Why Companies Must Encourage Diversity?

Diversity is the key to competitiveness. It has a high impact on both the capacity for innovation and adaptation of any company.

Why companies must encourage diversity?

 

1. It fosters better decision-making.

Great companies and leaders have learned to value diversity, even though reaching a consensus, at first, may become more difficult, and requires more effort. Because it implies that the company has some analysis and thought around its decision-making and execution. With so many distinctive and diverse minds coming together, many more solutions will arise as every individual brings in their way of thinking, operating, solving problems, and taking decisions. Workers from various cultural and social backgrounds allow for multiple perspectives on internal and external issues. This helps the company to consider different, more creative, and efficient options before making decisions.

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2. It builds a better talent pool and engages employees

There is a better chance of finding top-quality employees when it recruits from a more diverse set of candidates. According to Adecco UK Higher-educated candidates who experienced diversity while at university may feel that a diverse company is more progressive and therefore will want to work there while candidates from all walks of life, and especially minority groups, will be far more likely to apply for positions at a diverse company. Feeling included and appreciated increases loyalty and a feeling of belonging, this tends to be reflected in a strong commitment to their employers, potentially reducing training costs (due to higher turnover rates), eliminating recruitment costs for replacements, and leading to increased productivity. The reason why companies that hire and promote individuals from a range of backgrounds gain a reputation for being good employers.

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3. It enhances creativity and productivity

According to the psychologist, and professor of Columbia Business School, Katherine W. Phillips, diverse groups tends to devise better solutions, even when individuals believe they do not work well together. She suggests that a degree of discomfort can improve results compared to ideas devised by a more familiar, comfortable, and homogeneous group. Moreover, a study by the University of Florida, reveals that simply respecting individual differences within the company can increase productivity. In the US, various studies have proven that the mere fact of having employees who grew up in different states may increase a group's output and raise the competitive bar. Publisher Malcolm Forbes once said that "diversity is the art of thinking independently together."

4. It allows companies to attract and satisfy a wide range of customers

An organization with a diverse range of employees is well-placed to understand the needs of a wide range of customers and can interact with a broad client base. Diversity allows companies to operate with different cultures and communicate effectively with clients. It also allows the organization to develop new products and services that add value to its target market. Likewise, the image of the company improves, as clients are more likely to feel identified with the company given that they can find out employees with similar backgrounds to theirs.

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5. It reduces lawsuit

Companies that are truly committed to diversity at every level of the organization are less likely to have claims for discrimination. That an employee pursuing legal action against a company can only claim discrimination if s/he has been terminated or victimized for a difference s/he possesses from her/his co-workers.

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