Why creating an inclusive workplace is good for the bottom line

By Nareen Young | Mar 18, 13 09:16 AM

We're celebrating A Taste of Harmony this week, because diversity in the workplace is great for so many reasons!

A Taste of Harmony is Australia’s biggest celebration of cultural diversity in the workplace and kicks off today. It’s timely to remember that embracing and leveraging a culturally diverse workforce is not only a good idea for attracting and retaining the best talent and reflecting your customer base – it can have real benefits for the bottom line. These benefits have been measured in a number of international studies.

Diverse teams are better able to solve complex problems. A diverse team has a far better chance of generating unlikely idea combinations that can be truly ground-breaking because people from different cultures and backgrounds approach any given challenge from different perspectives. One study of 28 teams found those that were heterogeneous solved complex tasks better than the homogeneous teams. They noted the diverse teams exhibited a higher level of creativity and a broader thought process.

Diverse perspectives also lead to innovation. Being willing to embrace new ideas and move on from traditional approaches allows people to envisage new possibilities. Companies that drive innovation by leveraging the ideas and knowledge of their employees meet product revenue targets 46% more often and product launch dates 47% more often than industry peers.

Diverse work teams – properly managed and trained – produced results which are measurably better; one study found six times higher than homogenous teams.

Preventing race based discrimination reduces unwanted costs. These costs can include:

  • Lost productivity – race-based discrimination at work is associated with poor job quality, reduced organisational productivity, commitment, trust, satisfaction and morale as well as increased cynicism and absenteeism. Unresolved disputes within workplaces are likely to result in a reduction in work team cohesion and lost management/employee time for investigations, hearings etc. An estimated 70% of employees exposed to racial discrimination, violence or harassment take time off work.
  • Staff turnover – costs can include resignations and expenses associated with employee recruitment, training and development.
  • Workplace accidents, stress and illness claims – there is strong evidence that race-based discrimination causes ill health, especially mental health problems such as anxiety and depression.
  • Significant legal costs – responding to formal complaints through internal mechanisms is estimated to cost an average of $55,000 per case. Legal fees regularly exceed $100,000 in discrimination matters with awards of damages also exceeding $100,000.
  • Damage to the company's reputation – this can have short as well as long term impacts with research by the US Department of Labor indicating that when employers have a diversity complaint which goes public, their share price will drop within 24 hours. Conversely, when employers win a diversity award their share price will increase within 10 days. 

Cultural diversity provides access to new markets. Language skills, cultural knowledge and understanding, business networks and knowledge of business practices and protocols in overseas markets can help companies identify and enter new local, regional and international markets. Some 9.9 million Australian consumers are either born overseas or have at least one parent born overseas – businesses that want to reach their ‘whole’ market cannot afford to ignore this critical mass of consumers.

Diversity Council Australia is embarking on a landmark research project called Capitalising on Culture: A National Survey of Australian Business Leaders, that investigates whether businesses are truly maximising the benefits of a diverse workforce. For the first time ever in Australia, the board and senior executives of the top 20 ASX listed organisations will be asked about their cultural background, global experience and their views on their organisation’s capacity to capitalise on cultural diversity. In addition, in partnership with OriginsInfo, we will analyse the cultural origins of the board and senior executive team of all ASX 200 companies. 

The research is sponsored by PwC, the Department of Immigration and Citizenship and ANZ (and supported by IBM) and has the endorsement of the Australian Government’s Australian Multicultural Council. For more information on the research, head here. 

We know Australia and its workforce have never been richer with diversity – this includes experiences, tales and food from around the world. A Taste of Harmony is a fundraising-free initiative which seeks to celebrate this wealth of diversity. From 18 - 24 March, Australian workers from every industry, big and small will stop what they’re doing to share food and a little of their cultural heritage with colleagues. To participate, simply register online at www.tasteofharmony.org.au, set a date and ask colleagues to bring a dish representing their cultural background, their favourite meal or even food from a culture they have never tried before.

I encourage all organisations to take part in this simple celebration as another step towards creating an inclusive workforce.


Nareen Young is CEO of Diversity Council Australia, the independent, not-for-profit workplace diversity advisor in Australia. Visit www.dca.org.au

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