The Diverse Organization: Finding Gold at the End of the Rainbow

(Originally published in the November-December 2011 issue of Human Resource Management.)

Organizations that benefit from having a diverse workforce do so because they have adopted policies on diversity as broader organizational practices, creating an inclusive culture that values individual differences in all actions and activities, according to a new report.

In “The Diverse Organization: Finding Gold at the End of the Rainbow,” the researchers reviewed about 100 studies on diversity and broadly defined diversity to include ethnicity, age, gender, educational background and professional experience.

The researchers evaluated the studies based on six key advantages of corporate diversity: recruitment, creativity, problem-solving, flexibility, cost and marketing (financial performance). While they found mixed results on individual elements, the report suggested that, overall, the more inclusive a corporate culture, the more financial success the company enjoyed and the more engaged its workforce.

Below are the researchers’ proposed theories based on their analysis, as well as practical solutions for organizations:

Recruitment

Organizations with inclusive cultures will have more success attracting diverse applicants because they actively demonstrate their commitment to diversity.

For example, along with including pictures of diverse employees on recruitment websites, job descriptions and organizational materials, inclusive organizations will include recent diversity-related accolades, provide a list of competencies that indicates varied opinions, skills and experiences are valued and emphasize a commitment to teamwork and learning.

Group Processes (Creativity, Problem-Solving and Flexibility)

Inclusive organizations understand it is worth investing in the skills needed to benefit from diversity in groups.

Diverse groups are more valuable if their members function well together. As such, an inclusive culture has policies, practices and additional resources that are focused on improving communication, conflict resolution and cohesion among all employees. These, in turn, result in improved problem solving, creativity and flexibility.

Cost

The organization-wide policies and practices established in inclusive organizations that have positive effects on group outcomes (as described above) result in reduced financial costs and negative employee outcomes (such as lowered job satisfaction and turnover).

For example, programs put in place to help employees in diverse groups relate to one another may also contribute to a reduction in turnover by reducing the isolation of diverse employees.

Marketing

It’s not diversity itself that leads to improved financial performance but rather the effective management of all employees, combined with the alignment of business strategy, HR strategy and overarching organizational culture that leads to improved financial performance in inclusive organizations.

For example, the report states an organization capitalizing on creativity and innovation by recruiting a diverse employee base, promoting positive group processes through training and development and ensuring retention by incorporating affinity groups and mentoring partnerships is more likely to expeirence financial success than an organization that focuses solely on numerical diversity.

Creating an Inclusive Culture — Practical Solutions

Inclusion will look different in each organization but should share some important features:

  • Diversity-related values are prominent in all organizational communications (internal and external).
  • All policies and practices are integrated to demonstrate the organization’s commitment to diversity.

Many of the policies and practices that are part of an inclusive culture are likely already in place in most organizations.

To make the organizational culture inclusive, leaders and human resources professionals within the organization need to work together to create programs and policies that benefit all employees and ensure diversity is embraced at all levels of the organization, in all communication and in all employee systems.

Read the full report: The Diverse Organization: Finding Gold at the End of the Rainbow.”

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