The five business benefits of a diverse teamWednesday 03 July 2019
Any organisation aiming to be truly diverse needs to go way beyond targets and laws relating to equality. Smart businesses know they need diversity of backgrounds, life experiences and viewpoints at every level of their organisation so that they can attract, retain and make the most of people’s abilities. For example, full representation of BAME individuals across the labour market would be worth £24bn a year to the UK economy, according to CMI’s Delivering Diversity research.
But to do that, you need diversity champions throughout an organisation. They can articulate and promote the many business benefits of managing a team of individuals with differing characteristics, backgrounds and perspectives. Here are five for starters:
#1: Increased Creativity and Innovation
Bringing in people who have different views on the same issue means you are more likely to get a melting pot of fresh ideas, thus improving the creativity of your team and boosting its capacity for innovation. A study last year by Boston Consulting Group, which looked at 1,700 companies across eight countries, found that organisations with more diverse management teams have 19% higher revenues due to innovation.
#2: Better Problem-solving and Decision Making
Team members with diverse backgrounds will bring diverse solutions to the table, which leads to a more informed decision-making process and improved results. Harvard Business Review found that diverse teams are able to solve problems faster than teams of cognitively similar people. A white paper from online decision-making platform Cloverpop found that when diverse teams made a business decision, they outperformed individual decision-makers up to 87% of the time.
#3: Increased Profits
Teams that are better at solving problems and making decisions generate a competitive advantage — and make more money for their organisation. A 2018 study of 1,000 companies across 12 countries by McKinsey & Co found that companies in the top quartile for gender diversity were 21% more likely to experience above-average profitability. Meanwhile, ethnic and cultural diversity resulted in a 33% increase in performance.
#4: Higher Employee Engagement
When employees in your team feel included, they are likely to be more engaged. Research from Deloitte Australia found that teams that are focused on diversity and inclusion tend to deliver the highest levels of engagement.
When employees feel accepted, valued and empowered, they are also happier, more motivated, more productive and easier to retain. As a result, companies with greater diversity tend to have lower turnover rates – meaning reduced recruitment and training costs.
#5: Better Reputation
Diversity within your team will boost its reputation and help you attract better talent. Businesses that are seen to build and promote diversity in the workplace are viewed as more ethical and socially responsible, making it easier for many people to relate to them; opening doors to new markets, customers and business partners.
Workplace diversity is an especially beneficial asset for attracting top talent from diverse talent pools. In another survey, by PwC, more than 80% of participants said an employer’s policy on diversity, equality and inclusion is an important factor when deciding whether or not to work for them.
Workplace diversity is not just a politically correct fad – it’s a serious competitive advantage. By becoming more diverse and inclusive, your team can achieve greater engagement, creativity and success. For more on how to do this, read CMI’s Managing for Diversity checklist.
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