What do we mean by diversity in the workplace? And does it matter? If we have a diverse recruitment policy can we relax, safe in the knowledge that we have that box ticked? We can define diversity in the workplace as enabling people to fulfil their potential, no matter what their ethnicity, gender, disability, age, sexual orientation, religion or education.

Companies that intentionally foster a culture of inclusion allow for a rich diversity of ideas that wouldn’t be possible in a homogeneous environment (Hera McLeod)

And diversity does matter. Numerous studies show that organizations that embrace diversity in their workplace are likely to do better than their competitors who don’t.

Diversity in the Workplace Drives Performance

A McKinsey report found that: “companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians. Companies in the bottom quartile in these dimensions are statistically less likely to achieve above-average returns.”

McKinsey found some differences between the US and the UK. In the US, companies with a varied racial mix at senior levels were seen to perform better than the rest. In the UK the difference was most marked by companies with a wider gender mix at the top. One reason put forward for this was that US companies have made more progress in gender diversity than those in the UK.

Studies in the UK show similar results. The Department of Business, Innovation and Skills produced “The Business Case for Equality and Diversity”. While somewhat dated, the report is still a valuable guide to the importance of diversity and contains solid tips on how to make the most of your workforce.

The report found that the impact of diversity in the workplace is more nuanced than simple buzz phrases might suggest. An organisation’s business sector, strategy, labor market and culture all impact on what aspects they should concentrate on most. Details count. There is no simple “one size fits all” for a diversity in the workplace policy.

Companies that intentionally foster a culture of inclusion allow for a rich diversity of ideas that wouldn’t be possible in a homogeneous environment

And diversity is not just a nice-to-have quick fix for promoting your brand. As the UK Chartered Institute of Personnel and Development (CIPD) says: “Everyone stands to benefit when we embrace and value the diversity of thoughts, ideas and ways of working that people from different backgrounds, experiences and identities bring to an organisation.”

There’s a moral case too. Businesses should reflect both the society where they operate and that of their market.

One example of where this can backfire is the criticism experienced by Unilever’s “Dove” skincare brand, when they produced an advertisement with a black woman turning into a white one. The ad wasn’t intended to be racist, but many of their target audience interpreted it as such.

The diverse company

So how do we make sure we are recruiting the widest range of people and then making the most of their abilities and potential?

Firstly, do you know where you are today? Do you have good information on your recruitment – and equally important, on your retention – of a diverse employee base? Do you have any systematic pay differences between male and female staff?

Are your existing policies doing any good?

Creating a diverse environment is much more than writing a policy – it’s about everyone confronting their own attitudes and unconscious biases. It can mean overcoming deeply ingrained, preconceived ideas relating to different groups and understanding how these affect decision-making and interactions.

Diversity must be embedded throughout the organization from the senior management downwards.

And it’s often about confronting implied attitudes that may not be obvious. We can all take the easy way of favouring people who look and think like us. One of Hera McLeod’s colleagues demonstrated this when they said to her: “It’s easier to work in a less diverse environment. There’s less friction.”

Easier? Only for some. More effective? No.

Further reading

Diversity in the Workplace: Bringing in the Best

86% of female millennials consider prospective employers’ policies on diversity, equality and inclusion

Recruitment is one area that many companies focus on. Yes, you need processes to encourage employment of the best candidates, no matter their gender, race, sexual orientation, disability or any other characteristic.

It’s important if you want to be a company that good people want to work for. Research carried out by PwC shows that 86% of female millennials consider prospective employers’ policies on diversity, equality and inclusion.

Keeping the Best

But recruitment is only the start. What is perhaps more important is retaining your best staff. Good people are mobile. And millennials, in particular, will move if they find the culture is holding them back or not considering them fully.

Diversity in the workplace drives your culture and you must have effective systems to empower individuals and managers to confront poor behaviour and bullying. Open communications and open dialogue are vital. Training can also help employees identify and confront their own biases, whether conscious or not.

The world is shrinking, and organisations need to be able operate in and flourish in a wider range of international markets than before. This is especially true for British companies. If they are to succeed post-Brexit, they will need to be effective in a truly international context, in all sorts of cultures and markets.

If they are inwards-looking, grounded in a single, homogenous culture, they will fail.