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The Distinct Advantages of Diverse Teams

By Nicole Sahin, Founder and CEO of Globalization Partners

Those of us who have worked in an environment where team members of different ethnicities, backgrounds, beliefs, and gender can share their viewpoints, skills, and experiences understand the positive influence of diversity on the wider organisation. Whether it’s building a healthy modern workplace culture, improving recruitment and retention rates, or boosting the bottom line, diversity must become part of organisational DNA in order to take its rightful place in 21st-century commerce.

Last year, the World Economic Forum argued that the “business case for diversity in the workplace is now overwhelming.” The most innovative and prosperous cities in the world, it said, had one thing in common – they are “all international melting pots with a high concentration of immigrants.” From New York and Dubai to London and Singapore, diversity helps foster organisations that are resilient, effective, and “outperform organisations that do not invest in diversity.”

But the pursuit of workplace diversity is highly nuanced and requires attention to detail. Above all, it’s a leadership issue – a BCG Henderson Institute study linked the diversity of management teams to greater innovation revenue, for example. It went on to say that diversity has an even greater impact when it flourishes in the context of fair employment practices, open communication, and a strategic emphasis on diversity led by the CEO.

Diversity Dividends

On an individual level, people committed to personal growth and development often report on the benefits of working within a diverse team. And it completely makes sense – working with people who are different from you challenges narrow thinking, offers broader perspectives, and can radically change outcomes for the better.

There’s also growing evidence to show that job candidates today are looking for diversity when searching for a role. A PwC report, for instance, found that 85% of female millennials said employer policy on diversity and workforce inclusion was important when deciding whether or not to work for an employer. Organisations that fail to live and breathe the values that deliver diversity will increasingly impair their own ability to recruit top talent.

In addition, diversity plays a major role in how employees feel about their workplace, most notably in relation to feelings of inclusion, happiness, and trust in leadership. Indeed, according to Globalization Partners’ 2020 Global Employee Survey, more diverse cultures, and those that embrace people with multiple language skills, see better team results. Ninety per cent of the global employees who describe their companies as diverse report higher levels of happiness, inclusion, and trust. In diverse companies, 78% say they trust leadership versus only 45% in non-diverse companies.

Local diversity can improve international effectiveness

Embracing diversity can be strongly dependent on company mindset and a willingness to broaden corporate experience. Companies that expand into new territories for the first time, for example, often learn very quickly about the benefits of working with culturally diverse teams.

By hiring local people on the ground in various countries, organisations are able to operate more easily across global markets or improve cooperation with international partners and suppliers. While the idea of hiring in a new country can seem overwhelming at first, an Employer of Record (EOR) like Globalization Partners can help navigate the complexities. Many businesses quickly realise that adding diversity by recruiting local talent in-market is by far the best way to do business across borders.

However, one of the most significant issues facing businesses with cross-border teams is that hiring a culturally diverse workforce does not automatically make them culturally ‘whole’. Hiring culturally diverse talent on its own isn’t enough. In fact, our own research has found that employees who said they work for diverse companies were more likely (38% vs. 29%) to say their employers often struggle to align with and show sensitivity towards local cultures than employees who worked for non-diverse companies.

This perhaps explains why 90% of employees from diverse companies think their employers would benefit from regular assistance from third party experts across issues such as local and regional culture, hiring, and accounting practices. While nearly a third said their companies already engage with such experts, even in non-diverse companies, three-quarters of those asked acknowledged the need for such guidance.

Without addressing these issues, the opportunities and advantages of building a culturally diverse workforce can be lost. Businesses should always work closely with their teams to manage the increased complexities of cultural diversity. They should also commit to regular internal research to understand the varied experiences of people across their teams. This helps to build a long term commitment to workplace diversity based on a genuine connection between leadership and employees.