Why Diversity in the Workplace Matters

Diversity in the workplace isn’t a radical idea by any means, but it’s one that’s never been more vital or timely for businesses to take on board.

It’s imperative businesses put in the work to achieve diversity, not least because there are numerous benefits to be gained for both employers and employees working in a diverse and inclusive professional environment. We’ll explore what diversity is, why it matters and how you can gain the skills a leader needs to encourage it.

What is diversity?

Diversity in the workplace is the practice of including people with similarities and differences in age, gender, disability, ethnicity, religion, sexual orientation and more. Diversity doesn’t only refer to someone’s personal status but also to areas like lifestyle, values, working style and their role at work.

In Australia, all people have the right to employment opportunities and equal treatment at work. However, the reality is a little different and there is room for improvement.

The hiring processes and workplace cultures within many organisations mean modern workplaces are not as diverse as they should be.

It’s not just diversity that employers should be concerned with but inclusion as well. The push towards diversity and inclusion (D&I) is needed to ensure everyone feels incorporated in a business.

All employees should have a chance to work and thrive as equals. This means feeling valued, respected, empowered and included in organisational culture and leadership opportunities.

How diverse are today’s workplaces?

Employee experience platform Culture Amp released a 2024 report that highlights a need for greater diversity in workplaces globally. The organisation gathered data from more than 175,000 employees at 390 companies around the globe to compile a comprehensive report.

These were just a few of their most telling findings on the current state of D&I in the workplace:

• The percentage of organisations extending their D&I efforts past basic compliance fell from 71 per cent in 2021 to 60 per cent in 2023.
• The percentage of companies with a designated D&I leader decreased from 56 per cent to 41 per cent in the last two years.
• Human resource (HR) teams’ confidence that they’re creating a diverse and equitable culture at their organisations dropped by 8 per cent from 2021 to 2023.

Common challenges to workplace diversity

One of the biggest hurdles in achieving a diverse and inclusive workplace is an organisation that’s unwilling to change. This can occur because of outdated beliefs, a lack of information or those in senior and executive positions who don’t consider diversity in their workforce to be significant.

According to Culture Amp’s 2024 report, the lack of D&I expertise was the top challenge for HR teams in building workplace diversity. The percentage of companies hiring external D&I consultants dropped from 66 per cent in 2021 to 47 per cent in 2023. During the same period, support from senior leadership to enhance D&I efforts also fell from 74 per cent to 58 per cent.

The impact of COVID-19 on businesses also halted some of the progress toward D&I. As the world came to terms with the effects of the pandemic, efforts in diversity and inclusion took a back seat. However, as businesses are operating in a post-COVID-19 world, now is the perfect time to make D&I a priority.

5 benefits of embracing a diverse workforce

Having a diverse workplace isn’t just beneficial for the employees. Employee diversity has benefits for the business, its clients and consumers as well. Here are just a handful of the benefits that diversity in the workplace can achieve, with many more to be enjoyed.

• According to Culture Amp, businesses that provide a fair environment where individuals from all backgrounds have equal opportunities for success will have higher chances to attract a more diverse talent pool.
• Boston Consulting Group disclosed in a global report in 2023 that having a diverse senior leadership team allows employees to have a better sense of belonging, which can help retain talents and reduce staff turnover.
• A McKinsey & Company report revealed that organisations with diverse leadership teams continue to be linked with higher financial returns.
• Employees from diverse backgrounds can be better equipped to understand the needs and preferences of a wide-ranging customer base, allowing them to provide more personalised products and services.
• A diverse workforce will bring new ideas and talents to the table, giving your business a boost of creativity and capacity.

How leaders can make a change

To enjoy these benefits, a business and its leaders must be willing to put in the effort toward change. Most importantly, upskilling with an MBA that teaches you traditional business practices and new ones – including the importance of hiring and supporting a diverse workforce or creating a new company vision – is critical.

The best place to start in the workplace is by speaking to your staff to hear their thoughts and feelings on diversity and inclusion. From there, you’ll want to design a company vision incorporating D&I in its values and integrate this into your company’s policies and procedures.

Fostering a diverse leadership team is also essential. According to McKinsey & Company, diversity in leadership is strongly linked to higher employee satisfaction, bigger social impact and comprehensive growth ambitions.

These changes won’t happen overnight, however. You should have short-term and long-term goals that enable your business to meet this vision, which should be measurable and actionable.

Positive examples of D&I leadership

These businesses are implementing diversity in corporate culture in real time and embodying the future of work. Here are just a couple of global companies with examples of good leaders who have implemented solid D&I values:

• Ingka Group, the owner of IKEA, achieved 50/50 gender and pay equity across its entire business operations in 2023. According to Global People & Culture Manager, Ulrika Biesèrt, this has been a part of the organisation’s business goals for more than a decade and is a contributing factor to the company’s strong performance.
• Microsoft continues to demonstrate its D&I efforts with the release of its Diversity & Inclusion Report in 2024, which also marks the 11th year of publishing the demographic data of its workforce publicly. Chief Diversity Officer and Corporate Vice President of Talent and Learning, Lindsay-Rae McIntyre, expressed that Microsoft’s inclusive mission involves empowering every individual and company to achieve more.
• Beck Bailey, who is the global chief diversity officer of the multinational professional services company Accenture, communicated his belief in the strength of diverse experiences and outlooks in fueling innovation. In 2023, the organisation achieved a 100 per cent pay equity for women compared to men across the countries where they operate. The company is also committed to attaining a gender-balanced workforce by 2025.

How postgraduate studies can help

Universities in Australia also recognise the importance of having diversity in the workplace by integrating this into their postgraduate programs. For example, the University of New South Wales offers an online Master of Human Resource Management (Diversity, Equity and Inclusion) to develop graduates who can build a thriving work environment that allows employees of all backgrounds to feel empowered.

You can also find postgraduate courses that include a unit related to D&I. The University of Melbourne’s Master of Management (Human Resources) contains a Managing Diversity unit. By taking this unit, you will learn about anti-discrimination in all facets of employment and the benefits of workplace diversity.

The Master of Human Resource Management from Swinburne University of Technology offers the Managing Workplace Diversity and Inclusion unit. In this subject, you gain an understanding of how diversity and inclusion can elevate employee and organisational performance. You will also learn various methods for assessing the effectiveness of diversity and inclusion programs in companies.

Below are some postgraduate courses in Australia that contain a D&I unit.

Leading a diverse workplace

Promoting diversity and inclusion in the workplace is imperative for the employees and the business's performance. Leaders who embrace D&I actions will experience these benefits, but it sometimes takes a shift in thinking towards a more modern approach.

If you want the tools that will enable you to be a modern leader and advance your career, enrolling in a postgraduate business program can be a great place to start.