The Economic Benefits of Workforce Diversity | Prosperix (2024)

It can seem odd to hear business leaders speak about the world becoming a more diverse place. The world has always been diverse, populated by an array of cultures, ethnicities, races, religions and orientations. It only appears more diverse to some because they’ve not had the same level of exposure in the past, whether the result of isolationist policies, exclusionary practices or technological limitations in travel and communications. Even now, ongoing changes in legislation and technology are breaking down the barriers between nations and people, ushering in a new era of acceptance, globalization, assimilation and unity.

As we can see, the ethnic and racial composition of the workforce is evolving rapidly – a trend that will continue to gain speed and shape the nature of tomorrow’s workplaces and talent.

Minority hires are following a steady upward trajectory, so much so that they are changing trends and setting new records. According to an analysis of the U.S. Labor Department data by The Washington Post, “for the first time, most new hires of prime working age (25 to 54) are people of color”.

Top performing companies have long realized the benefits of workforce diversity, understanding that the definition of workplace diversity goes well beyond considerations of race, gender and ethnicity. Workplace diversity in the 21st century has expanded to encompass values – the motivating factors that inspire talent to join a company, embody its organizational visions with passion, strive to make meaningful contributions and reach higher levels of productivity.

A truly diverse workforce cultivates creativity, productivity and innovation by bringing together talent from disparate backgrounds and experiences, who coalesce yet retain their individual identities.

Diversity has long been a hallmark of staffing providers. Back in the 1950s, the “Mad Men” years – and aptly named, because these were the halcyon days of powerful men in business – women who had taken unprecedented positions in the workforce to assist with the war effort were expected to return to lives of domesticity. Instead, many signed on to be “Kelly Girls,” a contingent labor program that catered to a minority segment of the workforce and which enjoyed enormous success and popularity.

Today, companies seeking a more inclusive, multicultural and integrated team of talent turn to staffing professionals for these needs. A 2013 Staffing Industry Analysts survey found that 66 percent of large companies that use staffing services emphasized a focus on diversity firms. It started with larger firms, but now almost every company is looking for it on their staffing suppliers.

Successful businesses have learned that they can rely on having workforce diversity to strengthen their operations and bottom-line profits. Diverse talent are paving the foundations of a more robust and unified economy that will flourish for generations to come.

Millennials, now one of the most closely watched and influential generations of talent entering the professional ranks, are also the most racially and ethnically diverse group in today’s workforce. A large majority of Millennials, 71 percent, appreciate the influence other cultures exert on the American way of life. That’s nearly 10 percent more than the outgoing Boomer generation.

Globalization contributes to rapid growth in industries, increased outsourcing and a need for multicultural savvy. Where the number of Boomers resulted from high birth rates, the presence of Millennials is fueled by immigration. This is important because the demographics of the nation are shifting to encompass unparalleled levels of diversity.

By 2050, according to estimates, the Hispanic population will grow by 167 percent, with Asians following close behind at 142 percent. Millennials, as progressive global citizens with a fondness for eclectic cultural qualities, will foster acculturation for the companies they serve through much needed language skills, attitudes, experiences and perspectives. And the benefits of having this true workforce diversity are enormous.

• A diverse workforce fuels growth. Our share of talent — along with the unique skills and aptitudes they bring — significantly increases as greater numbers of women, racial and ethnic minorities, senior talent, and members of the LGBT community enter the workforce. Between 1972 and 2012, for example, the number of female professionals grew from 37 percent to 47 percent, which represented 25 percent of the nation’s GDP at the time.

• A diverse workforce facilitates innovation and creativity. Over 85 percent of successful businesses interviewed in a Forbes research in 2011 said that a diverse workforce was the key to innovation and creativity. When people from different cultural backgrounds, diverse qualifications and experiences get together, they deliver new ideas, new ways of thinking about performance and service delivery, new methods for solving recurring issues, and new ways of reaching a wider audience.

• A diverse workforce markets to diverse demographics. Talent are living marketers. By tapping into the backgrounds and experiences of diverse talent, business are better positioned to market their products and services to a broader demographic of consumers: racial and ethnic minorities, women and customers who are gay or transgender. Growing up online, Millennials have an inherent grasp of the latest and greatest products, and who’s buying them. They constantly pore over social networks, 24-hour news aggregators, blogs, research wikis and pop culture sites. Close to half of them also live in the urban areas where the bulk of commerce occurs. Over 75 percent of the people in developed economies dwell in culturally eclectic urban areas — a radical change from just a few decades ago when the push was for suburban expansion. These are the stomping grounds of diverse Millennials and most likely their heirs. They have their fingers on the pulse of the target demographics of today and tomorrow.

• A diverse bench of talent is a wider bench. Successful staffing professionals know that to get the best candidates, one must source from the largest pool. By expanding their focus on diverse groups of talent, staffing recruiters are more likely to find the best and brightest candidates, those who possess in-demand skill sets, international experience, multi-lingual capabilities and market insights vital to companies that are transitioning to the global nature of business.

• Businesses with a diverse workforce have lower turnover rates. A company that nurtures and promotes diversity is one free of discrimination. As cultural fit, transparency and social responsibility become substantial motivating factors for new generations of talent, an environment that embraces the differences of its workers becomes more appealing. Workplaces that are perceived as exclusionary or hostile tend to experience high turnover rates. Businesses that welcome talent from all walks of life are more likely to retain and attract top performers.

• Entrepreneurs are a great example of diversity. Entrepreneurs in the United States hail from all corners of the world. They are people of all colors, genders and sexual orientations. Many of them are the small business owners of today, and potentially the large business operators of tomorrow. They are job creators, employers and pioneers. According to the most recent statistics from the U.S. Census Bureau, 22.1 percent of businesses in the nation are owned by people of color. Women own close to 30 percent of all U.S. businesses, with Latina-owned enterprises emerging as the fastest growing in this segment. And data from the National Gay and Lesbian Chamber of Commerce indicate that there are over 1.4 million LGBT entrepreneurs, representing about five percent of all businesses in the country.

• A diverse workforce is key to corporate growth. According to the Center for American Progress, there will be no racial or ethnic majority in the United States by 2050. Having a diverse workplace is going to be key for companies that want to grow, including having women, people of color, and LGBT employment representatives in boardrooms. That`s how companies will be able to become competitive in the global economy.

We’ve all heard the old business adages: diversify or die; don’t put all your eggs in one basket. Today, that axiom takes on new shades of meaning and truth. Business diversification must incorporate talent, not just product and service offerings or experimental directions in market strategies. New eggs must certainly be placed in the basket, and those eggs should not look the same.

It’s essential today to harness the power of workers from different cultures, genders, backgrounds, orientations and communities. Companies that want to succeed in a business-without-borders world of industry rely on the rising presence of women, people of color, and gay and transgender professionals in the workforce. The global economy is marked by variation, different beliefs and unique desires. To satisfy the needs of an increasingly complex and diverse society of consumers, business must capitalize on talent who understand those needs.

By 2050, if the forecasts hold true, we won’t recognize a racial or ethnic majority in the United States. The diverse talent of today will become the boardroom leaders and CEOs of tomorrow, none of them conforming to a certain image or backstory — none of them appealing to a single group of consumers. Staffing professionals understood this long ago. As the doors to global communities open, witnessing unprecedented levels of mobility and integration, more employers are reaching out to elite staffing partners who can help them find tomorrow’s diverse talent today.