Skip to main content
The People & Culture Platform | Culture Amp
Benefits of diversity in the workplace
Sophia Lee, author

Sophia Lee

Writer, Culture Amp

Workplace diversity is taking the HR world by storm. More than ever, employers are prioritizing diversity, equity, and inclusion (DEI) initiatives and investing resources into making sure their teams are set up for success. Focusing on DEI is not only the smart thing to do for your business but also the right thing to do as a human, for humanity.

In this post, we’ll review the tangible and intangible benefits of workplace diversity, the challenges that come with it, and what you can do to get started on related initiatives today.

6 actionable areas to improve DEI in your work place

Improve DEI in your workplace

Download the ebook

What do we mean by diversity in the workplace? 

Diversity in the workplace refers to an organization that intentionally employs a workforce comprised of individuals with a range of characteristics, such as gender, religion, race, age, ethnicity, sexual orientation, education, and other attributes. 

Diversity in the workplace leads to a plethora of benefits - both from an internal and external perspective. However, that doesn’t mean implementing diversity initiatives at work isn’t without its unique set of challenges. We’ll review both sides of the equation in the sections below. 

The benefits of diversity in the workplace

1. New perspectives

When you hire people from diverse backgrounds, nationalities, and cultures, you’re bringing a fresh array of perspectives to the table. This can lead to benefits like better problem solving and increased productivity. Think of it as a scavenger hunt: will you find more success by sending everyone on the team in the same direction? Or will you gather information more quickly by having a team that splits up strategically?

The idea of bringing new perspectives into the company can feel intimidating for some hiring managers. People may fear potential awkwardness or the introduction of unpopular opinions. But rest assured: research has shown that diverse teams see a 60% improvement in decision-making abilities. 

2. Wider talent pool

Employees are no longer simply seeking a 9-to-5 job that pays well. They’re looking for space where they can grow, feel accepted, and be challenged. That’s why a company that embraces diversity will attract a wider range of candidates who are looking for a progressive place to work. Moreover, the millennial and Gen Z generations are the most diverse in history - only 56% of the 87 million millennials in the country are white, as compared to 72% of the 76 million members of the baby boomer generation. Similarly, a 2020 Glassdoor study found that 76% of employees and job seekers report a diverse workforce is an important factor when evaluating companies and job offers. As a result, diverse companies are more likely to attract the best talent.

On the flip side, a company that also actively seeks diversity in candidates will have access to a wider talent pool. While you should always be selective about who you hire, being overly picky about traits that don’t matter will significantly decrease the number of people you can even consider. That’s why embracing diversity in background, thought, ethnicity, and other factors are key to finding good hires.

3. More innovation

Workplace diversity leads to innovation. If you think about it, the correlation makes sense. If you have a homogenous group of people, chances are that everything - from their thought patterns to life experiences to problem-solving skills - are likely to be similar as well. And sameness doesn’t lead to creative solutions. On the other hand, a heterogeneous group of employees will contribute unique perspectives that can lead to breakthroughs in thought.

It’s the same reason why companies go offsite for important strategy meetings, or why a change in pace can help you solve that problem you’ve been stuck on for days. New circumstances and environments are known to spark fresh ideas. A recent study also found that companies that score well on indicators of diversity tend to be demonstrably more innovative.

4. Better employee performance

Diversity and inclusion go hand-in-hand. When you create a work environment where employees see a representation of a variety of cultures, backgrounds, and ways of thinking, they’re more likely to feel comfortable being themselves. This, in turn, leads to happier, more productive employees. 

On the other hand, research has found that a strong, homogeneous culture can stifle natural cognitive diversity due to the pressure to conform. If employees don’t feel like they can be themselves at work, they’re more likely to fear rejection and not produce their best work. 

5. Increased profits

There are many studies that show diverse teams simply perform better and, as a result, bring in more profits. A 2015 McKinsey report on 366 public companies found that those in the top quartile for ethnic and racial diversity in management were 35% more likely to have financial returns above their industry mean. Additionally, those in the top quartile for gender diversity were 15% more likely to have returns above the industry mean. Another McKinsey study found that U.S. public companies with diverse executive boards have a 95% higher return on equity than those with homogeneous boards. Yet another study by the Boston Consulting Group found that increasing the diversity of leadership teams leads to improved financial performance. Clearly, diversity pays off.

