Diversity is the new buzzword around HR departments, but when people think of diversity they usually think of racial or ethnic diversity. In truth diversity encompasses so much more. Real diversity includes race, ethnicity, gender identity, age, religious affiliation, socio-economic status, education, professional experience and more. In fact, everything that makes one person different from another.
Why is diversity taking HR departments by storm? Below we will look at five real benefits from having a diverse workplace.
Creativity and innovation
It is said that two minds are better than one, but is this really the case when the two minds have the same upbringing, gender identity and education? Homogenous teams (those with people who are all very alike think Minions!) easily fall into the trap of group thinking where they make lower quality decisions in the interests of conforming with the rest of the group. So, what about two minds where upbringing, gender identity and education (amongst other things) are different? One 2015 study found that companies run by culturally diverse leadership teams were more likely to develop new products than companies with homogeneous leadership teams.
A separate study looked at gender diversity on research and development teams and found that companies with more women were more likely to bring new innovations to market within a two-year period. Having a diverse team allows for diverse perspectives, which in turn allows for more out-of-the-box thinking and better ideas overall.
Better decisions
When you have a team of people from different nationalities, backgrounds and cultures you have a fresh array of perspectives. Different perspectives can lead to better problem solving and ultimately better decisions. Think of it as a quiz. If your team is made up of players with a wide variety of interests, for example, sport, politics, history and geography, you are more likely to score well on the quiz questions. And research also supports this approach. One study that analysed around 600 business decisions found that diverse teams were shown to make decisions faster than individual workers and benefitted from a 60% improvement on decision making.
Employee recruitment
By having a diverse recruitment policy, you are opening up a much wider talent pool. Think about education for example. Some companies will only employ workers with a university degree, but experience in the industry could be just as valuable, or perhaps more valuable. Too much education can also cause overly formulaic reasoning, whereas the person without the university education may be more likely to come up with the one out-there idea that revolutionises the business.
On the flip side too, diversity is something that candidates are keeping an eye out for. A recent study by Glassdoor found that 76% of job seekers say diversity is an important factor when considering companies and job offers.
Employee retention and performance
Beyond getting talent through the door, diversity also helps keep your best employees around. A 2018 survey from Deloitte discovered that 69% of employees who believe their leadership teams are diverse see their workplace as motivating and stimulating. Why would this be the case? One such view is that in a diverse workplace there is no need to conform, allowing employees to be themselves. Being themselves means they are happier and therefore more productive. Employees who view their workplace as motivating and stimulating are more likely to stay working for that company for longer.
Increased profits
So, what do the above four benefits mean really to the bottom line? Actually, diversity has a very positive impact. McKinsey analysed 366 public companies across a variety of industries. Those that were in the top quartile for racial and ethnic diversity were 35% more likely to have financial returns above their national industry medians. Those that were in the top quartile for gender diversity were 15% more likely to financially outperform their industry medians. Better decisions, happier more productive employees and more creativity and innovation really does lead to better business performance.
What has all this got to do with Business Process Outsourcing?
Business Process Outsourcing (BPO) offers companies the opportunity to expand the diversity of their company. At The Back Room we benefit from working with our team in the Philippines. If you would like to benefit from this diversity, along with the benefits of remote working, please, get in touch.