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4 Ways Diversity Is Directly Linked to Profitability

Jana Turner


Workforce diversity is becoming an increasingly vital component in the business world. There is good reason for this trend. Research shows that more diverse staffs have been linked to rising company productivity levels, which directly correlate with increased profitability. In fact, Barron’s recently published an articlehighlighting the many ways diversity has measurable impacts on firms’s success. In short, today’s businesses simply cannot afford to ignore diversity when hiring.

Bottom lines are impacted by diversity across the board: gender and sexuality, ethnicity — even age, which is often overlooked as a category of potential discrimination. Understanding how diversity of all types affects profitability is the first step to incorporating this broader-minded philosophy into a company’s culture. Below are four ways diversity impacts the bottom line for businesses of all sizes.

Related: Diverse Hiring and Inclusive Leadership Is How Startups Thrive

1. Diversity attracts more talent

Companies that display ethnic, gender and age diversity appeal to a broader spectrum of job seekers, giving those companies a better chance at attracting top talent. Today’s companies are in a fierce competition for the best employees and are always looking for ways to draw them in. Simply put, diverse companies appeal to a diverse workforce and have a distinct advantage over companies that do not have a healthy percentage of women and people of color and varying ages on staff. When recruiting, businesses that source candidates from a diverse base are more likely to hire people with diverse characteristics. 

2. Different experiences lead to more innovation

If everyone on the team thinks the same way, there’s little room for innovation, which creates a stifling environment for inventing the next big thing. On the other hand, people from dissimilar walks of life approach the world from a wide range of perspectives and offer unique intellectual capital to the companies for which they work.

Listening to the viewpoints of those who have had different experiences engenders richer brainstorming sessions, which foster outside-the-box thinking and higher levels of creativity for today’s companies. These sessions can in turn lead to an idea or invention that will help a firm distinguish itself from its competitors and become more successful.

3. Diverse thought leads to increased customer satisfaction 

Serving the end user is difficult if a company’s decision-making team doesn’t include people who can relate to that customer. A diverse team is more likely to relate to a particular audience’s wants, needs and pain points, creating greater opportunities to resonate with customers. Also, a diverse staff introduces the potential to reach new demographics in ways that might not have come to light with a homogenous group at the helm. Ultimately, customer volume and satisfaction can be improved through higher levels of diversity, which raises profitability.


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    Gender Equity/Diversity
    Racial Equity/Diversity

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