5 Ways Workplace Diversity Is a Competitive Advantage, and Concrete Ways to Obtain It

It's hard to talk about workplace diversity without feeling a pang of business jargon fatigue as we've been hearing these words a lot lately. Despite the term spiking the charts on Google Trends, workplace diversity is anything but a hiring trend or fad. The power and relevance of a diverse workforce will only continue to grow day by day. 

Understanding the benefits of a diverse workplace will not only benefit your company culture and team but it will ensure the business's staying power in our current economic climate. Having diverse talent from different ethnic groups, ages, genders, and cultural backgrounds is statistically linked to higher performing teams and more successful businesses.

I'm going to highlight some of the many benefits to diversity in the workplace, the types of diversity we’re talking about, as well as common challenges (and solutions) when attempting to build a more diverse talent pool. 

Types of Diversity

For our purposes, I'm going to separate types of diversity into two categories: inherent and acquired. 

Some common forms of inherent diversity categories are:

  • Race
  • Age
  • Ethnicity
  • Gender
  • Sexual orientation
  • Physical ability
  • Mental ability

Acquired forms of diversity include:

  • Education 
  • Religion
  • Work experience/skills
  • Language

It's worth going through each category and assessing how balanced your team is in each one of these categories. It may seem contrived to think about people on your team as metrics in your diversity initiative. However, using data to get a bird's eye view of potential segments of the population that you may be missing out on is proactive.

5 Benefits of Diversity in the Workplace

Creating a work environment that hosts a diverse talent pool is attractive to clients, job seekers, and investors alike because it provides a competitive advantage. A diverse team is difficult to replicate and offers a number of benefits to the business. Here’s just a handful of them.

1. Strength in Different Perspectives

Jack Welch, the former CEO of General Electric, once said, "The team that sees reality the best, wins.”

Hiring talent from the same schools, businesses, or even states can mean that your company culture may become saturated with like-minded individuals. Sure, that might mean everyone gets along and that can be nice. That said, diverse companies know that true magic happens when you bring people together with different backgrounds and make it safe for them to express their unique perspectives to help everyone more accurately see reality.

2. Increased Innovation

A Josh Bersin report suggests that top-ranking inclusive workplaces in the HR sector are 1.7 times more likely to be innovation leaders in their market. 

Deloitte also reported that, “When employees think their organisation is committed to, and supportive of diversity and they feel included, employees report [83%] better ability to innovate.”

Everyone around the table contributes their unique worldview which leads to more opportunities that would otherwise be invisible. No matter your business, your ability to continually innovate and improve your offering is essential, and how well you do that is rooted in workplace diversity.

3. Effective Teams

In 2012, Google launched “Project Aristotle” to study 180 Google teams, conduct 200+ interviews, and analyze over 250 different team attributes.

One key thing that top-performing teams had in common was the ability to create psychological safety. When there is psychological safety, team members feel safe to voice a contrarian opinion, ask for help, or make mistakes. 

Companies that embrace diversity naturally encounter more differences in opinions and are given more opportunities to create norms that foster psychological safety. According to Deloitte, companies that succeed in creating these norms experience a 42% uplift in team collaboration. 

4. Happier Customers

Deloitte reports that companies that succeed in creating inclusive and diverse environments lead to a 31% uplift in employees’ responsiveness to customer needs. This responsiveness helps create more satisfied customers, reducing churn, and increasing the lifetime value. 

5. Boosting the Bottom Line

A McKinsey & Company report across 180 companies in Europe and the United States concluded that more racially and ethnically diverse companies were 35% more likely to have above-average profit margins. 

The combination of effective teams, increased innovation, and happier customers directly impacts the bottom line. 

And further down the road, developing a reputation for all three of those things creates an ideal company culture that attracts highly talented people. When talented job seekers are knocking down your door it makes the recruitment process smoother, further decreasing costs and increasing margins.

Challenges (and Solutions) in Building a Diverse Group

Workplace diversity in a modern office space

Cultural diversity is not something you can drastically impact overnight. It takes time and intention to cultivate strong workplace diversity. Let's dig into a couple of the common challenges and their solutions.

