Across the world, studies and surveys are shining a light on the importance of diversity hiring by corporations. Besides improving the brand image and employer branding of companies, a diverse workforce makes talent pools multi-dimensional, enabling teams to approach problems from different perspectives and aiding the creation of better strategies.
McKinsey’s 2018 report Delivering through Diversity lays out the linkages between diversity and profitability, demonstrating that companies which favour gender and ethnic diversity are 21% and 33% more likely respectively to experience above-average profits. It adds:
Companies report that materially improving the representation of diverse talent within their ranks, as well as effectively utilising inclusion and diversity as an enabler of business impact, are particularly challenging goals. Despite this, multiple companies worldwide have succeeded in making sizable improvements to inclusion and diversity across their organisations, and they have been reaping tangible benefits for their efforts.
So, how does diversity help a company make better strategic decisions, drive employee engagement and improve productivity—with a tangible impact on the balance sheet? Read on to know.
1. Variety of Perspectives
Employees from different backgrounds bring different skillsets, life experiences, and abilities to the table when they are hired by the company. This offers companies access to a heterogenous talent pool which can approach problems from different perspectives and deliver well-rounded solutions. These aspects make teams more flexible and dynamic. Take the example of a product launch. A footwear company foraying into the women’s footwear segment for the first time will likely have a higher chance of success if it has female employees on its team to provide inputs in addition to their male counterparts.
2. Better Creativity, Productivity and Problem Solving
The greater the diversity, the higher the creative quotient. When people from similar backgrounds work together, the results tend to be humdrum. A diverse workforce, on the other hand, offers much more verve and energy while tackling a problem. Take the example of an advertising agency designing a new brand logo for a client relevant to a specific geographic region or demography. A diverse team can offer superior creative inputs than one which is culturally homogenous by virtue of it being a repository of assorted life experiences.
Not only creativity, diversity also creates inclusion, engagement and—therefore—higher employee productivity. A diverse workforce that is made to feel welcome is likely to display enhanced engagement while bringing its attendant advantages of creativity and multiple perspectives. Quicker problem solving and decision-making through assorted perspectives and filtration of ideas is a key advantage of having a diverse and inclusionary workforce.
3. Better Brand Image and Employer Branding
Needless to say, when you have people of different skin colour, race, religions and cultural backgrounds, you come to be seen as a more inclusive, open, and accommodating business by your customers. This is a significant advantage in this era of wokeness and sharper cultural identities. You portray an image of being a conscientious business guided by more than just profit. A good brand image also means a better chance at getting associated with prestigious events as sponsor, translating into better publicity.
4. Better Understanding of Customer Mindset
A diverse workforce allows you to understand local tastes and choices, to strategically market your product. A diverse workforce will bring better understanding of the finer nuances of consumer taste and help the business strategically position and market different products.
5. Salary Costs
To top it all, a diverse workforce also helps businesses save on salaries. Not every skilled employee from every country costs the same. Sometimes, it makes sense for businesses to hire local talent in its area of operation or to seek out expats from countries with cheap labour to keep their salary costs low. This is one factor that will directly impact your balance sheet by bringing immediate returns.
Make Diversity a Key Part of Your HR Strategy
The UAE boasts a significant proportion of immigrant workforce, with only 10 per cent being native Emiratis. The Workplace Survey Report 2018 revealed that a large proportion of the UAE workforce considered diversity as a benign factor with chiefly positive outcomes. As many as 74% women in the UAE aspired to leadership roles compared to 66% men, while 57% of the respondents saw diversity as a priority for their employers. With the benefits of employee diversity clearly etched out, it is time to make it a key plank of your HR strategy.
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