We’ve made some enormous progress in the last few years when it comes to the importance of diversity in the workplace. Despite ongoing problems some industries (such as the tech industry) have in successfully creating a diverse workplace, most people agree that diversity in the office has many benefits. It’s been shown to increase revenue and give companies a competitive edge by driving innovation, creativity, and providing new perspectives.
Overall, companies that successfully make diversity a priority tend to outperform less diverse companies significantly, and capture more market share. It’s hard to argue with those kinds of results—but are they the only benefits that matter when building a diverse company culture? Does diversity also make it easier to hold onto top talent long term? All indications point to yes. Here’s what you need to know about why diversity can help companies retain talent.
Diverse Environments are More Welcoming
Everyone wants to be welcomed and accommodated at a new job, and people become dissatisfied quickly if they don’t connect with their peers or feel that their ideas and contributions are given the same weight as their colleagues’. Businesses that foster diverse environments and cater to different work and learning styles tend to keep talent invested in their jobs long term, similar to the way successful classrooms function.
Schools across the country are working to make their curriculums more flexible to ensure equal opportunity for and investment in students of all backgrounds, in an effort to help all students succeed. Employers should also want every hire to succeed—and catering to the needs of a diverse workforce is one way to help employees succeed and stay long-term. Creating a comprehensive diversity plan and weaving it into the company culture will help every employee feel welcome—and welcome to stay.
Innovation, Growth, and Creativity
The best employees do more than just come into the office, do what they’re told, collect a paycheck, and go home. They innovate. They collaborate. They create. Innovation is crucial for a company’s success, and innovative companies tend to have better talent retention than companies that do not make innovation a priority. In order to tackle large problems, you need input from a diverse range of backgrounds and experiences to create truly effective solutions.
For example, hospitals often need to team up with other organizations in order to serve people in their communities who come from all walks of life. Serving the community as a whole means getting input from different sources, and the same is true within an organization. People who are part of big solutions built on teamwork tend to be more invested in their work, fulfilled, and likely to remain at their current company.
A Generational Priority
Another reason that diversity is becoming a huge factor in employee retention is simply a shift in generational views on diversity. The Millennial generation, which will soon make up the largest segment of the workforce, is the most racially diverse in US history, and they have different priorities when it comes to selecting a job than their parents did. Most Millennials prioritize growth and innovation, and believe that “cognitive diversity”—the blending of different backgrounds and perspectives—is key for business growth and success. Companies that don’t prioritize diversity may come off as stagnant, and young employees may move on quickly in search of a company they can grow with, instead of out of.
Increased Growth and Major Savings
Employee retention is crucial to running a lean and successful business. Zappos’ CEO Tony Hsieh famously stated that bad hires had cost the company $100 million by 2010. Figures for the costs of a bad hire are all over the place, but they’re all costly for businesses. Retaining good employees should be a major priority for companies, not only because employees become more valuable the longer they stay, but because turnover is so expensive. It can be difficult to create a truly diverse and innovative culture, but the rewards are increased growth and reduced expenses—two things every business should be focused on.
Ryan Ayers is a strategy and management consultant with over five years of experience in multiple industries including information technology, medical devices and logistics. Many clients call him the BizTech Guru. He is a freelance writer on the side and lover of all things related to business, technology, innovation and the LA Clippers.
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