Want to make your business more financially successful? A more diverse work force could be the key. So reports a study led by Ryerson University professor, Kristyn Scott, which found that diversity in the workplace leads to happier workers, which leads, in turn, to greater loyalty and productivity, ultimately enhancing a company’s bottom line. Scott and the study’s coauthors, Professor Joanna Heathcote of the University of Toronto at Scarborough, and Professor Jamie Gruman at the University of Guelph, reviewed about 100 studies conducted between 1991 and 2009.
The professors evaluated the studies based on six key areas where diversity gives a business an edge:
- cost savings (due to lower employee turnover)
Defining “diversity” to include:
- educational background
- professional experience
The study found that overall, the more organizations embraced diversity in their culture, the more successful they became.
But in order for diversity to bring these benefits, it has to be more than superficial, the researchers caution. Scott says:
“[Some] organizations …. [show] pictures of diverse workers on their website[s] and say they have a commitment to diversity, but they’re not really going beyond what people may see as simply window dressing. Talk the diversity talk, but walk the talk.”
Small businesses have some natural disadvantages as well as advantages when it comes to diversity. The disadvantages: As a small company, your business may have a tendency to be somewhat homogenous. After all, small business owners often hire people they know or learn about through their connections, which can lead to hiring lots of clones of yourself. Second, as a small company, simply by your size your business is limited in how diverse it can be. If you only have 10 employees, you don’t have as many options to fill in the positions with diverse workers as a huge multinational corporation.
But small businesses have some important advantages, too. For one, as Scott points out, diversity needs to be authentic in order to bring business benefits. And small companies, due to their size, are more likely to be authentic in their behaviors. While big conglomerates can pay lip service to diversity while embracing a very different reality, at a small company, it’s much harder to “fake it.” In addition, the small size of your business means your team naturally interacts more closely, sharing opinions and ideas freely.
Is your business as diverse as it could be?
Diversity isn’t just about the outside – it’s about the inside as well. Even if your business is racially, culturally or gender diverse, are you creating a workplace where employees feel free to express different opinions? The more varied the experiences and outlooks your employees bring to the job, the more creative your workplace is going to be – and that can only benefit your business, financially and otherwise.
Business Diversity Photo via Shutterstock
Interesting post, Rieva.
You wrote, “As Scott points out, diversity needs to be authentic in order to bring business benefits. And small companies, due to their size, are more likely to be authentic in their behaviors.”
One of the greatest things that small businesses posses, is speed.
Of course, they have to remember to use that advantage at critical times.
The Franchise King®
Sam G. Daniel
Your last paragraph is the most important. No matter how diverse your workforce is, it’s about creating an environment where people can express themselves.
I would even go as far to create incentives for new ideas that could cut cost or increase revenue. One such incentive could be a bonus up to 10% of savings from a suggestion implemented.
A diversity of opinion is key for a small business that doesn’t have the headcount to get a large amount of diversity in the other categories.
And I agree Sam. It’s all about having a workplace where people feel free to share their ideas.
Robert, you’re so right. It’s so important for small business owners to hire people who don’t think just like you do. A diveristy of opinion is the best way to encourage growth.
Wow! Who would have thought that diversity could have such an impact? Neat article.
I hire based on skills, qualifications, and personality, and try very hard to blind myself to the five points mentioned in the article above. I’m just not getting past this diversity thing being reverse-discriminatory. Not to mention, hiring based on those points is weakening America’s work force, plain and simple. Now, if two candidates are equal in the qualifications I look for, that’s a different story. Bottom line is that all I’m looking for is someone who can do the job best and has the personality traits that enhance my work force, nothing more…
Top notch ethics from the top down’