Workforce diversity is a core component of organizational success. However, many companies still aren’t getting it right.
What is workforce diversity? It may seem self-explanatory, but it’s important to understand what the term means.
Gartner defines it well: “Workforce diversity is the collective mixture of employees’ differences and similarities (including individual characteristics, values, beliefs, experiences, backgrounds, preferences, and behaviors).” Diversity in an organization can comprise differences in race, culture, ethnicity, gender, age, abilities, sexual orientation, socioeconomic background, and other demographic characteristics.
Further, true diversity exists at every level of the organizational hierarchy. Just hiring entry-level staff of an underrepresented group doesn’t cut it. Instead, organizations that are truly committed to diversity will have diverse leaders and managers, too.
Table of Contents
The Importance of Workforce Diversity
Better Understanding of the People You Serve
How does workforce diversity affect workplaces? Let’s review the key benefits of workforce diversity and inclusiveness.
Diversity of Thought
Teams of culturally diverse people are more likely to introduce new products, explain David Rock and Heidi Grant in Harvard Business Review (HBR). And teams with more women are more likely to launch groundbreaking innovations.
In short, you’ll avoid stagnation, promote agile responses to change, and strengthen your offerings with a diverse team.
Improved Productivity Due to Workforce Diversity
Firms with more diverse leadership show stronger productivity, research has found. This translates to increased profits. If diversity exists among both upper and lower management ranks, firms will see the greatest benefits. But diversity is especially critical among top management.
Stronger Morale and Satisfaction
With a diverse and inclusive workforce, employees will feel more satisfied. Feeling valued has a major influence on satisfaction, and it relates strongly to feeling included. One in 4 employees doesn’t feel valued at work, a report on diversity by the International Labour Organization (ILO) found. Improved diversity and inclusivity at all levels can help change that.
Diverse staff often better reflect the people they serve. This allows them to better understand and respond to the needs of their customers. Plus, customers will relate to them more strongly, improving loyalty and satisfaction.
Workforce Diversity Increases Access to Talent
Diversifying your talent base will give you access to the best talent. You’ll connect with the most capable employees, broadening your pool of options.
Now let’s turn to some common workforce diversity issues faced by many companies.
Workforce Diversity Challenges
This is by no means a comprehensive list of workforce diversity challenges. Rather, it lists a few key hurdles that companies must often overcome in regard to diversity.
Becoming diverse in some ways but not others can cause inequalities to persist. For instance, a company might hire more women but not people of color. Or, it may hire people who tend to think alike (perhaps due to educational, socioeconomic, or religious background) despite their differences.
Leadership may congratulate themselves for increasing diversity, failing to realize where they’ve fallen short.
A company may hire just one or two employees from an underrepresented group. This leaves these employees feeling isolated. They might feel ignored in group discussions or treated as though they don’t belong. As a result, they probably won’t stick around for long.
Meanwhile, the company may feature these employees on public-facing materials. They may expect the employee to be the “face” of diversity for the organization.
Tokenism can also involve promoting people to advanced roles without the right support. Just aiming to check a box, the organization may promote an employee from an underrepresented background without providing training. This sets them up to fail. (This situation happens too often with employees nominated to lead DEI initiatives, Forbes notes.)
Lack of Diversity in Leadership
Some organizations hire diverse junior-level staff but struggle to diversify management. Instead, they end up promoting or hiring people from a similar background. They may aspire to become more diverse but struggle to grasp how to begin.
In a recent report, McKinsey found that companies too often fail to promote their Black employees to advanced positions.
“While Black employees make up 14 percent of the workforce at the report’s participating companies, they make up just 7 percent of the managers and hold just 4 to 5 percent of jobs at the senior-manager, vice-president, and senior-vice-president levels,” says McKinsey.
At the current rate of change, it would take 95 years to reach equity between Black and white professionals, they add.
These problems can feel extremely demoralizing to employees. In the following section, we’ll look at best practices that work to solve these problems.
How to Promote Workforce Diversity
According to the ILO report, there are 4 key components of achieving a diverse and inclusive workforce:
- Make diversity and inclusion a key part of strategy and culture.
- Increase diversity among management and leadership.
- Ensure that leaders serve as role models.
- Make sure every aspect of employment, from hiring and retention to development, uses inclusive practices.
The following best practices will help you fulfill each of these objectives. Through these steps, you’ll take a strategic approach to workforce diversity.
Establish Goals and Benchmarks
What will success look like for your company in terms of diversity? Begin answering that question by assessing where you are now. Review diversity metrics, like percentages of women and people of color with high-level positions.
Compare this data against the demographic makeup of your local population. If you work remotely, you can also compare your demographic makeup with the overall population of your country.
Look at educational levels among underrepresented groups in your region (or the nation), too. Consider the availability of diverse candidates with the desired training and education. Also examine whether you can change educational requirements, as Ellyn Shook suggests in HBR. (We’ll address this more in a moment.)
Look at percentages of underrepresented candidates who are advancing through the recruitment process, too. Compare percentages of employees of different demographics who advance from lower-level to higher-level positions as well.
Based on this comparison, consider whether particular groups are underrepresented. Set target levels of representation at each tier of the organization.
