What Is Workforce Diversity – Types, Benefits & Challenges

workforce diversity

Are you a business looking to improve your corporate culture and enhance your productivity? If so, one area you need to focus on is diversity in the workplace. As the saying goes, ‘A chain is only as strong as its weakest link’, and employees are the backbone of your organization, so it is upto you to strengthen this chain. 

Workplaces that embrace diversity and inclusion make employees feel appreciated and valued, which boosts morale. A diverse and inclusive workplace can take advantage of employee’s unique skills, experiences, and viewpoints to spur innovation and enhance performance.

So, what is workforce diversity? And what are the benefits and challenges of embracing workforce diversity?

A robust diversity and inclusion strategy can help companies attract top talent and promote creative thinking. Visionary CEOs recognize the importance of diversity in the workplace along with its many benefits and know that it contributes to enhancing the employee experience. Below we cover the benefits and challenges of diversity and inclusion, along with some tips to help improve workforce diversity.

What is Workforce Diversity?

Diversity in the workplace includes employees from various racial, ethnic, gender, age, religious, and sexual orientation backgrounds. It also includes hiring employees with a range of abilities and disabilities.

As organizations have grown more global and inclusive, workforce diversity has evolved. We once limited diversity in the workforce to color and gender. Today, however, the term “workforce diversity” has been expanded to include various characteristics, including but not limited to gender, race, ethnicity, age, sexual orientation, religion, socioeconomic status, ability, and skills.

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

Types of Workforce Diversity

The types of diversity that can exist inside a social construct are potentially endless. It includes every characteristic and trait that exists in a group of people. However, there are six major types of diversity that we can typically observe in the workplace:

1. Race and ethnicity

When we talk about workplace diversity, race and ethnicity are the most important factors. Race is a person’s biological identity, which includes physical traits like skin color and hair type.  On the other hand, ethnicity is more concerned with a person’s cultural upbringing. It includes a variety of racial or ethnic identities. It is more about geography or cultural history than biology.

People from different cultural and racial backgrounds provide fresh perspectives to the workplace. According to a recent McKinsey study, companies with greater racial and ethnic diversity are 35% more likely to see higher financial returns.

2. Age group

People of all ages are present in every organization. Each age group has distinctive characteristics depending on when a person was born and the specific social, political, and economic changes that took place during their childhood.

Such differences can present challenges in the workforce and could result in ageism. Ageism in the workplace is the propensity to think negatively about someone else because of their age.

Different Age Group Employees

Stereotypes from several generations influence this bias. For instance, Baby Boomers are viewed as workaholics, Generation Xers are risk-takers, Millennials care about meaningful work, and Generation Zers ghost employers and desire job security.

Such misconceptions may cause colleagues and employers to feel that specific age groups may not excel at their organization due to life milestones like having children or retiring.


3. Gender Identity

Gender roles are social constructs that depend on biological sex and are diverse across cultures. They are assigned at birth. When a child is given a gender, they are divided into the male and female gender binaries.

In addition to these clear-cut binary options, a spectrum of gender identities may or may not match the sex assigned at birth. Non-binary, transgender, genderqueer, gender fluid and demi gender are a few examples of prevalent non-binary gender identities. 

However, there are other non-binary identities as well. Additionally, gender identities exist, such as agender, non-gendered, genderless, and gender-free. Remember that people may identify differently from how you perceive them, so asking about their preferred pronouns is polite.

4. Sexual Orientation

Sexual orientation differs from gender identity, gender expression, and biological sex. A person’s sexuality or sexual orientation depends on the people to whom they are attracted. Although it is a personal matter, employees must feel free to express their sexuality with their coworkers without fear of harassment or discrimination.

LGBTQ+ people come from various backgrounds and have a wide range of interests. Therefore, they encounter different issues in the workplace. People who are identified as sexual minorities must be kept safe, as workplace equality boosts job satisfaction and retention rates.

5. Physical Abilities and Disabilities

Employing people with various disabilities and experiences will help your team become more diverse and inclusive. The team will also bring fresh perspectives and ideas to help your business reach a broader demographic of customers and clients.

People often assume that a disability is related to physical mobility. However, employees may suffer from various disabilities that affect their vision, learning, mental functioning, and more.

If you want to foster diversity, you must provide accommodation for people with disabilities who can be just as productive as their colleagues.

6. Socioeconomic Status

A company’s employees come from various socioeconomic backgrounds and have different perspectives on various aspects of life, including money, social standing, education, etc. For instance, someone from a disadvantaged background may have a different viewpoint than a wealthy one.

It is important to pay attention to whether your company prioritizes employing individuals from all backgrounds. Additionally, it would help if you made sure no employee is discriminated against based on socioeconomic status.


