Is a diverse workplace the key to business success?

By Sameer Kassam | Partner Most global leaders understand the need for diversity and the benefits that come from having multiple perspectives at the table. Innovative businesses are those that foster an environment where teams are confident and curious enough to collaborate with those unlike themselves. The proven advantages range from higher revenue and employee retention, right through to increased innovation and productivity. Additionally, a diverse and inclusive workplace means varying voices and opinions, leading to new ideas and out-of-the-box thinking.

Diversification can improve business revenue

Diversity is fast gaining momentum across major corporations around the globe. And, those willing to embrace this style of working have the potential to improve their bottom line. A recent study by the BCG Henderson Institute found that workplaces classified as ‘diverse’, particularly in leadership positions, increased their innovation and revenue by 19 per cent. This also extends to the overall financial performance of a business, with EBIT margins being nine per cent higher than that of companies with below average diversity in their leadership teams. For start-ups, innovative thinking is imperative for growth. According to Dr Anna Powers of Forbes magazine, “it shows that diversity is not just a metric to be strived for, it is actually an integral part of a successful revenue generating business.” Additionally, research from McKinsey & Company found that the most diverse companies were 35 per cent more likely to have above-average earnings in their industries.

Employees prefer a diverse workplace

Culturally, diversity is fast becoming the norm in the workplace. For many employees, particularly millennials and Gen-Z, diversity is expected. In many cases, it’s something that many prospective employees consider before taking a job offer or staying with a company. Research from Deloitte found that 72 per cent of employees would leave their company for a more diverse organisation, with 53 per cent of millennials already having done that.

Increase innovation and industry thought

Successful businesses are productive, innovative and creative – something that consistently needs fostering in the workplace. A study completed by the Victorian Equal Opportunity and Human Rights Commission, in partnership with Deloitte, found that employee innovation levels increased by 83 per cent when employees felt included in the workplace. This study supports a range of international studies that suggest diverse teams are better able to solve complex problems and exhibit a higher level of creativity and a broader thought process. At CharterNet, we’re relationship and advisory-focused rather than transactional or compliance-driven. Ideally, we want to attract clients seeking this model. Our services are embedded with the idea of providing our clients with an individualised and holistic offering. However, in our experience, this is only possible with a diverse team – it’s through diversity that we can bring a range of skill sets to the table and look at situations from varying perspectives. This, in turn, leads to healthy debate and positive conflict, keeping the minds of our team members open.

Diversity succeeds, but only when there’s inclusivity

Leaders may face challenges when it comes to building a culture of diversity and inclusion. According to the Harvard Business Review, most global leaders understand the need for diversity and the benefits that come with it. However, where some fall short is the ‘inclusion’ part. It’s all well and good hiring a team from diverse backgrounds, but it would be naive to assume that everyone will get along, feel happier, and naturally spark constructive debate. It’s critical that leaders create an environment that goes beyond acknowledging cultural differences. This environment needs to be comfortable enough where people can voice their perspectives. A study conducted by BCG Henderson looked at the presence of factors that allow diversity and inclusion to flourish. From this study, these factors included:
  • Fair employment practices, such as equal pay;
  • Participative leadership, with different views being heard and valued;
  • A strategic emphasis on diversity led by the CEO;
  • Frequent and open communication; and
  • An open culture where new ideas are encouraged.
However, most of the companies that were included in the study missed the mark, with fewer than 40% of respondents using any of these characteristics to describe their workplace. Therefore, leadership should be approaching diversity and inclusion like any other business agenda and visibly lead it. For it to be successful, it requires accurately assessing a company’s starting point, establishing diversity-specific goals, and creating a roadmap with milestones and clear accountability. At CharterNet diversity is intrinsic to our company – a core value of the company is Strength Through Diversity. We know that we can solve problems more effectively when we have people with different life experiences working together. Across our cohort, we speak 14 languages and stem from a range of cultural, religious and tertiary backgrounds. Diversity exists within our clients as well. Over the course of being in operation, we’ve worked with clients across 17 industries nationally and internationally. However, even if a diverse team is in place, leaders can’t afford to be passive. Companies that take the initiative have the potential to perform better. It’s imperative that management builds the right foundation in order for diversity to flourish in the workplace.