Then, set ambitious but attainable benchmarks for success over the next year. For instance, you can set training goals for employees as well as recruitment goals. Create goals and objectives for the next three years as well.
Review Employment Equity Policies
Make sure your policies on employment equity are up to date. Set equitable policies in areas like these:
- Hiring practices
- Pay structures
- Advancement practices
For instance, advancement practices will help you make fair promotions and raises. They can also specify the training and development that must be provided to employees based on their roles and levels.
Pinpoint and Address Biases
Examine performance reviews to see if they align with actual performance. Using goal-tracking software can help you spot discrepancies.
Performance review tools will also detect biases while making assessments more fair. Discuss these issues with managers and train them on how to evaluate employees fairly.
Build an Equitable Recruitment Process
Strengthen your recruitment process through these steps.
Diversify Your Review Committee
People often tend to hire candidates who remind them of themselves. So, try to build a review committee that represents a diverse range of backgrounds. Coach them on how to avoid implicit bias, too.
Consider Nontraditional Credentials
When recruiting and hiring, consider life experiences aside from formal education. For many jobs, a four-year degree isn’t actually essential, as the Society for Human Resource Management (SHRM) points out. Considering alternative credentials, including human skills, can help you find the best talent.
As Shook advises, you could create an apprenticeship program that provides in-house training in technical skills.
In job ads, clarify which criteria are “nice to have” and which are essential. That way, you won’t deter capable candidates who don’t possess every skill on the list.
Recruit from Diverse Areas
Companies often struggle to recruit diverse candidates to a geographic area that lacks diversity. Being the only one from a particular racial or ethnic group can be incredibly hard, McKinsey notes. But if you operate remotely, you could recruit from geographic areas known for diversity.
Likewise, recruit from historically Black institutions or minority organizations as part of your effort to diversify. Encourage employees to refer friends of all backgrounds to your organization, too.
Consider “Cultural Add,” Not “Cultural Fit”
Don’t focus on choosing candidates who fit your culture exactly, urges SHRM. Instead, look for people who can enhance your culture.
Offer Mentorship and Sponsorship
Make sure each employee has the opportunity for mentorship. Pair up leaders and employees in formal mentoring arrangements so no one gets left out. Further, teach mentors to go a step further by acting as sponsors. Active sponsorship—meaning promoting employees’ work to higher-level colleagues—can help mentees reach the next level.
Provide Ongoing Training
Improve workforce diversity by offering training that enriches every employee’s growth, tailored to their aspirations. Make sure each employee knows how to access these opportunities. And ensure that everyone feels comfortable doing so. If any employees aren’t utilizing the trainings, find out why.
For instance, are the trainings at a convenient time for their schedule? And does the trainer make them feel they belong?
Build a Strong, Inclusive Culture
Culture plays an essential role in building a diverse workforce. Create a supportive environment where everyone enjoys working and feels included. Start by setting a culture strategy based on your organizational values, and take the following steps to nurture a strong culture.
Listen to Employees
Listen to employees’ perspectives about how your culture needs to change. How is that done? Survey them on the level of diversity and inclusiveness in your company. Then follow up with one-on-one conversations or focus groups on key topics.
Focus on Allyship
Strong workforce diversity requires that all employees be educated on allyship, too. Managers and leaders must especially learn to be allies to people of diverse backgrounds. Allyship means speaking up for diverse colleagues when they’re not in the room—as well as when they are. Here are a few other ways to show allyship:
- Letting others know about diverse employees’ strengths and accomplishments.
- Being empathetic, striving to understand their perspective.
- Asking for their opinions and including them in conversations.
- Working to detect and address personal biases.
- Pointing out where the organization needs to grow.
Hold periodic workshops on allyships for leaders, managers, and other employees. These workshops can provide the awareness and skills to speak up or self-correct when needed.
Make Appropriate Accommodations
Make accommodations for employees’ religious holidays, for example. Further, offer flexible family care leave policies and accommodations for employees with disabilities.
Through these steps, you’ll build a workplace that welcomes and supports employees of all backgrounds. As a result, diversity will grow at all levels.
Workforce Diversity FAQs
You may still have some pressing questions about workforce diversity. We address a few common ones here!
What level of diversity should my company aim for?
This depends on several factors, like the demographic makeup of your area. Every company must set its own target goals, based on the population of the area where it operates. Consider whether you are struggling in some areas more than others. For instance, if you have no employees with disabilities or LGBTQ+ employees, set a goal for improvement in that area.
Are affirmative action or equal employment opportunity policies the same as workforce diversity initiatives?
No. While they have some overlap and shared goals, diversity initiatives go beyond policy. They focus on getting at the root of the issues preventing workplace diversity. This includes fostering a broad cultural shift as well as developmental strategies that promote diversity.
Is diversity the same as inclusivity?
No, although they work hand in hand. As the ILO explains, inclusion means making sure all employees have a good experience, feel valued, and feel a sense of belonging. Diversity without inclusion doesn’t accomplish those things.
Through these workforce diversity management practices, you’ll enhance your company’s success. Employees will view your company as a highly desirable place to work. In return, they’ll refer a diverse range of talent to your organization!
Learn how to support your diverse workforce with the right management tools. Sign up to demo our product.