Challenge: Unconscious Biases

Cognitive biases are a result of the brain trying to simplify a process. Since we’re humans and not computers, this process is inevitable if we aren't keenly aware of it.

Social pressures, personal motivations, emotional response, and our brain's inability to be totally objective are common factors that create bias. In practice, this means we are more likely to unconsciously accept those who present themselves closest to our own ideals. Other key factors that affect our ability to make an unbiased decision include memory, attention, and straight-up mental mistakes. 

Solution: Assess Workplace Diversity

It starts with leadership. By first showing a keen interest in building a diverse workforce and challenging your own biases openly, it creates a dialogue where people may examine their own tendencies. A great place for investigating and challenging unconscious bias could be during the interview process. You might:

  • Pre-empt your hiring process with a test like Harvard University and Virginia University’s Project Implicit to test your own bias in different categories and share your insights with the rest of the hiring team.
  • Assess where you can integrate more data-driven decision making. Searchlight’s platform helps with this early on in the interview process by leveraging reference data to create quantitative and qualitative behavioral profiles.
  • Investigate the diversity of the hiring team or panel and openly address any gaps.

As a leader, it’s also important to address it within yourself, whether it’s in the form of leadership programs, coaching, or therapy to help build self-awareness and foster intercultural and intergenerational understanding within the team.

Challenge: Resistance to Change 

If your goal of building a more diverse team becomes a top-down diversity initiative that feels unnatural, forced, or deceptive to your existing team, it can be detrimental to the company culture and cause team members to check out. This would defeat the purpose of improving on the culture if it’s nonexistent. Keep in mind that most people have a difficult time with change, even if it's for the greater good.

Solution: Celebrate Small Wins

Be sure that you are considering the experience of your current employees and think about it in terms of baby steps. It’s important to be direct and honest about your intention to increase diversity in the workplace as well as setting reasonable expectations for how quickly people change.


  • Express an interest in understanding your team by asking relevant questions around barriers and obstacles in their roles. Examples of questions might be, “How can we better support your perspective?” or “How safe is it for you to contribute your ideas at work?” or “Whose voice are we overlooking?” 
  • Encourage and incentivize self-awareness by providing a learning fund for those who want to engage in courses or materials that support their personal development.
  • Acknowledge and celebrate team members when they demonstrate growth in creating a more inclusive environment.
  • Consistently model the behavior you want to see become the norm.
  • Express openness and proactively ask for feedback around inclusion versus limiting it to certain “diversity” meetings. Build it into discussions where it makes sense to do so.


  • Frame diversity as a means to profit or a quarterly business goal.
  • Use shame or judgment. Instead, create a culture around empathy, curiosity, active listening, openness, and vulnerability.
  • Avoid the discomfort of exploring difficult topics. Model curiosity and create space to talk about sensitive topics. 
  • Don’t expect change overnight. Expect change to happen in small steps. 

Workplace Diversity Is a Relay, Not a Sprint

Workplace diversity: Person hands off baton to another

Looking at improving the culture over time is going to ensure that it’s done with an acute awareness that’s lacking in many "diversity initiative launches." In order to reap the benefits of diversity mentioned above, you and your leaders have to actively model a work environment that fosters inclusivity, curiosity, and respect. 

When you’re focused on increasing workplace diversity, there’s no better way to make changes that immediately count towards your goals than to recruit purposefully using Searchlight. The Searchlight platform eliminates bias by leveraging cognitive science best practices, providing structured and automated reference data early in the recruitment process. By including Searchlight, 80% of companies have increased underrepresented minority hiring within the first 90 days. 

Automating your search is a great step towards workplace diversity but remember that it’s a relay, not a sprint. Each person plays their part with a healthy dose of self-awareness and it all starts from the top. Model the behaviors you want to see, create buy-in within your leadership, get a consistent pulse on where your team is and meet them where they’re at, and celebrate the small wins as you take the leap forward together.

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