How diversity affects your businesses bottom line
In our latest guest blog, Kate Palmer Associate Director at Peninsula outlines “How diversity affects your businesses bottom line”
In the context of the workplace, diversity means bringing people of a wide range of backgrounds together to form part of a team.
A general misunderstanding about diversity is it only refers to race or gender. This is due to the increased focus on these areas over the last few years. However, diversity can apply to many aspects. This includes:
A diverse workforce brings with it many advantages. Together with inclusive workplaces, it leads to greater innovation, motivation and an overall increase in morale.
In this piece, we’ll explore the impacts of a diverse workforce on your company’s bottom line.
Diversity in the workplace
The connectivity of the internet and a changing marketplace mean businesses now target a wider audience. This is to increase their share in the market and with that their bottom line.
To do this they’ll need to appeal to a diverse audience. However, they can’t do this if they’ve only hired people from similar backgrounds who see things from the same perspective.
This is where diversity comes in. To effectively understand and engage with a changing marketplace, you’ll need to show you understand cultural dynamics.
A study of over 1,500 companies across eight countries by Boston Consulting Group (BCG) found that increasing diversity on leadership teams tends to lead to more innovation and improved financial performance.
There’re various instances where we can see the effects of a lack of diversity in the workplace. One of the most noticeable ones was the drama surrounding H&M and one of their tone-deaf campaigns. It featured a black child wearing an H&M hoody that said, “Coolest monkey in the jungle”.
This instance shows a blatant lack of diversity as a person of colour in the decision-making process would have brought up the fact it was culturally insensitive to have the hoody modelled by a black child.
While H&M has now apologised and appointed a diversity leader, it wasn’t before protesters raided multiple H&M stores in various parts of South Africa. Other examples showing the effects of lack of diversity within organisations include Nivea, Dove and Pepsi.
With protests, boycotts and bad press, the effects of a lack of diversity in the workplace are apparent. It affects the company’s image, productivity levels, employee satisfaction and the bottom line.
Promoting diversity at work
There’re many ways to increase your diversity levels and gain from the benefits that come with it.
We explored some solutions to the challenges in the workplace and picked five of the most cost-effective methods.
- Educating: Provide training to managers and other senior management on inclusivity and unconscious bias at work. When senior members of the team lead by example other members of the team can follow suit.
- It’s not all about race: A diverse workforce will include people from different backgrounds (social and economic), religion, sex, sexuality, physical and mental abilities, and nationalities.
- Diversity-friendly policies: By implementing policies that highlight the company’s stance on diversity, inclusion and discrimination, you’re showing your employees where you stand on issues relating to it. Consider allowances for religious holidays, offering on-site daycare and requests for flexible working to appeal to a diverse range of employees.
- Communication: This is an essential element in all aspects of a business but most importantly in promoting diversity. With it, senior management can put their point of view across using clear and concise language making it earlier to understand. When your staff understand policies, the reasons for them and the disciplinary procedures, they’re less likely to engage in workplace bullying and harassment both of which discourage diversity.
- Recruiting and promoting: Keeping diversity in mind from the recruitment stage reduces the issues that may arise due to it in the future. When hiring and promoting, your policies should set standards based on merit instead of meeting a quota.
Diversity affects all aspects of a business but most of all your bottom line. It’s a necessity for all businesses and has benefits for employers and employees alike.
To avoid claims of discrimination and an employment tribunal, you should consider workplace policies that address issues related to diversity and inclusion.
There’re various tactics to increase diversity at work, the most important of all involves switching current attitudes amongst employees and management.
Written by Kate Palmer Associate Director at Peninsula
If Diversity and Inclusion is important to you, why not join us on Thursday 24th October to discuss the findings of the recent survey we supported with the MPA and BIMA – https://creativeresource.co.uk/event/mpa-big-debate-diversity-inclusion