Diversity is more than meeting a quota or maintaining your employer brand. A diverse team makes it easier to solve problems, brings a variety of perspectives, and drives scalability in ways you didn’t think possible. Companies across the world have realized that advocating workplace diversity isn’t just the right thing to do, it is also profitable for the business.
Why Business Leaders Must Get Proactive About Diversity
There are two ways to go about building a diverse workforce.
You could go down the passive route, where you avoid biases and follow merit-based hiring/promotions in the hope of ending up with a diverse team. But this leaves too much up to chance – depending on your local demographics and the nature of the business, recruiters might find themselves leaning towards a one-dimensional (i.e., non-inclusive) model. Team leaders end up with cookie-cutter team profiles, losing out on the benefits of diversity.
On the other hand, businesses that proactively become diversity leaders will see tangible outcomes:
- The most diverse companies enjoy 14% higher EBIT margins than the least diverse companies.
- Cognitive diversity (where people from various cultures, economic backgrounds, educational qualifications, etc. contribute diverse ideas) is strongly correlated with performance. According to research, a high cognitive diversity team takes 21 minutes to complete a challenge that a low cognitive diversity struggles with for 60 minutes and fails.
- Experts believe that diversity and inclusion can improve talent management (71%), employee satisfaction (64%), collaboration (57%), and brand reputation (57%).
In today’s connected world, there’s nothing stopping business leaders from crossing geographic borders, hiring someone from a different background, and gaining from their unique perspectives. There are several ways to leverage this opportunity.
How Diversity Helps Teams Perform Better: 3 Action Points for Leaders
Diversity is ineffective when sitting in a dusty corporate handbook as mere theory, without proper enforcement. Companies who see it as a compliance issue will lose out to more progressive competitors. That’s why it is so critical for business leaders to:
1. Increase diversity on your teams through purposeful hiring
We all know about diversity hiring, where recruiters look for a specific candidate profile to increase representation in the workforce. Diversity hiring definitely has its role – but to achieve performance improvements, leaders must look at purposeful hiring. Whenever there is a vacancy in your team, the job post needs to explicitly invite participation from candidates of different ages, ethnic backgrounds, gender preferences, educational qualifications, countries of origin, ability/disability, and the like.
Creating purposeful job ads helps break down inhibitions and attract a more diverse applicant pool. For instance, women apply to 20% fewer jobs than men, and recruiters are 13% less likely to click on a woman’s profile when it turns up on a search. Purposeful hiring can turn the needle in the right direction and get you a more diverse team.
2. Embrace diversity to optimize solution development
As we said, teams that are high on cognitive diversity are better at problem-solving and information analysis. Several studies confirm this – companies with more women were more likely to bring new innovations into the market. Also, teams headed by culturally diverse leadership are more likely to develop new products than those with homogenous leadership.
If you are in the service industry, an inclusive and diverse team is 1.26 times more likely to satisfy its customers and 1.31 times to be responsive than its less inclusive counterparts.
While the first action point enables access to diverse talent, this step is all about mobilizing it. Readily accessible collaboration tools, training to build workplace equity, and one-on-one coaching can give every employee the motivation they need to find their voice. Capture these diverse ideas through brainstorming sessions and formalized communications to drive solution development.
3. Be sincere about your diversity efforts and its goals
Transparency and sincere involvement are at the heart of every successful diversity and inclusion plan. Today, nearly every company is eager to jump on-board the “diversity hype” bandwagon, without always putting in the requisite efforts at the back end. Leaders must distinguish themselves from the crowd by being vocal about their objectives from diversity.
Are you looking to disrupt existing team dynamics? Do you need localized expertise for new market expansion? Are you diversifying into new skill areas? Having concrete goals in place will help to better distill your diversity efforts and bring about tangible outcomes.
It can also stave off potential risks from poorly throughout initiatives: “If a cultural diversity plan is implemented without due forethought and effort, it could go off the rails. Without a well-researched and thoroughly thought-out plan, departments may end up hiring candidates, not because of their qualifications, but because they fit the picture the company is trying to create,” explains Janine Schindler, Leadership Coach & Facilitator For The Left-Brained Analytical Leader & Founder of JAS Leadership.
Cliff Notes on the Road Ahead
2020 is a landmark year for companies, as the current economic climate could make it difficult to stick to your diversity and inclusion roadmap. McKinsey found that low-paying roles and historically vulnerable groups are more at risk than ever before. By keeping these three ideas in mind, business leaders can stay squarely focused on the future even during these complex times, making sure there is a brighter tomorrow for everyone.