5 Benefits of Diversity in The Workplace

Having a diverse workplace has several benefits. Since the world is becoming more interconnected and globalized, organizations should take advantage of the skills that people with varied backgrounds may provide. The top five benefits of workplace diversity are as follows:

1. Better Decision Making

Employee groups that are diverse draw from a greater variety of sources and experiences. According to one study, diverse teams perform better than non-diverse teams.

Better Decision Making

Diverse teams are more innovative, inventive, and socially conscious, showcasing just a few of the benefits your company will enjoy. Diverse teams consider the facts more thoroughly and develop more innovative and data-driven decisions as well. 

2. Increased Creativity & Productivity

As diverse teams have people from different cultures and backgrounds, there is an increased chance for creativity. This is because more people have various viewpoints and solutions to issues, boosting the chances that a problem at work will have a viable solution. Additionally, the chances for productivity also increase due to the wider variety of talents, experiences, and viewpoints that a diverse workforce brings.

3. Boost Brand Reputation

Diversity in the workplace is frequently seen as an indicator of good companies. Employers who accept and accommodate all backgrounds and treat their employees equally are more appealing to prospective employees. Since a varied workforce directly reflects the community in which it works and perhaps the community it serves, it helps boost your brand’s reputation.

4. Increase in Company Profit

One of the main benefits of workplace diversity is that it is excellent for your company’s bottom line. Ethnically and culturally diverse companies are 33% more likely to be more successful than their counterparts who are not. That statistic serves as the best possible example of the power of diversity. A diverse workforce will help you increase company profits. 

Implementing BYOD policies can also contribute to a more diverse workplace. Allowing employees to use their own devices can provide access to technology and tools they are comfortable with, regardless of their background. This can lead to increased productivity and job satisfaction.

5. Reduced Employee Turnover 

Employee satisfaction and comfort levels are frequently higher in inclusive workplaces. Additionally, they tend to be more committed and inclined to work for an organization longer when their unique contributions are recognized and acknowledged.

Workplace equality can boost self-esteem and motivate employees to achieve their full potential. Diverse teams frequently have higher morale and are more effective, innovative, and devoted to the company, thus reducing the employee turnover rates.


Top 5 Challenges of Diversity In The Workplace

There are several benefits to workplace diversity. Creativity and problem-solving can result from diverse viewpoints, beliefs, and ideas. By doing this, businesses can acquire a competitive edge, expand into new markets, and better serve their existing clientele. 

However, bringing a varied group of people together might also present some challenges. Below are the top 5 challenges of employing diversity in the workplace and how you can cope with them.

1. Language & Communication Barriers

Communication and language barriers are common in companies with a diverse workforce. Because it is common for US or UK companies to employ people whose first language is not English, other employees and supervisors may need help communicating effectively. This may result in poor communication and decreased productivity.

Communication Barrier

For non-native English speakers, language training can often stop this from happening. Additionally, hiring bilingual or multilingual employees can help in bridging the gap.

2. Discrimination Risks 

As your workforce becomes more diverse, you may experience more bias, discrimination, and harassment. 61% of employees have been victims of discrimination at work because of their age, color, gender, or LGBTQ+ status. This may restrict employees from bringing their true selves to the workplace, limiting collaboration, creativity, and innovation.

Diversity and inclusion (D&I) have to work together to prevent discrimination. Remind your team how important they are, and establish guidelines for behavior through a code of conduct.


3. Cultural Misunderstandings

When you blend people from various cultures, misunderstandings can also occur frequently. For instance, in some cultures, giving someone the thumbs up, using your left hand, or patting them on the back are seen as offensive.

By creating an inclusive workplace, the offended team member may better understand cultural differences and misunderstandings. Individuals are more likely to offer the benefit of the doubt to others when they have confidence that their coworkers respect their differences.

4. Potential for Conflict

Conflicts may occur when there is a lack of respect for the diverse cultures and beliefs employees hold. This conflict can occasionally escalate into hostility and even result in violent confrontations. 

Employees who respect one another’s diversity are more likely to exchange ideas and work together productively. Conflicts do not arise when there is acceptance among people. Employees that have undergone diversity training are more likely to respect, acknowledge, and comprehend one another’s differences.

5. Gender Equality

According to a McKinsey study on women in the workplace, Women are less likely than men to get employed in entry-level positions, even though they now acquire more bachelor’s degrees and have the same attrition rate. The difference widens as employees climb the corporate ladder. Only 86 women are promoted to manager level for every 100 men.

Gender Equality at workplace

However, there are positive changes. The Equal Pay Act has eliminated the disparity in pay between men and women that existed in the past. And there has been an increase in the number of women working recently. Employers must eliminate gender bias and uphold employment, compensation, opportunities, and promotions equity.


Implementing diversity in the workplace does have its challenges. However, you can overcome most of these challenges, which are less significant than the benefits of inclusion and diversity. So, ensure that your business actively promotes diversity and inclusion in the workplace from the beginning.

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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