The importance of workplace diversity

Workplace diversity encompasses many factors – including race, gender, ethnic group, age, education, background and more.

And it is growing in importance, with an overwhelming body of evidence demonstrating that organizations with more diverse teams routinely outperform their less-diverse counterparts.

Diversity is also a major factor in shifting market share towards those companies that embrace it.

In the US for example, research has shown a strong relationship between racial and ethnic diversity and better financial performance.

Indeed, figures show that for every 10 per cent increase in racial and ethnic diversity on the senior executive team, Earnings Before Interest and Taxes (EBIT) rises 0.8 per cent.

In the United Kingdom, greater gender diversity on the senior executive team has also produced better performance results, with EBIT rising by 3.5 per cent for every 10 per cent increase in gender diversity.

Currently, women account for only about 16 per cent of the members of executive teams in the United States.

The figures are even lower in the United Kingdom (only 12 per cent), and women remain underrepresented at the top of corporations globally.

Therefore, considering the better returns diversity can provide, it is better to invest now; since diverse, productive workers help the company succeed, while unproductive workers only make it fall further behind.

Indeed, to make a real impact, both leaders and managers should aim to incorporate diversity policies into every aspect of their organization’s mission and purpose.

Of course, for this to be successful, management cooperation and participation is absolutely essential.

By Mike Peeters