As the nation grows more diverse with each passing year, employers are taking note. No longer is the subject of diversity confined to the walls of the human resources department. Savvy businesses know the importance of diversity in all aspects of the business, from entry-level positions to leadership. Businesses that emphasize inclusion and diversity's importance are poised to succeed in the long-term for several reasons.
One reason diversity is so important in business is that a diverse workforce is a more creative and qualified workforce. By selecting from a larger, more diverse pool of candidates, companies have a better chance of selecting the brightest stars to hire. Additionally, bringing together people with different backgrounds, skills and qualifications helps build better problem-solving teams. In a 2011 Forbes study, 85 percent of companies with annual revenues greater than $500 million agreed that diversity is crucial to fostering innovation in the workplace. Moreover, a diverse workforce is a happier workforce. Businesses that do not value the importance of diversity are likely to see higher employee turnover rates than businesses that are more inclusive, because work environments that lack diversity are more hostile and decrease overall employee morale. Higher employee turnover leads to higher costs to recruit and train new employees, only exacerbating the morale issue. Committing to creating a diverse, discrimination-free work environment helps a company avoid these costs and retain quality employees.
In addition to cultivating a better workforce, diversity is important in business because a more diverse company is better able to relate and market to a diverse customer base. Consumers from different backgrounds, including women, African-Americans, Asians, gay and transgender people have enormous buying power in the economy. By working with a diverse set of knowledgeable employees, a company can make better marketing decisions to fine-tune advertising efforts and reach multiple customer groups. Additionally, consumers appreciate diverse companies and are more comfortable spending money with companies that mirror their own core values.
Lastly, diversity is important to businesses because it is a major driver of economic growth. For instance, over the past 40 years, women's share of labor in the United States has grown from 37 percent to 47 percent, accounting for nearly a quarter of the country's current gross domestic product, according to a McKinsey & Company study. By the year 2050, there will be no racial or ethnic majority in the United States. If companies commit to marketing and meeting the needs of diverse communities, there is little doubt they will benefit economically from these efforts.
By 2016, 70 percent of the American workforce will be comprised of Black, Latino or Asian people. By 2043, White people will no longer represent the majority. Diversity will only continue to grow, so it is prime time to make it a priority in hiring practices, marketing efforts and any other business practice. Companies that acknowledge diversity's importance and commit to creating a more inclusive environment are sure to reap the economic benefits.
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