-to-5 job that pays well. They’re
looking for space where they can grow, feel accepted, and be challenged.
That’s why a company that embraces diversity will attract a wider range of
candidates who are looking for a progressive place to work. As a result,
diverse companies are more likely to attract the best talent.
On the flip side, a company that also actively seeks diversity in candidates will
have access to a wider talent pool. While you should always be selective
about who you hire, being overly picky about traits that don’t matter will
significantly decrease the number of people you can even consider. That’s
why embracing diversity in background, thought, ethnicity, and other factors
are key to finding good hires.
3. More innovation
Workplace diversity leads to innovation. If you think about it, the correlation
makes sense. If you have a homogenous group of people, chances are that
everything – from their thought patterns to life experiences to problem-solving
skills – are likely to be similar as well. And sameness doesn’t lead to creative
solutions. On the other hand, a heterogeneous group of employees will
contribute unique perspectives that can lead to breakthroughs in thought.
It’s the same reason why companies go offsite for important strategy
meetings, or why a change in pace can help you solve that problem you’ve
been stuck on for days. New circumstances and environments are known to
spark fresh ideas. A recent study also found that companies that score well on
indicators of diversity tend to be demonstrably more innovative.
4. Better employee performance
Diversity and inclusion go hand-in-hand. When you create a work environment
where employees see a representation of a variety of cultures, backgrounds,
and ways of thinking, they’re more likely to feel comfortable being themselves.
This, in turn, leads to happier, more productive employees.
On the other hand, research has found that a strong, homogeneous culture can
stifle natural cognitive diversity due to the pressure to conform. If employees
don’t feel like they can be themselves at work, they’re more likely to fear
rejection and not produce their best work.
5. Increased profits
There are many studies that show diverse teams simply perform better and,
as a result, bring in more profits. A 2015 McKinsey report on 366 public
companies found that those in the top quartile for ethnic and racial diversity in
management were 35% more likely to have financial returns above their
industry mean. Additionally, those in the top quartile for gender diversity were
15% more likely to have returns above the industry mean. Another McKinsey
study found that U.S. public companies with diverse executive boards have a
95% hig