Diversity in Organizations Pays

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By Wim Dodson


By the year 2065 the United States will not have any single majority ethnic or racial majority, according to Pew, the survey company. It’s a happy reality to look forward to from an organizational productivity viewpoint.

Homogeneous organizations, however, face becoming irrelevant. Much of that has to do with a changing world in which the walls that once separated races and ethnicities is coming down. Organizations that are slow to diversify their ranks will become irrelevant as they no longer reflect the markets in which they operate. They may also find themselves increasingly vulnerable to lawsuits that will affect their balance sheets.


Greater diversity leads to greater riches

CREATE, an independent research center, wrote a report in 2013 entitled “Harnessing Workforce Diversity to Raise the Bottom Line”. The report observed that a more diverse staff improves company efficiency. The study involved 500 organizations in the United States and Europe. The study revealed that diversity in organizations grants businesses several advantages, including:

  • Customers want to be served by a business they can identify with;

  • Teams comprised of blended ethnic backgrounds, genders and backgrounds are most likely to be more innovative than homogeneous teams;

  • A diverse pool of job candidates is larger and the selection process easier than a homogeneous one;

  • Companies enjoy a greater wealth of experience and skills from a diverse staff.

  • An organization’s public image improves when it shows it is diverse;

  • A diverse experience base increases staff inspiration;

  • Diversity motivates and develops business owners;

  • Elevating diverse professionals into management ranks provides role models for young talent in the organization.

  • Businesses increase their penetration into new markets at home and abroad;

  • Diverse organizations show better general financial results.


Discrimination also pays … financial damages

Willful ignorance of the top-line benefits of diversity can affect company bottom-lines. For instance, Texaco settled a racial discrimination case for $176 million in 1996; Coca-Cola paid out $192 million in 2000 in a sex discrimination case opted; and Wal-Mart settled numerous disability discrimination cases for more than $7 million. Wal-Mart in 2017 also saw a pending and potentially extremely costly case alleging sex discrimination.

Social media has enabled groups once disenfranchised by mainstream business to compare notes. Individuals within under-represented groups and across cultural and ethnic boundaries are discovering their power in ways that are creating a backlash by entrenched interests. The 2017 cases of gender discrimination - one by a man and one by a woman - against Google illustrate the cultural rip currents that are transforming organizations.

Businesses are finding it’s not only unrealistic any longer to deny the diversity upon which modern society is built, but unprofitable, too.