Advantages and Disadvantages of Workplace Diversity

- By Donna Hamlin, Ph.D.

The push for diversity is on around the globe today. Company work groups, executive C-suites,
corporate boardrooms governments and regulators are calling for action: define policies and
deliver practices that get results.
Diversity Defined
Diversity generally means recognizing, accepting and appreciating the differences among
peoples differences in age, class, gender, ethnicity, physical and mental abilities, race, sexual
orientation, religious or spiritual orientation, and status relative to public assistance (Esty).
Advantages of Diversity: Why Does it Matter?
An early study found companies with highly diverse teams in research and development
laboratories produced higher numbers of commercial patents (noted by PARC Research Center).
The correlation implied diversity contributed to creativity and effectiveness in productive ways.
This caused managers professionals in organization development to experiment with composing
diverse teams to see if results improved.
They did. Results show diversity in work groups yields greater productivity, competitive
advantages and is a key component for effective people management (SHRM; Robinson).
Moreover, diverse executive teams and corporate boards produce higher returns on equity,
improved risk mitigation, higher return on sales, invested capital and corporate revenue results
(McKinsey; Leeds University; Catalyst).
The underlying notion is straightforward: if you put people together who come from many walks
of life and experiences to discuss a challenge, the richness of their perspectives will provide
more opportunities for creative ideation. Discussions are more whole and decisions are sounder.
Added to these operational advantages is the value diversity brings to innovation in our global

economy. The rate of innovation is on a steep incline (Estrin). To remain competitive,

organizations and nations must invest in ways to accelerate innovation. Diversity in teams can
contribute to higher quality and volume of innovation.
Many governments now recognize this and are creating legislative mandates to support diversity.
Solving such complex global issues as world hunger, environmental concerns, financial crises,
health care for aging populations requires a higher order of thinking. Government officers
anticipate diversity can contribute to quality solutions. New regulatory mandates are emerging.
US public companies must file in their proxy statements what their diversity policy is or explain
why they dont have one. Other countries have mandatory quotas for diversity. Norway requires
40% of board directors on public boards must be women. Malaysia recently mandated public
companies must have 30% women in both their executive roles and their boards. The intention is
to push for better results via diversity.
Disadvantages of Diversity: A Challenge
The potential advantages of diversity at work are compelling, however, they dont come without
thoughtful effort.
A company must have executives who can create a culture of respect and honor for differences
for colleagues. It must create practices and train managers to competently supervise diverse work
teams effectively. It must hire mature employees who are open to understanding and appreciating
the many ways people may think or approach topics. It must evaluate progress and consistently
improve over time. It must invest in leadership development to ensure managers have the skills
to manage diverse teams well.
Employees must learn to both understand and appreciate how to work with others who are
different from themselves. The critical factor for success of a diverse team is if its members truly
respect each other. This takes commitment by the team members to deepen their understanding
and to grow personally and professionally. It takes time to become proficient.
To do this well means a commitment and investment in training, hiring, coaching and corporate

communication and company culture development. A company must have the integrity and
financial ability to back its commitment with the budget to execute consistently and credibly.
A Valuable Investment
Based on results to date, the advantages of diversity clearly outweigh the disadvantages. As both
team development and leadership development strengthen within well-managed diverse groups,
overall company results improve. Those companies which take the challenge to heart have a
stronger likelihood to thrive for the long-term. In todays world, sustainable is smart business and
good for all.
References

www.JohnSeeleyBrown.com

Judy Estrin, Closing the Innovation Gap www.theinnovationgap.com

Donna Hamlin, Is Innovation the Solution for Corporate

Success? Helium.com 10/21/2011.

Esty, Katharine, Richard Griffin, and Marcie Schorr-Hirsh (1995). Workplace diversity. A
managers guide to solving problems and turning diversity into a competitive advantage.
Avon, MA: Adams Media Corporation.

Robinson, Kary-Siobhan. (2002). U.S. must focus on diversity or face decline in

competitiveness.

Roosevelt Thomas, R. Jr. (2001). Elements of a successful diversity process. The

American Institute for Managing Diversity. Available on the World Wide Web
athttp://www.aimd.org/articles/elements.html. Date visited, February 8, 2002.

Society for Human Resource Management. (1998). SHRM survey explores the best in
diversity practices. Fortune 500 firms outpace the competition with greater commitment

to diversity. The Society for Human Resource Management (SHRM). Available on the
World Wide Web at http://www.shrm.org/press/releases/980803.htm.

Focus Consultancy; Diversity and Innovation : www.ec.europa.eu

Adams, Gray and Nowland; Does Gender Matter in the Boardroom? Cited by www.leadwomen.com Leeds University Study Shows Diversity on Boards Cuts Risk by 20%, the
Times of London, cited by www.lead-women.com.

Catalyst Report: Diversity Improves Return on Equity; cited by www.lead-women.com

EU Considers Quotas for Women on Boards, The New York Times, 3/2/2012