22 Advantages and Disadvantages of Diversity in the Workplace

When people feel comfortable at work, they tend to be more productive. Over 40% of workers in the United States say that they love their work environment because of their co-workers. The issue is this: most people are comfortable when their co-workers come from similar backgrounds, socioeconomic circumstances, cultures, or ethnicities.

If someone is different, that becomes a scary situation for many people. When workers are fearful, they become less productive.

That would make it seem like a diverse workplace would be a bad thing, but it is the opposite which is true. Diverse teams are 35% more productive than non-diverse teams. Their revenue generation statistics are equally high. When a company focuses on diversity, they increase their chances of success.

Why is that the case? Some of the answers lie in the advantages and disadvantages of diversity in the workplace.

List of the Advantages of Diversity in the Workplace

1. Diversity at work improves productivity.
Even when co-workers find themselves in an uncomfortable situation at work because of a diverse environment, the very nature of having different perspectives available offsets the declines in productivity experienced. Teams which are racially diverse are 35% more productive than teams who stick to the same color of skin.

According to MIT, there are three elements of a successful team in every industry.

  • They are sensitive toward the needs of one another, even in awkward situations.
  • Each person on the team gives everyone else a roughly equal time to talk.
  • The teams include more women whenever possible.

2. People want to see workplaces that offer more diversity.
The statistic which gets talked about the most is this one: 43% of employees think their companies shouldn’t be more diverse. Let’s look at the other side of that statistic. A majority of workers in the United States want teams which are more diverse. Sharing the same space with similar people is viewed as boring and dull. When there aren’t experiences available which are new and interesting, then there is nothing to get excited about at work.

A lack of diversity can lead to higher levels of burnout, even on teams which prefer a lack of diversity.

3. Diversity in the workplace sets aside society’s bias toward hiring men.
Princeton and Harvard found that women are underrepresented in the American workplace by as much as 46%. Even on the smaller end of the scale, there should be 25% more women working. The institutions used blind auditions where managers didn’t know the gender of the person they would hire. When gender wasn’t known (only experience and education), more women were preferred than men.

That doesn’t mean the bias goes away overnight. Google’s workforce has been 70% male as recently as 2016. Only 1% of their workforce is African-American or Black, while just 2% of their tech staff identifies as being Hispanic.

4. Creativity is enhanced in diverse environments.
When a team comes from similar socioeconomic and educational backgrounds, their perspectives are going to be the same. That promotes higher levels of consistency (which is a good thing), but it also promotes a lack of creativity (which is a bad thing). People are creative because of their unique perspectives. Different minds are necessary to solve complex problems because multiple perspectives create the potential for more lucrative solutions.

75% of people already think that they’re not living up to their full creative potential, yet environments which promote creativity are more productive than those who do not. CEOs already say that creativity is the skill they value the most, yet it is often repressed because of the desire to minimize diversity.

5. Diverse teams earn more revenue than non-diverse teams.
Teams which are bilingual improve the budget because they’re able to communicate across borders more effectively. Having just one bilingual employee on the team will create a 10% surge in revenues from the work they do. This effort at diversity is one of the few which offers immediate benefits too. When more future customers have access to the products and services offered, then more sales begin happening.

When gender diversity becomes a point of emphasis, revenues surge also. On teams where men and women are equal, companies earn over 40% more revenue.

6. Diversity in the workplace helps companies begin growing.
Two-thirds of hiring managers say that a diversity initiative helped their company grow, creating new positions and opportunities for local workers. Almost 90% of hiring managers already believe that cross-border communication will improve their market share and revenue over time. 45% of hiring managers believe that recruiting is the best way to increase diversity, even above edicts from human resources of the C-Suite.

7. It creates a broader pool of talent from which to draw.
When diversity initiatives are in place, hiring managers are no longer hampered by various applicant criteria. Instead of worrying about educational experiences, age, geographic location, or other screening factors, human resources can focus on practical knowledge. The people who are best for the job receive the top priority because skills are the driver of success with diversity in the workplace, not the other less consequential factors.

