Gemma Dodd
September 11, 2023
min read
People & Culture

Workplace Diversity: Solving The Deficit Is A Matter Of Company Culture

Cultural diversity within a company's people has been proven to be a huge asset to increasing performance, profit, and growth. Yet the majority of countries have been slow to resolve their lack of representation, especially in leadership roles.

As the Covid-19 pandemic has now threatened women's economic progress in the workplace, businesses are facing an additional blow to equal representation.

In the post-Covid economy, having a diverse workforce could be even more important to successful recovery.

So how do leaders solve their race, gender, and age diversity deficits to create an inclusive workplace?

Representation Deficit vs Financial Performance

In 2015, the McKinsey Diversity Matters report examined company data from the United States, Canada, Latin America, and the United Kingdom, comparing the composition of top-level management against financial results.

The findings were that companies measured in the top quarter of ethnic and racial diversity are 35% more likely to achieve financial returns above the national average. The top quarter for gender diversity is 15% more likely to do so.

However, the findings also report that the vast majority of companies do not reflect the cultural difference and diversity of the country's labor force within their leadership teams.

The proportion of companies that have representation issues in their workforce according to this report?

* 97% of companies in the United States,

* 91% of companies in Brazil, and

* 78% of companies in the United Kingdom.

In the US, despite black people making up 12% of the country's workforce, the US Bureau Of Labor Statistics measured that only 8% of managers and 3.8% of CEOs are black.

In 2019, white men accounted for 85% of senior executives and board members within Fortune 500 companies.

The Mckinsey report also states that minority women in the US report the most negative perceptions of workplace fairness, treatment, and the lowest levels of job satisfaction.

In the UK, 33% of ethnic and minority workers surveyed felt that their job applications had been unfairly turned down, 28% reported feeling overlooked for pay raises, and 29% for promotions.

In short, a large proportion of employees with a different cultural background felt there were not given equal opportunity.

Workplace Diversity Is Crucial For Innovation

In industries where innovation is vital for growth and market competitiveness, having a diverse workplace is especially important.

Yet, the tech industry, a sector that is reliant on innovation for market competitiveness, is renowned for its lack of gender and racial representation.

Diverse employees provide a variety of experiences and perspectives, which is an asset when it comes to creativity and innovation within a team.

For example, having different cultures and diverse backgrounds in a product development team ensures that solutions and product offerings are optimized as it expands the potential customer demographics considered in terms of market requirements.

A diverse team creates a working environment where a large selection of ideas and suggestions is expected and appreciated.

This leads to higher employee engagement because everyone feels they have the freedom to express and create.

Instead of a narrower channel of thinking generated by the herd mentality present in a smaller demographic group, a diverse workforce is highly engaged and creative.

Workplace Diversity is Crucial for Employee Engagement

Companies without a diverse workforce also tend to experience a far higher employee turnover, impacting profit and productivity.

When minorities within an organization sense prejudice or bias towards the group with the highest representation, they are three times more likely to be disengaged from their work.

A 2017 survey of 2,000 American professionals conducted by The Kapor Center and Harris Poll found that 40% had left their role due to unfairness or mistreatment. 30% of women of color had left due to being passed over for promotion.

Unsurprisingly, two-thirds of these tech role leavers would have stayed had the employer fixed the work culture issues.

On the other hand, those working for companies with an inclusion and diversity strategy, reported significantly lower incidents of sexual harassment, bullying, ethnic stereotyping, and employee retention issues.

An example of how a diversity deficit is impacting growth is currently happening in the UK. The Brexit vote caused a mass exodus of foreign talent in tech, science, healthcare, and finance. The end of free EU movement and complex visa rules have made it challenging to attract and recruit skilled professionals from abroad, a tactic the UK has relied upon to stay competitive in innovation. The Home Office has been forced to respond to complaints from industry leaders with specialized talent visas for these sectors to preserve growth.

How to Shape An Inclusive Culture and Promote Diversity Initiatives

There are many barriers to balancing age, gender, race, and sexual orientation divides within business sectors, the entrenched biases that influenced a political event like Brexit being one of them.

Reform takes time, but promoting diversity at work as a symbolic gesture or 'tokenism' to meet demands for inclusivity is not enough.

True reform begins with company culture. Creating an inclusive environment that attracts a wide range of diverse talent is the foundation that dynamic innovation is built upon.

The following practices help every employee within an organization thrive, regardless of age, race, gender, or sexual orientation.

  • Start at the top. When company leaders prioritize inclusive culture, it sends a message to the entire organization. Acknowledging that there may be unconscious bias and taking part in diversity training can be a good place to start.
  • Company values and identity. Integrating a diversity goal and commitment to inclusivity into the core company values will promote a positive environment and attract job seekers with more diverse backgrounds.
  • Ensure correct language. Embracing inclusive language into all internal and customer-facing communications signals an inclusive attitude.
  • Prioritize wellbeing. Regular check-ins and one-on-one meetings for all employees help to build trust and allows for open dialogue where any issues can be highlighted and resolved.
  • Provide safe spaces. Creating physical safe spaces such as gender-neutral bathrooms, private environments for breast pumping, accessibility for disabilities, quiet places for religious practice, and calm spaces for neurodiverse employees encourages a culture of support.
  • Appoint a task force. Create new responsibilities within the company for ensuring that inclusivity standards are met and education is available. Allow those who are passionate about this vision to lead others.
  • Expand the holiday calendar. Open up available employee leave dates to include important dates for every religion and celebrate important events such as Pride Week, International Women's Day, and Autism Awareness Week.
  • Reward and recognition. Building a culture that actively celebrates employee achievements signals positive core values.
  • Education and training. Education is key to promote change, but this training should be provided by relevant experts. Inviting guest speakers with a different perspective to provide seminars and workshops is a refreshing experience that communicates a commitment to improvement.
  • Opportunities for conversation. Informal social events provide an opportunity for employees to mix and get to know one another outside of the formal work environment. This aids friendship and understanding and removes awkwardness from potentially difficult conversations.

Dismantling Barriers And Utilising Opportunity

The working landscape is currently facing one of the most impactful changes in decades due to the pandemic. An opportunity has arisen as many companies have adopted flexible, work-from-home models due to the Covid-19 lockdowns.

Recruitment is no longer limited to location.

These new structures and technologies open up the playing field to a diverse group of skilled individuals with different backgrounds. There is a global talent pool available, and this new form of skill export could be key to balancing race and gender divides in favor of a diversified workforce.

Remote working roles with flexible structures can often provide an opportunity to promote inclusivity in general.

For the first time, people with disabilities can contribute their skills without the challenges of adapting to environments not modified to enhance their success. Working mothers are less inhibited by working hours that do not support the work-life balance. Neuro-diverse people have more control over their working environments.

Enhancing diversity is an ongoing strategy supported by openness, transparency, and a commitment to education.

These values are a recipe for reform, and a necessity for surviving the economic downturn many industries must navigate as the world recovers from Covid-19.

Revolutionize your way of working now!