Diversity drives business success: Here’s why.

Diversity Drives Business Success: Here’s Why.

Australia is embracing diversity across the spectrum. Acceptance is the theme and everyone is getting involved.

From the historic decision on gay marriage in December 2017 to the government releasing a strategy to boost women's workforce participation – moves are being made in the right direction.

The people of Australia have spoken and the government is making their intentions clear: Diversity of all kinds is becoming a national priority.

Of course, there is always more to be done. We have a way to go when it comes to true gender equity, there are still racial inequalities to be addressed and discrimination within the LGBT community has decreased but still exists.

Yet, there's no denying that it's an exciting chapter in our national history.

Diversity of all kinds is becoming a national priority.

What does this have to do with Australian businesses?

It's also an exciting time to be a professional. The modern business landscape reflects the national climate – and in 2018 this is an exceptional thing.

Companies across the country are well on their way to fully understanding the importance of having a genuinely diverse workplace. Beyond being morally correct, having a variety of staff members means you have a varied pool of opinions and viewpoints. This often results in having the best possible discussions about core business decisions.

Just think: If you have 20 people of the same gender with the same general backgrounds sitting in a room, you'll likely come to similar conclusions.

It's like having an AFL team with only fullbacks. To compete in the league you need strong players in every position. Otherwise, you have no hope.

When you add a range of experiences, ethnicities, genders and viewpoints – you have a much more well-rounded discussion.

This diversity of thought opens the door for better problem-solving and high performance outcomes. In fact, a study by Gallup found that businesses with a diverse workforce were better positioned to serve varied customer bases and ultimately experience superior performance in their markets as a result.

Having more diversity in your office means you can leverage differing viewpoints and experiences.Having more diversity in your office means you can leverage differing viewpoints and experiences.

Diversity by the numbers: In what ways does it drive success?

Don't believe us? The proof is in the pudding, so let's run through some of the research.

McKinsey compiled a report titled "Diversity Matters" which included data collected over a span of several years. The document is chock full of evidence that diversity does indeed drive business success.

For starters, McKinsey uncovered that companies in the top quartile for racial or ethnic diversity are 35 per cent more likely to have financial returns above their respective national averages. In fact, businesses ranking in the top quartile for gender diversity were 15 per cent more likely to garner financial returns above their respective national industry medians.

Companies in the top quartile for racial or ethnic diversity are 35 per cent more likely to have financial returns above their respective national averages.

There is also a linear relationship between racial diversity and better financial performance. For every 10 per cent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes rise 0.8 per cent.

Even more interestingly, organisations in the lower quartiles for both gender and ethnic diversity weren't just failing to lead the pack in their respective industries, they were actually performing worse than the industry averages. Companies at the bottom of the pack were statistically less likely to achieve above-average financial returns than the average companies in the data set, according to McKinsey.

Another international study of 2,360 companies conducted by wealth management firm Credit Suisse found that organisations with at least one woman on the board outperformed businesses with no female board members by 26 per cent over a duration of six years.

It isn't speculation to say diversity (of all kinds) drives business success – it's a well-researched fact.

How can you create and embrace a diverse workplace?

So what can be done with this information? The logical next step is to understand how to strategically create a more diverse workforce. Once that is accomplished, you'll need to embrace and nurture this diversity.

Here are a few key action actions to help you get going with these processes.

1. Don't only think in terms of compliance

If you're only looking to diversify your workforce to meet board quotas or comply with affirmative action then you're in the wrong mindset. Embracing diversity must come from a desire to create a truly inclusive environment. This means making diversity a core organisational value, communicating this to your team and ensuring it rings true at every level of your business.

2. Educate yourself on diversity and inclusion practices

Sure, you know what diversity looks like, but do you really have a full grasp on why it matters? Are you curious about the ways you can promote it? You can't promote anything without first understanding it's values and feeling confident in the steps needed to achieve it. Educate yourself so you can then educate your team.

3. Ensure diversity is a core focus beyond recruitment

If your business is currently lacking diversity, the obvious stepping stone to a more diverse culture starts with recruitment. But it shouldn't end there – you need to have steps in place to retain your diverse employees. This means addressing individual and collective differences at every step of the employee's lifespan, supporting new employees when necessary and ensuring they have the resources they need to thrive. You want to embrace diversity but avoid isolation, ensuring all members of your workforce feel comfortable and included.

Need a helping hand? Reach out to SeventeenHundred today!

We're here to make the journey towards diversification a little bit easier.

It's clear that diversity should be a core focus for any Australian business. And we're here to make the journey towards diversification a little bit easier.

At SeventeenHundred we work closely with businesses to achieve core organisational goals in the realms of wellbeing, diversity, work-life balance and beyond.

Whether you're looking to participate in cultural workshops or sit down with a consultant to discover how to drive diversity throughout your organisation, we have the resources for you!

To learn more, contact one of our team members and we'll help you get started.