Why small businesses should invest in diversity

Take a quick look around your workplace. You may only employ a handful of people but do they all share the same gender or cultural background? Are they a similar age? If your answer is yes, you may be missing out on one of the key drivers of innovation for your business: diversity.

Diversity can make a big difference to the success of a small business. Whether it’s through your mix of employees, your preferred suppliers or even your choice of mentor or coach, a diversity of perspectives, experiences, genders, cultures and age helps prevent the same ideas from bouncing around and can create a better understanding of your customer base.

Different perspectives can also lead to a more thorough development of ideas. Diversity can spur creativity, boost productivity and give your business a competitive edge. The bottom line? It’s good for business.

Diversity delivers results

Diversity in small businesses fosters different ways of tackling an issue because each individual views it through the lens of a unique perspective and background.

Research shows how a mix of people in the workplace leads to tangible business results. A recent study from MIT economists found that shifting from an all-male or all-female workplace to one split evenly along gender lines could boost revenue by around 41 per cent.

Another study, published in Harvard Business Review, also found that businesses with multiple dimensions of diversity were significantly more innovative and enjoyed better market growth than less diverse businesses.

diversity delivers results for small business

“A workplace that values diversity and is inclusive is also more productive,” says Lisa Anesse, CEO of Diversity Council Australia. “This is because greater employee satisfaction leads to improved productivity and, therefore, profitability. Reduced employee turnover also cuts the cost of having to replace skilled and talented people. In addition, harnessing diverse skills and perspectives can increase creativity and innovation and can open up new opportunities.”

Research also shows that diversity can reduce absenteeism as mature-age employees and those with disability take fewer sick leave days and stay with the same employer for longer.

Bringing diversity to your business

To harness the benefits of various perspectives for your business, Anesse first recommends taking stock of your workplace to measure its degree of difference and inclusion. “Is there a mix of male and female employees?” she asks. “Are there people from diverse cultures or with a variety of ages? Is the workplace inclusive of LGBTIQ people?”

Anesse says the next step is to address any bias in recruitment, retention and pay that may be preventing any talent from joining or staying in your business. “Talent comes in many forms, so be open to employees from all sorts of backgrounds,” she says. “Culturally diverse employees in particular can offer language skills, knowledge of overseas markets, or international experience that may help you broaden your markets, either locally or overseas.”

You can also increase your workplace diversity by employing people with a range of family situations and providing the flexibility that they may require. Flexible working practices can boost productivity and profits, with research from the Australian Human Rights Commission showing lasting organisational and economic benefits for workplaces that have part-time and flexible arrangements in place. The Commission’s landmark report Supporting Working Parents, shows that companies that retain staff during pregnancy and parenthood report greater performance, have a better workplace culture, reputation and bottom line.

Businesses supporting employees through parenthood

It’s also important to consider your workplace culture. “Have zero tolerance for discrimination or any type of harassment,” says Anesse. “And have a look at your pay rates to make sure you are not unintentionally underpaying women.”

Broadening your focus

A diverse workplace can also help you to attract a broader range of people who see you as an equal-opportunity employer An organisation that represents its community through its workplace is a great advertisement for business.

If you only employ one or two people, you can still bring diversity and inclusion to your business through your supply chain. Innovation is often spurred by your business partners and suppliers who can bring different ideas, perspectives, backgrounds and experience to your business. Look beyond your usual supply chain for your procurement needs, for example, and consider inviting others to quote for your business, such as social enterprises or an Indigenous-owned businesses.

Diversity can reduce your chances of working in an environment where the same ideas are reinforced and applauded. It promotes innovation and creativity in businesses, both big and small.

Takeaways

Visit the following websites for more information about the benefits of workplace diversity:

Diversity Council Australia
Business.gov.au
Australian Human Rights Commission

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