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Five ways cultural diversity can benefit your organisation

25 Oct 2019 By Dirk Buyens

Increased creativity, greater employee satisfaction and an improved company image are just some of the advantages, says Dirk Buyens

Cultural diversity can be a huge benefit to businesses if a diverse team is managed correctly and effectively, and research clearly backs this up. A report by McKinsey shows a correlation between ethnic or cultural diversity in management and the financial performance of a company. In fact, a business with a very low culturally diverse workforce is 29 per cent more likely to be less profitable than their peers with greater cultural diversity.

But despite these clear benefits, the diversity of society is not always reflected in workplaces. Though many companies may be doing something to address this issue, such as recruitment efforts focused on attracting diverse workers, there may still be a challenge in convincing managers, and organisation leaders, of the real benefits of having a well-managed culturally diverse workforce. 

As part of the research I conducted at Vlerick Business School alongside Talent Tree, we engaged in focus groups with organisations looking to find culturally diverse staff, with a wider goal of creating a professional toolkit to help companies search for and manage diverse teams. From speaking with various businesses, we identified five key areas where better reflecting society in the workplace can have a hugely positive impact. 

An asset in the war for talent

As an organisation, if you want to win the war for talent, having a focus on cultural diversity and inclusion will give you a huge advantage. Not all expertise can be found in a local vicinity and, to attract and obtain the best talent, you have to search on a global scale. Not only this, but having a culturally diverse workforce is a draw for many potential employees looking to apply for roles within your organisation.

Stronger customer focus

It is not only employees who want to be able to identify with an organisation, its products or its services. Customers also want to feel as though a company speaks to them and holds similar values. With society becoming more and more diverse, customers expect businesses to value cultural diversity, and should be seen promoting this in their organisation. To better reflect customers, and increase their appeal to them, organisations have to be culturally diverse.

More innovation

Research has shown that having a hugely diverse team is likely to increase creativity in an organisation. Of course, if a team is diverse, they’ll have different backgrounds, cultures and experiences to draw upon, so they are able to think differently, innovatively and outside of the box. If a company wants to come up with new, creative and innovative business ideas, culturally diverse teams are a must.

Greater employee satisfaction

Research has also revealed that cultural diversity can have a positive effect on employee satisfaction – especially in the millennial generation, a group that is now vital in helping organisations move forward, innovate and achieve their goals. Employees are much happier when they are working in an inclusive and diverse workplace, and the same applies to customers. On international projects, for instance, customers prefer to see a multicultural team. 

A positive image as a socially responsible company

Potential employees and customers are becoming increasingly interested and aware of companies’ actions. They expect an organisation to act in a socially responsible manner, and cultural diversity and inclusion are inextricably linked with this. Having a visible, culturally diverse team will show the business in a much more positive light.

Ultimately, if a culturally diverse team is managed correctly and effectively, then it will only be a benefit to an organisation. Companies must understand this, and the fact that society in general is only going to become more diverse. If businesses actively look to become a better reflection of society, they can reap the rewards. 

Dirk Buyens is a professor of human resources and a partner at Vlerick Business School

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