1. Diversity improves decision-making.
A diverse workforce with a variety of cultural experiences can help to improve a business’s decision-making.
Teams that are age, gender, ethnically, and geographically diverse make better business decisions because of the variety of experiences and backgrounds. A business leader who considers those multiple and countering viewpoints can make more informed decisions.
There are at least two sides to every decision, and understanding other ways of thinking about an issue can help teams and business owners arrive at the best possible decision.
2. Diversity reduces risks.
You don’t know what you don’t know. As a business leader, if you can accept this premise, you may be more receptive to learning and listening to others. Being open to feedback from a diverse workforce reduces the chances of committing a culturally insensitive mistake.
A lack of cultural awareness can have significant financial implications for a business—both internally with employees, and externally with customers and the general public. Cultural insensitivity can lead to bad PR, strained business relationships, and even the loss of business. Creating an inclusive culture with a strong Anti-Discrimination Policy encourages employees to speak up when they see something subtle, or not-so-subtle, that may be offensive.
3. Diversity increases performance.
People from different backgrounds bring new ways of thinking or problem-solving to a workforce. A diverse and inclusive workplace encourages collaboration and typically produces more new ideas. When employee performance improves, companies tend to see financial gains as well.
A diverse team may be better able to serve and retain customers. Businesses with diverse workers, particularly within the management, have demonstrated better financial performances and business outcomes.
4. Diversity improves employee retention.
Diversity leads to improved employee engagement and retention. People stay longer when they feel valued and see growth potential within an organization. Updating your Employee Handbook to provide clear, inclusive, and transparent policies can go a long way. When employees feel that they are supported and included as part of a team, it improves morale. In addition to improving employee retention, diversity helps when it comes to recruiting new talent.
5. Diversity boosts a company’s reputation.
When a business showcases a diverse staff, this not only improves retention and recruitment, but can have an overall reputation boosting effect for a company. Diverse and inclusive companies and brands are particularly important to Millennial and Gen Z customers, who consider these factors for both personal and business purchases.
6. Diversity fuels growth.
Diverse companies are better equipped for growth and globalization, or just expanding locally, regionally, or nationally. Diverse workforces support growth by being:
- More innovative, productive, and cooperative.
- Less prone to unconscious bias.
- Able to benefit from multiple viewpoints.
Many of the above reasons also play a large role in how diversity fuels growth. For example, an improved reputation in the market can lead to an increase in demand, which may require adding more team members or locations.
If you have more questions about improving diversity in your business, reach out to a Rocket Lawyer network attorney for affordable legal advice. If you need tax help, Rocket Lawyer now offers tax services with Rocket Tax™. Don't do your taxes™ – Let us do them for you.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.