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Understanding Workplace Diversity and its Benefits

Published October 27, 2022 (last updated on February 27, 2024) | Adam Wyatt - Content Writer


The latest data reveals Australia is becoming increasingly diverse. 3 in 10 Australians were born overseas. This diversity has now seeped into workplaces and there has been a need to highlight practices and systems which support and encourage workplace diversity. How are businesses responding to diversity in the workplace?

Below we have a snapshot of what diversity in the workplace entails, what are the benefits, the challenges, the types of diversity, and how can employers manage diversity.

What is diversity in the workplace?

Diversity in the workplace is the simple fact that a business consists of diverse individuals with different characteristics. Workplace diversity is when a workplace comprises of employees with varying characteristics such as sex, gender, race, ethnicity, or sexual orientation. In the modern and digital workplace, workplace diversity is a necessity rather than an afterthought or buzzword. Businesses are no longer restricted to their geographical limits and if they want to reach the world, then they must have a diversified workforce.

This diversity can appear in the form of culture, religion, gender, or age. It can be a shift in the workforce when there is a rapidly growing labour shortage and newer groups of employees are considering a return to the office.

Benefits of diversity in the workplace for employers

Research has shown that inclusive teams generally outperform their peers by 80% in team-based assessments. They were also 1.8 times more likely to be change-ready and 1.7 times more likely to be innovation leaders in their market. Workplace diversity is a serious competitive advantage.

  • Increased employee engagement- Employee engagement is usually an outcome of workplace diversity. The link is obvious- when employees feel included or respected, they are engaged and involved. Employees who believe their company is committed to workplace diversity, are 80 per cent more likely to believe they work in a high performing organisation.

  • Reduces employee turnover- Diversity causes all employees to feel accepted, included, and valued. When they feel accepted for who they are, they are happier in the workplace and stay longer. This results in companies with diversity having reduced employee turnover.

  • Wider talent pool to choose from- By refusing to restrict your perspective, you automatically create a wider talent pool to choose from. When your company is open to diverse backgrounds, it expands its horizons and options.

  • Variety of skill and talent-Diverse employees bring with them a variety of skill and talent.

  • Increased profits- Companies with more diverse top teams achieve greater profits. They make better decisions faster which gives them an advantage over others.

Challenges of diversity in the workplace

All these benefits do come with their own set of challenges.

  • Communication barriers- In a diverse workplace, you have people from different walks of life, and cultural upbringing. This can lead to communication barriers or differences in opinion.

  • Employee requirements- If your employees are from different cultures or age groups, they would also have different requirements.

  • Conflicting beliefs- Sometimes employees from diverse backgrounds can have polarising beliefs or opinions. This can be a challenge for managers.

  • Generational differences- Age diversity can be a challenge if you have employees from different generations working together.  

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Types of diversity

  • Cultural- Food, language, religion, customs, and traditions make up culture. Cultural diversity can allow your employees to learn from others and enhance their global knowledge.  

  • Religious- It is important to create a workplace that is accepting of different religions and welcomes these differences. This can happen in the form of offering floating holidays or allowing religious clothing for individuals who wish to pay respect to their heritage or religion.

  • Racial- Race is biologically determined. It is different than ethnicity, which is based on learned behaviours. Racial diversity demands sensitivity and empathy from managers and employers.

  • Age- Your workplace will always be age-diverse. At any given time, several generations will be employed in the workforce. With age-diversity it is important to remember to avoid stereotypes that can bias your employees. This bias can lead to ageism. 58 per cent of workers notice age bias when people enter the workforce in their 50s.

  • Gender- Gender roles are social constructs that are assigned to individuals at birth based on their biological sex. As we progress, people are moving to a spectrum of gender identities rather than get trapped in binaries of male or female. Employers should respect these individual choices and ensure the workplace is a safe space for all.

  • Disability- If you hire individuals with varying disabilities, it helps your team become diverse and inclusive. It also offers those individuals a chance to get back in the workforce and progress in their career.

How can you improve and promote workplace diversity in your business?

  • Recruit from a diverse talent pool- The first step in improving workplace diversity is to recruit from a diverse talent pool. Are you broadening your horizons? What kind of life experiences are you looking for? Are you willing to consider unconventional employees with the right attitude?

  • Have a diverse recruiting team- Unless you have a diverse recruiting team, you will have trouble paying attention to workplace diversity. They would know what to look out for and how to spot talent for your team.

  • Educate employees- Diversity and Inclusion initiatives are a good way to educate employees and improve sensitivity. If your employees understand what workplace diversity is, they would be more welcoming and appreciative of diverse employees and their perspectives.

How to manage diversity in the workplace?

  • Prioritise communication- Communication can solve the challenges that diversity may bring. Prioritise open, honest, and regular communication. Encourage employees to speak up and have open channels of conversation between teams. With diverse groups, its also best to be clear and specific.

  • Encourage employees to work in diverse groups- Sometimes employees can prefer working in their comfort zone. They may not want to work in diverse groups or with people they believe they may not understand. You should try to challenge their notion. Use workshops, team meetings or team activities to let employees mingle and get comfortable. You can also host social events or catch-ups to make diverse groups interact socially with each other.

  • Be open-minded– Employers should be open-minded. Diverse workplaces require a lot of effort and management, and it can feel stressful. Keeping an open mind means being open to change, being confident, and being calm when things get tricky. 

Want to understand workplace diversity?

Employsure has worked with 30,000 businesses across Australia and New Zealand, helping them with employment relations and workplace health and safety. We understand the challenges of running a business. If you want to understand your obligations or learn about policies that can support your workplace, call our 24/7 Advice line today.

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