Diversity promotes success. Here’s why it should matter to you

An woman of Asian appearance and a man with brown skin wearing a brown shirt work side-by-side on laptops.

I came to Australia as a 12-year-old refugee from Vietnam. I was grateful for a new life but I didn’t speak the English language and I didn’t understand my new country.

There were lots of unwanted racist remarks on the streets or in shops. Comments like ‘go back home’ were especially hard to take because I knew how risky it was for my family and many Vietnamese refugees to search for freedom.

When I got to the workplace it was different. You could feel the same biases, but you couldn’t quantify it. It’s a vibe.

But among the bad experiences were positive lessons from teachers and some bosses. They supported my work efforts and gave me opportunities to shine.

Reflecting on my 25-plus years across the corporate, not-for-profit and government sectors, the best performing teams I worked in were in organisations that valued and invested in diversity.

And investing in diversity and inclusion is a business, social and cultural imperative.

Embracing workforce diversity to build and lead better teams

You’ve probably seen studies and reports that highlight the benefits of employing diverse teams. But this also extends to diverse leadership.

The most diverse companies and businesses are more likely to outperform less diverse peers on profitability and output. A 2019 McKinsey report How inclusion matters found that top-quartile companies outperformed those in the fourth quartile by 36% in profitability.

Additionally, a study by the Boston Consulting Group shows that companies that have more diverse management teams have 19% higher revenue due to innovation. These findings are huge for tech companies, startups, and industries where innovation is the key to growth. It shows that diversity is not just a metric to be strived for but an integral part of a successful revenue-generating business.

It’s a good call for businesses and, ethically, it is the right thing to do.

Diversity is critical for business recovery and resilience

At the Victorian Multicultural Commission (VMC), I’ve seen firsthand that diversity is a critical asset when responding to a crisis.

Throughout the COVID‑19 pandemic, I’ve seen diverse leaders and teams produce better decisions and outcomes that benefit all. For example, by understanding some of the concerns raised by culturally and linguistically diverse (CALD) communities in accessing grants programs and making a concerted effort to work alongside communities to break down those barriers so they can access the support they need. This allows them to gain trust with communities more easily.

The teams with greater diversity have been more effective in providing advice, more responsive in their program delivery and more flexible in the way they work to adapt to an ever-changing and fast-evolving pandemic.

These benefits are no different to the corporate sector, where diversity is critical for business recovery, resilience and innovation.

Diversity promotes growth and prosperity

The McKinsey 2020 report Diversity Still Matters argues that companies that pull back on diversity and inclusion initiatives may be placing themselves at a disadvantage. They could face backlash from customers and talent and, down the line, fail to best position themselves for growth and renewal.

While some sectors have improved their workforce diversity in recent years, the COVID‑19 crisis has made some jobs vulnerable, and diverse talent may be at risk. I worry about job losses in the private sector, where low-skilled, low-paying jobs in retail, leisure, and hospitality may be hard hit.

Businesses should seize this moment to forge a new commitment to diversity and inclusion. You can implement, review and revise diverse and inclusive recruitment, promotion and retention practices with relatively minimal resources.

Collecting data for continuity and survival

One thing that I cannot emphasise enough is that businesses could do more to collect meaningful demographic and cultural diversity data. Data is important for businesses to measure, monitor and retain diverse talent. Collecting data also reduces any reputational risk that might say the business doesn’t reflect on its cultural diversity.

The VMC is currently undertaking a similar initiative with the Commissioner for Gender Equality in the Public Sector. If you’re looking for advice on how to effectively reflect on workplace diversity data as a business, I recommend looking at the Diversity Council’s Counting Culture guide.

What else can I do?

Getting diversity right takes bold leadership and commitment. It can be hard but it is achievable and necessary. Here are some tips you can use to get it right.

Systems and accountability

Cultural diversity is everyone’s business, but responsibility in a business ultimately lies with leaders and managers. Change doesn’t happen overnight, and positive change requires bold decisions and initiatives. One way to take a positive step forward could be to use meaningful data to set evidence-based targets and direct resources to achieve them.

Foster belonging and culture

Leaders should build cultures where all employees feel they can be themselves at work. Inclusion and empathy are key to transforming a workplace into one where employees feel they belong, have purpose and where their lived experience contributes to business decisions. This way employees can participate to their fullest potential.

Lead by example

Focusing on retaining culturally diverse employees and building an inclusive workplace culture is a great start. Businesses should also focus on advancing diverse talents into leadership positions. Diversity should be reflected throughout the organisation – from entry-level all the way to representation in top management and on boards.

Businesses leading the way in workplace diversity

If you are or know of a business that excels at promoting workforce diversity and inclusion, you can nominate it for a Multicultural Award for Excellence in Business. The Award is proudly sponsored by Environment Protection Authority Victoria.

Find out more about the Awards on the Victorian Multicultural Commission website.