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The golden rules for leading a diverse team at work

Posted by Neha De

August 16, 2021    |     4-minute read (955 words)

Research done by Pew Research Center a few years ago found that “Americans are more racially and ethnically diverse than in the past, and the U.S. is projected to be even more diverse in the coming decades. By 2055, the U.S. will not have a single racial or ethnic majority.” 

This finding is bound to have a major impact on the workforce and how businesses prepare to handle diversity in the workplace. So, what exactly is workplace diversity? 

Workplace diversity touches upon the myriad differences among individuals who work in a company. It focuses on how these individuals identify themselves as well as how their colleagues perceive them. Workplace diversity can be characterized by understanding, embracing and appreciating the differences when it comes to gender, race, religion, age, ethnic groups, citizenship status, sexual orientation, military service, mental and physical conditions, as well as other prominent differences between different people. 

Diversity at the workplace is not a new concept. Its origins can be traced back to 1948, when President Truman signed Executive Order 9981 to end segregation of the armed services. 

7 benefits of workplace diversity

There are several advantages to having a diverse workplace. For one, companies that are open to hiring a diverse workforce have a larger and smarter pool of candidates to choose from, which can help them to find more qualified people.

Check out these seven research backed reasons why having diversity at the workplace is good for the bottom line of any organization: 

  1. Leads to higher profits: Several studies have shown that cultural diversity in the workplace can lead to greater profits for any business. According to McKinsey & Co’s “Delivering through Diversity” report, organizations in the top-quartile for ethnic/cultural diversity on executive teams were 33% more likely to have industry-leading profitability. Another report by Credit Suisse Research Institute found that large-cap companies with at least one woman on the board have outperformed their peer group with no women on the-board by 26% over the last six years.
  2. Breeds creativity and innovation: Hiring candidates with different views on the same issue will give rise to fresh ideas, thus improving the creativity of everyone involved and increasing room for innovation. A study by Boston Consulting Group reported that enterprises having “above-average diversity on their management teams also reported innovation revenue that was 19 percentage points higher than that of companies with below-average leadership diversity — 45% of total revenue versus just 26%. Survey respondents from a Forbes study “overwhelmingly agreed that a diverse and inclusive workforce brings the different perspectives that a company needs to power its innovation strategy.”
  3. Increased productivity: Diversity at the workplace not only encourages creativity, but also increases productivity. In fact, according to an article on Entrepreneur.com, “creativity leads to productivity, provided that the workplace environment is developed and nurtured in a way that allows the two to peacefully coexist.” The more diverse and inclusive the workforce, the more diverse the brainstorming, the more diverse the solutions and the more diversely productive the employees. 
  4. Leads to better decision making: Harvard Business Review found that teams can solve problems faster when they are more cognitively diverse. Employees from different cultures and backgrounds are more likely to come up with diverse solutions to a problem. This leads to more educated and thought out decisions and better results.
  5. Provides better insight into consumers: Customers are diverse, too. For instance, research shows that in the U.S. alone, people with disabilities control an estimated $544 billion in annual disposable income. Therefore, companies that have disabled workers on their payroll would have greater insight into the kind of services and products that people with disabilities go for. 
  6. Encourages employee engagement: Research from Deloitte Australia found that staff members that are focused on diversity and inclusion tend to deliver the highest levels of engagement. This is primarily because when employees feel included, valued and empowered, they are likely to be more engaged and in turn more productive and easier to retain. 
  7. Improves brand value: Diversity boosts reputation and helps attract top talent. Organizations that support diversity in the workplace are perceived as more socially responsible, which opens the doors to new markets, business partners and customers. According to a survey by PwC, “over 80% of participants said that an employer’s policy on diversity, equality and workforce inclusion is an important factor when deciding whether or not to work for them.” 
How to build and manage a diverse workforce 

There are myriad benefits to be gained from incorporating opinions, ideas and perspectives from a variety of different cultures and backgrounds. Check out these five tips on how to build and manage a diverse workforce:

  1. Overhaul the recruitment process: In order to build a diverse workplace, it is important to hire employees from a variety of backgrounds. This requires leaders and hiring managers to overcome bias in interviewing and assessing talent. 
  2. Communicate, communicate, communicate: To effectively manage an inclusive and diverse workplace, businesses must ensure that they communicate with employees regularly. For instance, to overcome cultural and language barriers, they must translate all procedures, policies and other important information using pictures and symbols whenever applicable.
  3. Treat all employees with respect: Companies should never make assumptions about their staff members who are from diverse backgrounds. They must judge successes and failures based on individual merit instead of attributing actions to their background.
  4. Set one standard of rules for all employees: This should be done regardless of background. Companies must ensure that all necessary actions follow a standardized criteria to make sure each employee is treated the same.
  5. Encourage employees to work in diverse groups: Employees who work in diverse teams learn about and value others, which can help break down cultural misunderstandings. 

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