Australia is a famously diverse country: we’re home to the world’s oldest continuous cultures, pride ourselves on freedom of political and religious expression, rank as one of the world’s most gay-friendly countries, and, with seven million Australians having migrated here since 1945, can collectively claim 270 different forms of ancestry.
Certainly much remains to be done, but recent research has delivered encouraging results: 84 percent of Australians believe that multiculturalism has been good for Australia, and most new migrants report a strong sense of belonging in Australia that deepens over time.
While there is certainly a relationship between the diversity of a society and the diversity of workplaces within it (more on this below), they ought not to be mistaken for one another. To take one example, a gay male who feels accepted by his sociocultural peer group may still feel (and, in quantifiable ways, actually be) disadvantaged in a workplace.
Similarly, individuals from ethnic minorities may gravitate towards communities in which shared interests and cultural values support a strong sense of belonging (consider, for example, the establishment of Melbourne’s vibrant Greek community). However, these advantageous demographic enclaves can prove difficult to replicate within the microcosms of the modern workplace.
Instead, multiple studies have shown that, even now, factors such as gender, sexuality, and ethnicity predictably result in reduced pay, higher rates of discrimination, stalled career progressions, and other disadvantages.
For example, when PwC released an internal analysis of employee pay in 2017, it revealed a gap of 12.8% in black, asian and minority ethnic (BAME) pay and a BAME bonus gap of 35.4%. In the same year, the Diversity Council of Australia reported that people from minority groups (such as Aboriginal or Torres Strait Islander workers, and workers with a disability) were up to twice as likely to experience workplace harassment.
Addressing problems like the ones above requires all workers to participate in constructive efforts to create more inclusive and diverse workplaces. But before getting into the how of diversity, it’s important to define clearly what diversity means and also substantiate the widespread assumption that diversity is a worthy aspiration to begin with. The rest of this article will be all about answering precisely that awkward question: when it comes to the workplace, well… why does diversity even matter?
When we talk about diversity, we generally think first about inherent traits, such as nationality, race and ethnicity, gender, religious affiliation, age, sexual orientation, socio-economic status, and disability.
Recent research affirms the importance of such traits in understanding diversity, but encourages us to go further by considering ‘acquired diversity’ or ‘deep-level diversity’. These categories include experiential attributes, such as cultural fluency, generational savvy, military experience, educational attainment, technological literacy, global experience, language skills, family and carer responsibilities, personal values, and gender smarts.
Taken together, the inherent and acquired elements of diversity allow us to define the term in a broad way: ‘diversity’ simply describes the mix of people in a workplace, society, or organization. By extension, we can say that inclusion occurs when a diversity of people within a given context (i.e. the workplace) are respected, connected, progressing, and contributing.
So now that we know what we’re talking about when we talk about diversity, we can get to the really important stuff: what makes diversity such a big deal anyway?
When it comes to cultural shifts, there are many things a workplace can aspire to be: more engaged with the broader community, more supportive of employee personal development, more invested in social events. So why diversity?
Here’s a better question: why not? As we’ll see below, diversity correlates with a range of benefits for individuals and organizations. Better still, unlike the purchasing of a foosball table or the organisation of a memorable office Christmas party, diversity is a practical outcome with enduring positive results that come with little (or no) cost. Here’s how one academic put it:
Diversity is appealing because it's forward-looking; it ascribes no guilt, calls for no arguments about compensation. It seems to ask simply for rational, unbigoted judgment: thoughtful professionals evaluating the whole person… in a quest to achieve an eminently legitimate, even uncontroversial, goal.
There can be little doubt that diversity does matter to individuals: research by PwC has shown that, among millennials, 86% of females and 74% of males consider employers’ policies on diversity, equality and inclusion when deciding which company to work for.
To understand why, it can help to consider what a lack of diversity can mean for those whom it may disadvantage. For example, among workers who belong to the LGBTQIA+ community, some 52% who are closeted, and 36% who are ‘out’, feel that their sexual/gender identity has caused a career plateau.
More broadly, a 2017 survey of employees in the Asia Pacific region found that—for various reasons—49% of those aged 18 to 29 ‘agreed’ or ‘strongly agreed’ that a lack of diversity posed a barrier to their career progression. They’ve good reason to worry about it too. For instance, if you’re a white male graduate starting out at a Fortune 500 company in 2018, and you look up the corporate ladder to see who’s at the top, there’s a 72% chance that you’ll see somebody who looks just like you. If you’re a black female, that figure drops to one percent.
