Is it true that the more diverse a workforce, the more productive is that workforce?

Diversity can indeed have a positive impact on productivity, innovation, and overall performance in the workplace, but it’s not as simple as saying, more diversity equals more productivity.

Diversity, of course, means different things to different organizations, and it can even mean different things within an organization. To an organization providing childcare, hiring more men typically means their workforce is becoming more diverse. To an organization with a lot of engineers and marketing professionals, they may find hiring more women into the engineering group and men into the marketing group will make them more diverse. There are many, many words that employers use to describe who they consider to be diverse, but some of the most common are Black, African American, Latino, Indigenous, LGBTQ+, first generation, economically disadvantaged, or women.

First, let’s look at several reasons why the more diverse a workforce, the more productive is that workforce:

1. Different perspectives: A diverse workforce often brings a variety of perspectives, experiences, and skills to the table, which can lead to more creative problem-solving and decision-making. This can enhance productivity because diverse teams may come up with innovative solutions more quickly and effectively.
2. Market Understanding: Diverse teams may better understand and reach diverse customer bases. This could result in more effective marketing strategies and customer service, potentially increasing sales and productivity.
3. Talent Attraction and Retention: Companies that demonstrate a commitment to diversity may be more attractive to a broader range of candidates. They might also retain employees better if those employees feel valued and included, reducing turnover and the associated costs of hiring and training new employees.

But, as with most things in life, there are pros and cons to diversity. It has massive benefits to an organization, but some challenges exist in order to achieve those benefits:

1. Communication and Cohesion: Diverse teams can sometimes face communication challenges due to cultural, language, or other differences. This might slow down decision-making or lead to misunderstandings.
2. Conflict: Differences in perspectives can lead to conflict, which if not managed properly, can hinder productivity rather than enhance it.
3. Bias and Discrimination: The potential benefits of diversity may be negated if the employer does not implement proper measures to promote inclusion as we all have conscious and unconscious bias. It isn’t realistic to expect anyone in a workforce, let alone an entire workforce, to be free of such bias and, therefore, we need to acknowledge that some discrimination will persist. That doesn’t mean that we need to accept it. We shouldn’t condone it and certainly not promote it. But by acknowledging the reality that it will exist, we work to minimize it and, therefore prevent it from negating the potential benefits of diversity.

A diverse workforce has the potential to be more productive. To see the productivity benefits of added diversity, employers must pair diversity with inclusion, equitable practices, and good management. Also, we need to remember that productivity gains will not be even across different functions. Large organizations with hundreds, thousands, or even tens of thousands of employees are likely to see the most significant improvements in productivity in functions that require creativity and innovation such as product design and marketing as opposed to more routine or standardized tasks such as accounting.