In an increasingly globalized world, populations get more and more diverse. Unfortunately, many companies have yet to embrace diversity within their ranks fully. Organizations with higher levels of diversity do have advantages. These are some of the top benefits of organizations that diversify leadership.
Better Identification with the Customer Base
Especially in the US, the demographics for the population have experienced significant shifts in the last few decades. For many companies, the customer base is no longer just middle-aged, white men. Instead, organizations need to be able to capture the attention of a very diverse population genuinely. To do this well, organizations need diverse leaders that can bring extensive knowledge of a target group, can relate to a changing customer base and have ideas to target products. Allowing for diversity within the organization helps companies approach diversity with its products.
The bottom line for any company is profits, and having leadership diversity increases returns for organizations. One report finds that organizations with higher amounts of ethnic or gender diversity in the workplace make more money. Including more women and adding ethnic diversity to a firm’s senior management and corporate boards can increase the returns for a company. As more people with different life experiences move into these leadership positions, they can infuse the organization with new ideas to increase profits.
Increased Employee Retention
Employment settings in which workers can see a few others who look like them pose serious problems for employee retention. Employees can feel as if they are a token diversity hire and not fully respected within the organization. This can lead to a culture that does not fully respect or incorporate the hiring or promotion of diverse candidates. When everyday workers see diverse leaders, it can act as a cue to their value and respect at the company. These leaders can also act as mentors to lower-level staff to help them move up in the company.
Having diverse leadership improves company performance and helps organizations show the value of their employees. A diverse workforce can have lots of benefits for employers and employees. By accepting the different life experiences and unique perspectives, people of diverse backgrounds have, organizations can build a brand that incorporates these ideas and benefits everyone.