8. There are more cross-training opportunities available with diversity in the workplace.
When you have a diverse team working for you, then each person brings a skill, talent, and perspective to the group which benefits everyone when managed correctly. Diverse teams are like sponges. Each person on the team learns and grows because of the vast array of perspectives offered. That process improves cultural understanding on a global level, fuels innovation for new products and services, while finding new ties to the common ground we all share.

9. Society benefits on several levels when encouraging diversity in the workplace.
When diversity is a point of emphasis on organizational teams, there are benefits which become possible to the national economy. Having more women working in the labor force would help to fill job shortages at the local, regional, national, and international level. A global emphasis on allowing women to work would reduce poverty almost immediately.

The same would occur if people with disabilities were hired and trained to fill open positions. The income structure of the economy would become more diversified, reducing risk exposure that likes to creep up after times of economic growth.

10. Task assignments have fewer variables.
When diverse teams are present in the workplace, individual workers can receive specific assignments based on their strengths and experience. There is no longer a guessing game played by managers as they attempt to develop their team. With several strong skill traits spread out amongst all individuals, the perfect leader for each project is more likely to be found internally, which means fewer job searches and new hires may be necessary.

Diversity in the Workplace Statistics

List of the Disadvantages of Diversity in the Workplace

1. It creates multiple layers of administrative management to juggle.
According to a 2016 survey conducted by SHRM, 43% of companies offer floating holidays which permit their employees to take time off because of their cultural or religious preferences. When managers were asked about the initiatives in place to encourage this diversity, 41% said that they were “too busy” to implement what their company was asking them to do.

The easiest way to resolve this disadvantage is to make the hiring process a team effort. Managers should be asked to do everything. Create a committee which can oversee the diversity initiatives. See how other companies are finding success, then be honest with your own situation.

2. Gender diversity is still nowhere near where it could be.
The emphasis on diversity includes other cultures and ethnicities. It does not include women. As of 2016, just 4.2% of the CEO positions in the 500 largest U.S. companies were held by women. There are more CEOs named David in that list than there are women working at the highest levels of business.

We must be willing to set aside society’s preconceived notions about gender differences to have workplaces that are truly diverse. Women are more likely to start businesses and earn more in their company while being less likely to seek financing opportunities.

3. It may create an initial surge in resignations.
People can become so uncomfortable in a diverse workplace that they decide to leave their job instead of following the initiative. Whether one calls such an action a “bias,” “racism,” or something worse, businesses are forced to cope with the costs of training new replacements for these lost workers. You gain an improvement in the workplace environment because prejudice is no longer permitted, but doing the right thing does come at a price. Smaller businesses could find themselves financially strapped if enough people leave.

4. Some companies see an increase in complaints when focusing on diversity.
Because you have several different people coming from unique backgrounds, a diverse workplace environment will create more conflict over time. Even different working styles can begin grating on the nerves of teammates. If this issue is not managed proactively, an increase in co-worker complaints may occur, leading to more administrative time on investigations than managing projects or contracts.

It is often left to the supervisor to manage these relationships. Since 70% of workers who quit their jobs do so because of their immediate manager, there must be an increased emphasis on hiring good people to fill critical roles for a diversity initiative to be successful.

5. Diversity programs are often left up to the CEO.
According to research published by Deloitte on diversity in the workplace, 38% of companies have the primary sponsor of an initiative begin with the Chief Executive Officer. CEOs see the improved cash flow per worker, higher revenues, and better financial picture as reasons to promote diversity even if they aren’t personally inclined to work in such an environment.

McKinsey reports that companies in the top 25% for gender diversity are 15% more likely to have above-average financial returns for their industry.

