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Hiring a diverse workforce in backgrounds and perspectives isn’t just about avoiding discrimination; it’s about giving your business its best chance for success. According to Gartner, “Differences of age, ethnicity, gender, and other dimensions foster high performance.”
Your company’s goal in hiring for diversity shouldn’t be to represent each age, gender, race, and ethnicity group in proportion to the general population. Instead, your aim should be for “cognitive diversity,” which brings people together with different styles, habits, and perspectives. People from different backgrounds tend to think differently, and the blending of perspectives creates opportunities for creative thinking, stronger problem solving, and innovation. It also helps to avoid the dangerous pitfalls of groupthink.
Hiring managers give your company the best chance for cognitive diversity when several groups are represented in your collaborative teams. Per Gartner, "The difference in employee performance between non-diverse and diverse organizations is 12%." The same study predicts that through 2022, 75% of companies with diverse and inclusive decision-making teams will exceed their financial targets.
Several reports show similar business benefits:
The bottom line: diversity boosts business performance because collaborative teams can leverage different perspectives and ways of thinking to enable faster, smarter decision-making and innovation. So how exactly do we arrive at this bottom line? Here, we break down the benefits that diversity can bring your business:
A workforce with varying gender, age, religion, race, ethnicity, cultural background, sexual orientation, languages, education, and physical and mental abilities brings different educational backgrounds, skills, and experiences to the table. Especially if your company does business in multiple market segments and/or international markets, having a team with diverse perspectives can elevate your company above less diverse competitors.
Once the diversity ball starts to roll, it gathers momentum. The employees you hire offer additional recruitment and referral channels through which you can find talent because they can reach out to people in their networks that you might not otherwise be able to access. Companies that are late to realizing the benefits of hiring for diversity will not have the same level of access.
Teams solve problems faster when they are more cognitively diverse, according to a Harvard study. They educate one another in new ways of thinking, approaching challenges, sharing problem-solving perspectives, and becoming more flexible and adaptable individually and as a group. When one way fails or takes too long, another is bound to be more effective or faster.
Neurological research by Josh Bersin demonstrates that workers are more collaborative, productive, and innovative when they feel part of a team. This is because the human body produces hormones and energy that stimulates the brain and raises work performance in diverse collaborative groups.
Groups with diverse perspectives experience more creative stimulation from continual exposure to new and novel ideas. The freshness of inputs an individual receives in a diverse group and the melding of original outputs usually results in fresh, new approaches. This benefit would be much more difficult to achieve with a cognitively similar group.
A Cloverpop study found that when diverse teams of three or more people make a business decision, they outperform individual decision-makers up to 87% of the time and make decisions with a 60% improvement over non-diverse teams. This benefit is maximized with greater gender, ethnic, and age diversity.
Diverse and inclusive workplaces lead to engaged employees, according to the Society of Human Resource Management. According to a Gallup analysis, business units that scored the highest on employee engagement showed 21% higher levels of profitability than units in the lowest quartile and scored 17% higher on productivity.
When employees feel valued for their individuality, they are more likely to remain with a company. If "lack of a sense of belonging" is a major factor during exit interviews, there's work to be done. High employee turnover can cost a business money, morale and reputation.
A decade ago, you may have viewed diversity in your workforce as a luxury, especially for its optics. But diversity and inclusion are no longer just about avoiding discrimination. The research clearly shows that diversity and an inclusive culture dramatically boost employee and business performance. The best-run large organizations have been staunch believers in these ideas for years, and now the smartest SMBs are discovering the same truths.
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