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The benefits of a diverse workforce
When one of Australia’s big telecom firms needed a large number of analysts at short notice for an urgent innovation program, it struggled to find the necessary brainpower locally.
A senior manager at the company asked newly recruited Indian migrant and IT engineer Rahul Chana if he could help.
Rahul, a former student at refugee and migrant settlement agency AMES Australia, was able to put him in touch with a company in Bangalore which could provide access to up to 2000 analysts immediately.
Rahul’s story is just one piece of a mounting body evidence that more diverse organisations achieve better performance.
For most of the world’s most successful businesses, having a diverse workforce is now part of their strategic plan because they know the benefits of such inclusivity are immediate and tangible.
A diverse workforce employs people from different backgrounds – different races, religions, ages, genders and abilities.
What you get with a diverse workforce are people who view the world differently, and who apply their personal experiences and knowledge to contribute unique perspectives to solving problems, accessing new, markets and shaping an organisation for the better.
We live in a time of global markets and unprecedented connectedness. There are currently more than 304 million migrants in the world who make up 3.7 per cent of the global population. Collectively, they remit more than $US900 billion home each year.
So, having a diverse workforce gives you a global perspective and the means to access diverse markets both at home and overseas.
Most organisations see the value every day of having people who have intimate knowledge diverse groups of people and the ability to communicate with and understand the needs of these communities.
Employees of differing cultures, abilities, creeds and experiences make a big difference, giving an organisation a true global perspective rich with nuanced understandings of human experience and culture.
A recent United Nations report said that the globalisation of business operations and the increasing inter-connectedness of people around the world meant business had a stake in the state of cross-cultural relations.
The report ‘Doing Business in a Multicultural World: Challenges and Opportunities’ said that to be successful in an inter-connected world, “businesses of all sizes in all countries must be able to compete effectively in diverse, multicultural environments”. The study says the ability to manage diversity is increasingly recognised by companies as a business imperative.
Studies show that if you put people with differing experiences and views of the world into a room, they’ll come out with better ideas than if you entrust the solution to a problem to group a group of people from the same background.
When colleagues of different backgrounds, cultures, nationalities, religions or perspectives come together, you get different approaches to the problem at hand. And that can be a great driver of success.
A study by McKinsey in the US found that companies with diverse boards have a 95 per cent higher return on equity than do those with homogeneous boards.
And diversity among employees better connects an organisation to its customers who, after all, are also diverse.
In a similar vein, workplace diversity boosts creativity. If you employ only employ people from similar cultures, perspectives, and socioeconomic circumstances, then you’re limiting your creativity and innovation. Conversely, employees from diverse backgrounds will bring diverse solutions to achieve common goals.
The more diverse your workforce, the more diverse your brainstorming, the more diverse your solutions and the more diversely productive your team.
Research published recently in the Harvard Business Review found that in homogeneous groups, natural cognitive diversity is stifled by the pressure to conform. Basically, people want to fit in, so they are cautious about suggesting radical ideas.
Another study on the relationship between diversity and inclusion on workplace engagement at sportswear company Nike has found highly diverse teams are 13 times more likely to be engaged than the least diverse teams.
The study, by global culture management company RoundPegg, surveyed more than 550 employees and found that with every 10 per cent increase in diversity there was a six per cent increase in engagement.
Also, a diverse workplace increases people’s feelings of being included, regardless of where they’re from of what their background or status.
This inclusiveness helps break down barriers and reduces the fear of being rejected, not only for who people are, but also for the ideas they voice.
Stanford University researchers looking at decision making in Silicon Valley saw decision making improve by 60 per cent when teams felt included. Another Deloitte study found innovation increased by 83 per cent when employees felt included.
Staff acquisition and retention
As many countries around the world, including Australia, continue to become more multicultural, increasing numbers of people are listing diversity as a factor in deciding where they want work. So, it follows logically that employers with diverse workforces will attract the best talent.
A survey by PwC in 2017 in the UK found that 54 per cent of women and 45 per cent of men researched a company’s diversity and inclusion policies before accepting an employment offer. Also, 61 per cent of women and 48 per cent of men also specifically considered the diversity of those same companies’ leadership teams. Unsurprisingly, those rise when looking at responses from minority group members.
The same report says that poor performance on diversity and inclusion represents a reputational risk for organisations.
It says failing on the inclusion front can mean that apart from deterring some of the best talent, you also put of customers and open yourself up to difficult questions from investors and stakeholders.
A few years ago, a campaign saw some of Australia’s most successful businesses are putting their money where their morals are by embracing a campaign to promote and harness cultural diversity in the workplace.
The group, including the Commonwealth Bank, Optus, Transfield Services, Ernst & Young (EY), Santos Accor Hotels, came together to push the message that that Australia’s cultural diversity can be used as a competitive advantage in business.
The Discover Diversity campaign, developed by the Migration Council of Australia, showcased how Australia’s diverse workforce has contributed to the success and prosperity of many leading organisations.
What the campaign showed is that our most successful corporate leaders recognise that a culturally diverse workforce is an asset to business and essential to drive future innovation and growth.
It reflects the overwhelming recognition within the business community that investing in Australia’s diverse workforce is integral to guaranteeing the future economic success of our nation.
Laurie Nowell
Read more:
https://www.unglobalcompact.org/docs/news_events/9.1_news_archives/2009_04_07/DBMW_Final_Web.pdf
https://hbr.org/2017/03/teams-solve-problems-faster-when-theyre-more-cognitively-diverse
