How Workplace Diversity Increases Productivity

diversity increases productivity

In the 21st-century business environment, workforce diversity has become an essential part of corporate lingo. However, some wonder if it can provide actual, tangible benefits to their companies.

As a company,

  • Do you want to increase your productivity and profitability? 
  • Do you want to attract and keep great talent? 
  • Or do you want to boost innovation within your organization?

For answers to all these questions, you might have to consider the one approach that can have a revolutionary impact. It is about making more voices heard and incorporating diverse employee experiences, perspectives, and ideas into your procedures.

If you have not already guessed, it is diversity and inclusion. And substantial research suggests that it is more than just a nice-to-have.

Diversity in the workforce can make teams more creative, innovative, efficient, and flexible. Diversified companies provide greater job satisfaction and financial performance. However, improper diversity initiatives can also present challenges that may jeopardize performance of the whole organization. As a result, the corporate heads must understand and be careful to effectively incorporate diversity into their companies.


Does Diversity Increases Productivity?

Often assumed to be on the “softer” side of the business, diversity and inclusion are now measurable and tangible. Given the advancement of comprehensive data analytics, the effects of diversity and inclusion on the bottom line are quite visible.

Research studies have proven that organizations perform better when they have diversity at the board level. This is due in part to the fact that diversity is required for increased creativity – diverse perspectives and ways of thinking promote fresh ideas and can expose blind spots.

“When we listen and celebrate what is both common and different, we become wiser, more inclusive, and better as an organization.”

Pat Wadors, Chief People Officer UKG

How does Diversity Increase Productivity?

Increasing workforce diversity requires an innovative approach to hiring. Employees need to have intangible assets like personality, drive, and enthusiasm in addition to what’s mentioned in the resume. Companies need to consider applicants with diverse backgrounds who may not have industry experience but can help enhance the company’s creativity.

Here are some of the ways that diversity increases overall productivity.

1. Driving Innovation

Diversity is a critical catalyst for business innovation and creativity. Diverse teams boost creativity and innovations by bringing a more comprehensive range of perspectives, distinct insights, and new ideas to decision-making and problem-solving. This added value and expanded knowledge may fuel corporate growth by identifying previously unseen possibilities and markets. This makes the importance of diversity and inclusion in the workplace quite evident.

importance of diversity and inclusion

According to the World Economic Forum’s Diversity, Equity, and Inclusion 4.0 report, organizations with diverse workforces enjoy “up to 20% higher rate of creativity and 19% higher revenue from innovation.”

2. Increasing Productivity

Diverse workplaces provide a more productive environment by increasing employee motivation, engagement, and job satisfaction. A diverse and inclusive workplace promotes the open exchange of ideas. It also allows people from various backgrounds to learn from one another, making teams more innovative and productive. Diverse perspectives on ongoing challenges also provide innovative solutions to industry-wide issues.


The below course on Workforce Diversity from Udemy is suited for both complete beginners as well as more advanced students who want to learn to develop their company’s global Diversity, Equity, and Inclusion function.

Workforce Diversity_Udemy Course

3. Reducing Absenteeism and Attrition

There is a clear link between diversity & inclusion and employee engagement. According to several studies, companies with a diverse workforce have higher engagement levels.

This, in turn, reduces absenteeism and keeps employees on the job for longer. In other words, those who feel included at work are likelier to show up and give it their all. People who are not engaged, do not feel involved, and do not believe their opinions are heard will perform the bare minimum and will not feel guilty about taking days off.

4. Improving Talent Acquisition and Retention

There is a common misperception that disengaged individuals do not feel included because they do not care. This is far from the case.

When people become disenfranchised and disengaged, they have little choice but to not care. This is their final recourse – the last straw. It is what they do when they do not know what else to do. Companies can attract and retain top talent with a diverse workforce and hiring process. 

5. Boosting Profitability

As previously stated, embracing diversity in the workplace leads to increased creativity and innovation. That creativity and innovation eventually translate into a competitive advantage for companies through increased revenues.

According to a McKinsey study, “the most diverse companies are now more likely than ever to outperform non-diverse companies on profitability.” According to the 2019 study, organizations in the top quartile of ethnic and cultural diversity outscored those in the lowest quartile in terms of profitability by 36%.


What to do if your Organization is not Diverse?

The longer you wait to create a diverse workforce and inclusive culture, the more difficult it will be in the future. There are several methods to increase diversity and inclusion in the workplace, and here are the top five:

1. Conduct Diversity Training

For starters, develop and implement a diversity training program for your employees, especially those in leadership positions. This training program may help eliminate workplace discrimination and prejudice, resulting in greater employee morale and job satisfaction.

Conduct Diversity Training

Diversity training does not have to be costly or time-consuming. Request that your HR manager or other executives create a course outlining the company’s diversity goals, efforts, and best practices.

If you have the means, you may hire a third-party training provider to come in and organize a diversity training session for all of your employees to ensure everyone is on the same page.

2. Create More Inclusive Workplace Policies

According to the Center for Workforce Inclusion, a flexible workplace is more likely to favor women and other underrepresented groups. For example, female employees with families and children may find it simpler to work remotely rather than attend to the office regularly, which means you will need to figure out how to manage your virtual teams that are spread across different places.

Remember that diversity and inclusion go in tandem. These values have the potential to inspire corporate culture change and demonstrate that you are making an effort to accommodate people from diverse backgrounds and circumstances.


3. Acknowledge Cultural Differences

Another way to promote workforce diversity is to recognize and celebrate cultural differences. During team outings or workplace activities, encourage employees to discuss their traditions, holidays, and customs. Consider making a calendar or a shared sheet where your team members may identify culturally relevant holidays.

You could also plan culturally diverse events, such as day visits to ethnic festivals. These small gestures will make your employees feel valued, resulting in higher engagement and retention rates. Plus, with so many events to attend throughout the year, you will also appeal to future candidates.

4. Commit to Skills-Based Hiring

According to Harvard Business Review, many businesses implement the skills-based recruiting process. Some employers even went so far as to remove college degree requirements from job postings. This approach gives them access to a larger pool of applicants with specific skills and competencies.

Skills-Based Hiring

To avoid prejudices in the hiring process, hire based on talent. For instance, you may use Gender Decoder and other technologies to locate potential hires on social media or job boards without seeing their names or faces.

5. Team up with Multi-cultural Professional Organizations

To discover top talent, take a proactive approach to diversity hiring and partner with minority professional groups. Find local or national organizations that assist women and minorities and inform them about your efforts to create a more diverse workplace. They can connect you with eligible applicants from a variety of backgrounds.



When it comes to improving diversity practices in your organization, ensure you are doing it in a way that demonstrates a genuine commitment to workplace diversity rather than simply performing actions. Invest in cross-training programs, modify your hiring practices, remove unconscious bias, and ensure your employees get the message.

Above all, recognize that everyone has equal rights, regardless of gender, race, age, or other factors.

Merin is an HR professional with an MBA in Human Resource. She likes doing a lot of research and study in the field of Human Resource and can't help but share her knowledge on the same in this platform. She is also a great cook and during her free times she keeps experimenting with new dishes. Know more about Merin by clicking here.
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