Fortunately, when it comes to individual experiences, the benefits of increased workplace diversity are as unambiguous as the downsides of homogeneity. According to research conducted in 2017/2018 by the Diversity Council of Australia, individuals who work in inclusive teams are:
In plain terms, people who work in inclusive environments are happier, more productive, more enthusiastic, and more likely to stay in their jobs. Is it any wonder that three out of four Australians support their organisation taking action to create a workplace which is diverse and inclusive?
The benefits that accrue to more diverse businesses are cumulative and, to a certain extent, self-sustaining. Some researchers even talk about ‘the diversity dividend’: the phenomenon whereby increased diversity leads to various business gains.
For example, one study by Credit Suisse of the board membership at 3,000 major global organisations found that the presence of just one female director correlated with financial gains equivalent to a compound rate of 3.7 percent per year.
Similarly, in 2017, McKinsey found that companies in the top quartile of executive-board diversity were 21% more likely to financially outperform the industry medians. This relationship is consistent across industries: in the United States, for instance, every 10 percent increase in the racial and ethnic diversity on a company’s senior-executive team correlates with a 0.8 percent boost to earnings before interest and taxes (EBIT).
The results of such studies repeat across time and in different regions: in fact, it’s now possible to predict that an organization with a non-diverse executive team is 29% more likely to underperform its industry peers in terms of profitability.
This raises the question of what it is about diversity that leads to business success. There’s no one answer, but research suggests several explanations. For example, Australians who are employed within inclusive teams are five times more likely to provide excellent customer service, and three times more likely to make a conscious effort to work hard. The Harvard Business Review has also published evidence that increased diversity supports improved creativity. Finally, there’s the simple fact that, by purposefully aiming to create diverse teams, businesses position themselves to attract and recruit a broader range of individuals who feel encouraged to apply for employment. It’s common sense: cast a wider net, catch more fish.
We’ve seen how diversity benefits both individual businesses and the people they employ. However, there is also a huge amount of evidence that increasing diversity within the workplace can lead directly to desirable social outcomes.
First, however, a disclaimer: as noted by the OECD in a 2017 report on the implementation of gender parity initiatives, ‘parity in economic outcomes [related to diversity] (such as participation in the workforce or presence in leadership positions) is not necessarily a normative ideal, as it involves human beings making personal choices about the lives they lead. In other words, an ideal world isn’t necessarily one in which complete diversity is achieved if such an outcome infringes on individual autonomy. Nevertheless, it’s possible to calculate the hypothetical social benefits for a society in which unfettered workplace inclusion were an achievable goal.
For example, according to data presented by UN Women, the boost to the global economy if women play an identical role to men in labour markets would be equivalent to US $28 trillion. A “best in region” scenario—in which all countries match the rate of improvement of the fastest-improving country in their region—could add as much as $12 trillion to global GDP by 2025. That’s equivalent to the combined economies of Germany, Japan, and the United Kingdom.
Of course, the social benefits of increasing diversity are not only economic, nor is increased gender diversity their only cause. For instance, there appears to be a positive correlation between higher rates of workplace diversity and certain social markers, such as a reduced wage gap, higher average levels of education attainment, and even maternal mortality rates.
By now it should be clear that, whoever you are, you stand to benefit from living in a world where improved workplace diversity is supported and encouraged: it’s a world in which you’ll be happier yourself, living in a prosperous society, and able to achieve far more at work than would be possible with a less diverse range of colleagues.
The understanding that diversity benefits everybody is behind initiatives as varied as ‘HeForShe’, the United Nations program dedicated at rallying people of all backgrounds behind the cause of gender equality, and the diversity programs adopted by Australian organizations like the Commonwealth Bank and the Australian Federal Police.
As a graduate, you have the opportunity to take diversity into consideration when planning your career, and then advocate for it as an employee, whether that means taking a stand against unfair practices or lending support to initiatives that aim to boost workplace inclusivity. By doing so, you stand to achieve positive outcomes not only for yourself, but for your colleagues, your employers, and the wider world in which you live.
To learn more about workplace diversity, check out our article about equal opportunity in the workplace.