The Competitive Advantages of a Diverse Workforce
By Gwendolyn F. Turner, Founder and President of Princeton Proper. Gwendolyn also serves as a member of SMB Experts, an Oracle-sponsored panel comprised of today’s SMB thought leaders.
What does your organization pride itself on? Is it record earnings? Is it incremental growth year–over-year? Or, maybe it is landing great clients?
If your focus is strictly on the bottom line, you may be overlooking a key tool that will help drive strong top line results. Research from McKinsey and Company found companies with more diverse workforces perform better financially. The study showed organizations in the top quartile for gender were 15% more likely to have better returns, and the same correlation was found regarding ethnic diversity. McKinsey concluded that homogeneous companies produced weaker results than companies with diverse and inclusive practices.
What does all of this mean? It means that diversity matters.
Diversity is an impactful business tool that creates strong strategic advantages. It is much more than compliance. It is a cultural shift in your business that goes beyond counting heads or simply issuing statements on inclusive practices. Diversity starts with top leaders in the company and is demonstrated through deliberate actions, including hiring diverse talent and creating inclusive business practices that foster belonging and positive employee experiences.
I have witnessed firsthand through my work with small- to medium-businesses that the differences in perspective and experiences exhibited by diverse teams helps create winning teams. My clients consistently exceed their annual goals, retain more employees, and have more positive brand ambassadors than their competitors.
Here are two more reasons why diversity should be embraced by your organization and become the cornerstone to your mission and actions:
1. Employer of Choice: The battle for talent is on. Today, companies of all sizes are aggressively seeking the best and the brightest talent to help build their businesses. Additionally, employees look for organizations that align with their values and offer diversity from the board of directors down through the management ranks of the company. This is important to employees because it demonstrates a willingness to innovate and accept new ideas. Companies that demonstrate inclusive cultures and a diverse workforce, on average, see 39% higher customer service satisfaction, 22% higher productivity, higher profitability and less turnover than their counterparts.
2. The Market is Diverse and Your Customers Care: The purchasing power of women and ethnic minority groups in the United States is on the rise. Women have an estimated $40 trillion in purchasing power. Ethnic minorities hold almost $4 trillion in purchasing power. Large corporations are forming partnerships with small and medium-sized businesses that can help them better connect with these growing demographic groups. In our work with enterprise level companies, they recognize diversity and inclusion as competitive advantages.
Diversity is a tool that will help facilitate business success. As you continue to build a diverse team in your company, remember three points:
Be Thoughtful: Think about how you can make an impact on your business through diversity strategies. Keep in mind that diversity is a business process; it’s not an overnight fix to an issue. Consider how your strategy will be embraced at every level of the organization.
Do Your Research: There are excellent examples of companies that have embraced diversity and inclusion in almost every industry. Take time to speak with your customers, suppliers and partners about what works well within their organization. Be proactive in finding best practices while avoiding obstacles.
Ask for Help: Building a diverse workforce is an investment of time, energy, and money. Don’t try to build it alone. Larger corporations should include department heads, Human Resources, and C-suite level executives on creating the strategy for their company. Smaller businesses should look to outside diversity experts or advisors to help them insure that they are creating a competitive advantage with the new additions to their teams.