Four business benefits of diversity
Many employers are still unaware of the advantages of a diverse workforce. Yvonne Smyth, Director and Head of Diversity at Hays Recruitment* explains the benefits here.
As the recently launched Hays Global Skills Index illustrates, many companies are suffering from skills shortages. Increasing the diversity of their workforce is one way they can help to address these skills gaps. By improving access to a wider pool of talent, organisations will be better able to improve their performance, grow their businesses and secure future success.
The benefits of harnessing workplace diversity are proven and tangible. Here are four of the most important areas where diversity can make a real difference:
Diversity is crucial to fostering innovation.
Perhaps the most prominent benefit is innovation. Innovation is a very important differentiator for many organisations – it allows them to come up with new services, products or improved ways of delivering those services or products.
The more diverse the team, the more ideas are usually put forward and the greater the chance is that you’ll come up with the best possible outcome.
In a Forbes study of 321 large global enterprises, with at least $500 million in annual revenue, 85% agreed or strongly agreed that diversity is crucial to fostering innovation in their workforce.
My colleague Christine Wright, Managing Director of Hays Asia, who was recently named amongst the top 100 most influential female leaders in the staffing industry, said: “A diverse workforce can give an organisation huge creative potential as our experiences influence the way we see a problem and the solution we come up with. In fact, the more diverse the team, the more ideas are usually put forward and the greater the chance is that you’ll come up with the best possible outcome.”
This is in stark contrast to a workforce that only employs the same sort of person over and over again. Such a workforce will deliver more of the same old attitudes and solutions to problems again and again, and as such is not a workforce that’s likely to see much innovation.
2. Improved attraction and retention
A diverse workforce sends a strong message to candidates.
You’re more likely to discover the most suitable skills and experience if you open yourself to a diverse pool of candidates. In contrast, employers that limit diversity parameters effectively limit the number of candidates they can consider and therefore their ability to fill roles with the very best person for the job.
A diverse workforce also sends a strong message to future candidates that your organisation has a truly inclusive working environment, thus helping you become known as an employer of choice.
Christine said: “The increasing mismatch between the skills employers need and those available continues to affect the ability of business and the economy to grow to its maximum potential.” One obvious solution to addressing these skills shortages is to take advantage of the flexibility that a diverse talent pool offers.
A diverse workforce also sends a strong message to future candidates that your organisation has a truly inclusive working environment, thus helping you become known as an employer of choice. This can be a very effective differentiator to attracting key talent in the candidate market.
Of course, when your employees feel they can be their true and whole self at work, you tend to gain a very solid staff retention benefit. As a recruiting expert, this is something we have first-hand experience of – we find that employees who feel valued in an inclusive working environment, require significant and compelling reasons to even consider new job opportunities for which they may be otherwise well suited.
3. Improved financial performance
Gender parity can drive financial performance.
“Diversity is vital to the workplace because it improves productivity and makes bottom-line business sense. Hiring a demographically diverse workforce can improve a company’s financial performance,” said Christine.
Studies released in recent years, many with a particular focus on the impact of improving gender balance, have corroborated this statement. For example, McKinsey & Company recently published a report that concluded: “If every country matched the progress toward gender parity of its fastest improving neighbour, global GDP could increase by up to $12 trillion in 2025”.
Earlier this year, Quantopian, a crowd-sourced hedge fund initiative, found that women-led companies in the Fortune 1000 performed three times better than the S&P 500 companies run predominantly by men between 2002-2014. Making gender diversity, and diversity in the wider sense, a business priority can lead to financial benefits and help a company realise its full potential.
4. Meritocratic culture
Equal opportunities allow for high performance.
Diversity also creates an environment where employees, given an atmosphere where they can be their authentic self, are likely to demonstrate their full value, and are encouraged to be the best they can be regardless of gender, age, disability or nationality. “Such a meritocratic view drives a high performance culture where everyone is given equal opportunity to progress and are rewarded and promoted based on their performance alone,” said Christine.
Ideally in a workplace that operates as a true meritocracy, the best people are promoted and the best ideas are implemented. Those people who want to participate, have put in the work, gained results and proven themselves are respected, rewarded and promoted. No other factors come into the promotion decision making. The challenge many organisations face today is to decide which actions they can take to best level up the currently imbalanced playing field.
Different sectors may require different actions, but the common goal shared by all is to have a progressive organisation where the realisation of full potential for an employee is based on true merit alone.
A final thought
There is still much work to do in realising the benefits of truly diverse business, but many of the foundation stones have been laid. Different sectors may require different actions, but the common goal shared by all is to have a progressive organisation where the realisation of full potential for an employee is based on true merit alone.
About the author
- Yvonne Smyth is Group Head of Diversity for Hays plc and has over 20 years' professional recruitment experience.
- She works closely with organisations and Hays specialist consultant teams to create and implement diverse recruitment strategies that effectively support and increase the representation of more diverse staff profiles within their businesses.
- Yvonne chairs Hays Leading Women, a fast growing and highly regarded membership group for experienced professional women from across the world of work.
- Yvonne initially trained and qualified as a litigation lawyer with international law firm Norton Rose Fulbright.
This article was first published on the Hays website.
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