The challenges of diversity in the workplace

1. Aligning diversity practices with unique organizational goals

Implementing diversity in the workplace is a huge commitment, and there’s no handbook you can just “borrow” from another organization. Every company has a unique set of goals, and your diversity practices must align with them to be successful. This means taking into account the specific culture you have in place and figuring out where you want to go.

Don’t feel pressured to just copy and paste the initiatives that organizations around you are pursuing. For instance, if you already have a racially diverse workforce, does it make sense to create an entire objective around improving those numbers, simply because that’s what other companies are focused on? Perhaps you should focus on intersectionality next so that your existing strengths can drive other aspects of diversity?

Solution: Consider conducting a diversity-focused survey to identify your organization’s specific gaps so you know where to focus your resources. Otherwise, you may make false assumptions and spend your time on initiatives that ultimately don’t have a significant impact.

2. Moving from design to implementation

You can design the most thoughtful and detail-oriented diversity program. But if there’s nobody to carry them out, then it serves no purpose. That’s why you need to make sure you have the team, support, and resources in place to move your diversity initiatives from design to implementation. Secure leadership buy-in so you have support moving forward, and make sure your team is on board and ready to take action.

Solution: Having a dedicated resource, like a Head of Diversity and Inclusion, is a solid way to hold the business accountable for results. The latest statistics from Indeed show that diversity and inclusion jobs are up 35% over the past two years. You can also consider a creative solution, like a rotation program if that fits with the structure of your organization.

3. Training management

Diversity doesn’t happen in silos - it requires the cooperation of everyone at the organization in order to be successful. In particular, managers are hugely influential in how these initiatives are carried out. That’s why it’s important to invest in management training to help them understand what the company’s diversity goals are, why they’re important, and what’s expected of them when they interact with employees. It only takes one person to commit microaggressions or display insensitive or non-inclusive behavior to taint the company’s culture and an employee’s experience.

Solution: There are many companies out there that can help you navigate diversity training. For instance, Forshay uses a combination of data, relationship building, and a network of diversity and inclusion experts to design custom solutions for your organization. This can be a great resource if you feel like you need more support!

4. Overcoming bias

Humans are biased. The research of psychologist Daniel Kahneman has shown that the vast majority of human decisions are based on biases, beliefs, and intuition - not facts or logic.

That’s why, even with the best intentions, people have the tendency to bring bias into their everyday interactions, including in the workplace. 

Solution: Organizations need to invest in additional training dedicated specifically to overcoming bias. While it’s inevitable that some bias will creep into the workplace, it makes a huge difference to at least be aware of common biases and have a foundational understanding of how to avoid or address them. 

5. Internal resistance 

Unfortunately, not everyone is on board with the idea of diversity in the workplace. Some people are just uncomfortable with the unfamiliar and will eventually adjust. But others may be actively opposed to the idea of intentionally building diversity in the workplace. No matter the reason for the internal resistance, it’s important that you - as a leader at your organization - make an effort to constantly educate your employees about the why behind your diversity efforts.

Solution: While there’s no tried-and-true solution to internal resistance, it’s important to remind yourself that effective D&I is about moving people towards understanding. This means focusing on people who don’t understand why it's important - not only those who do. If you make it clear what your culture stands for, some employees may eventually realize that it’s not the right place for them and choose to leave. This isn't meant in the sense that they’re excluded, but rather that people recognize when they don’t share the same beliefs as the rest of the organization. 

How to get started with workplace diversity

Now that you understand the benefits and challenges that come with diversity in the workplace, how do you get started? Thankfully, there’s a growing number of resources out there to help you get started on the right path. We’ve developed a few of our own at Culture Amp that can serve as a helpful starting point. Check out some of our diversity-focused content below:

If you want to learn how other companies approach diversity:

If you want to learn how to measure diversity:

If you want to learn from diversity experts:

If you want to learn how to meaningfully support employees from historically marginalized communities:

What’s next

View all articles
Performance management in a hybrid workplace


Redesigning performance management for a hybrid workplace

Read article
How to foster emotional intelligence in the workplace


How to foster emotional intelligence in the workplace

Read article
Disability in the workplace: Barriers to employment & retention


Disability in the workplace: Barriers to employment & retention

Read article

Build a world-class employee experience today

Your browser is out of date. Our website is built to provide a faster, more engaging experience. Your browser may not support all of our features. Please update to the latest version of Microsoft Edge or contact your network administrator.

Close browser update banner