Five Reasons that Increasing Diversity in the Workplace Improves the Bottom Line and the Customer Experience

A recent study found that a team with a member who shares a client’s ethnicity is 152% more likely to understand that client than another team. Having a diverse company matters to your clients and ultimately impacts your bottom line. Here are five reasons to work to increase the diversity throughout your workplace.

Reason #1: According to Harvard Business Review, “employees of firms with 2-D diversity are 45% likelier to report a growth in market share over the previous year and 70% likelier to report that the firm captured a new market.” Diversity sparks innovation and helps legitimize the voice of others in the room. Implicit bias is dangerous to innovation and creative thought. Implicit bias can lead to a detrimental impact on performance, mental and physical health, and overall organizational behavior. When organizations embrace diversity and inclusion, it transforms the culture of the organization. Diversity and inclusion encourage unique perspectives and divergent thinking that can drive productivity.

Reason #2: The Journal of Economic Geography reports, companies with diverse management are more likely to introduce new product innovations than those with homogeneous “top teams.” Again, having a team that can see beyond the status quo or one mindset is key to innovation. There is an old saying that necessity is the mother of invention. Unless different or diverse needs are identified there is no necessity to drive invention.

Reason #3: “People want to see themselves represented at companies they buy from, and a diverse sales force can more directly relate to the needs and wants of the people they are selling to,” says Stan Kimer, President of Total Engagement Consulting. To be successful in business, companies not only need to provide quality service to their customer base but ultimately they need to connect with their customers. When companies hire a diverse workforce, it builds trusts with the community but it also gives the community a voice within the organization. Not only do the clients see themselves represented, but the company now can see the needs of the client from a more meaningful vantage point.

Reason #4: Negative EEO HR claims are costly. Mistakes are made when there is no diversity in the workplace. When workers feel excluded or discriminated against, companies open themselves up to costly litigation. According to Bashan Corporation, “more than 50 percent of the largest companies estimate that the average cost to arbitrate a single plaintiff case to conclusion is just under $100,000. One in five of the largest companies place the average cost at about $500,000. These figures exclude settlement monies paid to the plaintiffs.” Ongoing training can be far less expensive than one lawsuit.

Reason #5: Gender and age diversity are still challenging for many companies. Companies that can reach women and Generation Z have the potential to gain market share over their competitors. Adding women and younger people to your teams help to diversify thought and will shift cultural norms, which often sparks innovation. In the sales environment, tactics that appeal to 50-year-old men might come across as overly brash or insensitive to other demographics. If your sales team has not ever had to *code-shift in their personal interactions it may be challenging for them to shift tactics when meeting with new clients. Without diversity, breaking into new markets may be difficult if not impossible.

At the end of the day, you want to acquire and retain clients with less stress and at the lowest cost possible. Bad decisions, poor customer engagement, and damage control waste time and energy. Investing in cultural competency/awareness training just make good sense, especially if your team is less diverse.

Ask yourself, “What are the gaps in your processes or sales strategy that can be improved by hiring a good diversity and inclusion trainer?” Contact Glen to see how you can get actionable results.

Glen is a qualified administrator (QA) of the Intercultural Development Inventory® (IDI®). The Intercultural Development Inventory® (IDI®) is the premier cross-cultural assessment of intercultural competence that is used by thousands of individuals and organizations to build intercultural competence to achieve international and domestic diversity and inclusion goals and outcomes. IDI research in organizations and educational institutions confirms two central findings when using the IDI:

• Interculturally competent behavior occurs at a level supported by the individual’s or group’s underlying orientation as assessed by the IDI.
• Training and leadership development efforts at building intercultural competence are more successful when they are based on the individual’s or group’s underlying developmental orientation as assessed by the IDI.

* Cross-cultural code-switching is the act of purposefully modifying one’s behavior in an interaction in a foreign setting in order to accommodate different cultural norms for appropriate behavior.