6. There can be communication barriers which make productivity more challenging.
People from different backgrounds and ethnicities may all speak the same language, but the words they use could have very different meanings. Here’s a simple example between the United States and the United Kingdom: “Pants.”

In the U.S., pants refer to trousers, slacks, or jeans. In the UK, it refers to underwear. Now imagine someone at work saying, “I don’t like to work wearing pants.”

Someone in the U.S. would respond by wondering if they preferred shorts, skirts, capris, or leggings. Someone in the UK would wonder why they don’t want to wear underwear and perhaps question the appropriateness of the comment. Teams must work hard to overcome these barriers, which is why companies focusing on diversity initiatives hire trainers to help prevent miscommunication.

7. Some workplaces become hostile during a diversity initiative.
There will always be people in the workplace who argue against a diversity initiative. The stresses they experience become open sores that eventually create outbursts of frustration from the affected party. Over time, if this issue is not addressed, the morale of the office will go down. People always have differing opinions on diversity. You will not appease everyone. If someone is resistant to this philosophy, then managers may wish to find a different position for them which limits their contact.

8. There is a trust decrease which occurs as diversity increases.
Robert Putnam and Peter Block researched diversity in communities and cultures over more than two decades. They paid close attention to a specific neighborhood where inclusion was always a top priority. They found that as diversity increased, the amount of trust in the community decreased.

The lack of trust wasn’t just between the different cultural, ethnic, or gender groups in the neighborhood being studied. Even people within the same cultural group were less likely to trust one another when diversity was a point of emphasis.

9. Workers in diverse environments often fear outsourcing and offshoring.
When training includes people from multiple backgrounds, cultures, and countries, the organization does have the option to open doors to new opportunities. Outside the developed world, the cost of labor is much lower. Even when comparing cultures where the Middle Class is rapidly growing, the labor difference for one employee can be over $40,000. Imagine being about to outsource 10 jobs with similar performance levels while saving $400k – that threat is what often leads to worker barriers when promoting diversity.

10. Discussions can slow projects down just as they can speed them up.
Having multiple opinions and perspectives makes it possible to find better solutions. That advantage is tremendous, and why many teams seek to diversify in the first place. There are times when the perspectives are so diverse, however, that it becomes more challenging to make a choice. When everyone on a team thinks or feels different about a specific subject, it is left to the manager to decide who is right or wrong.

And in that type of situation, the people who are not having their recommendations approved consistently will start to resent their situation. They may cease input altogether, which then means you’d miss a potential opportunity even with a diverse team.

11. Hyper-education within a society creates extreme results.
When the recession years of 2007-2009 hit the United States, people with extensive educational backgrounds struggled to find work. Individuals with doctorate degrees and decades of experience were forced into entry-level jobs. What society experienced in those years is what could potentially happen if diversity were taking to the extreme in the workplace. Societies with high education levels would have doctors driving cabs, immigrants doing the “unwanted” labor, and high levels of automation which would reduce the need for diversity in the first place.

12. Organizations may hire too many leaders.
When diversity is the point of emphasis for an organization, they look for the best people with the exact skill sets needed for the job. Hiring managers look for leaders who can take charge of situations, lead teams to success, and handle shifting priorities. When there are too many leaders on the same team, everyone wants to be in the alpha position. Instead of thinking up creative solutions for an organization problem, they look for ways to promote their own career. Without hiring protocols in place and vigorous enforcement of policies, you’ll find everyone trying to tell each person what to do. That leads to zero work being accomplished.

The advantages and disadvantages of diversity in the workplace are based on the commitment offered by each organization. It must start with the C-Suite before it filters its way down through the rest of the hierarchy. If the executives do not have a genuine interest in the creation and sustaining of a diverse environment, then the process is doomed to fail before it earns a chance to begin.

Blog Post Author Credentials
Louise Gaille is the author of this post. She received her B.A. in Economics from the University of Washington. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. If you have any suggestions on how to make this post better, then go here to contact our team.