Why do we need diversity?  Why must organizations include people of different races, ages, genders, religions, cultures, and economic backgrounds?  Recent research might surprise you as it states diverse groups of people are more effective than homogeneous groups in a professional environment. That’s right, it’s not just about political correctness or encouraging equality; it’s about doing what is best for your business

One of the most widely studied reasons why diversity is essential is communication. Communication is vital in all organizations as it allows sharing ideas and problem-solving. However, people’s communication styles, the words they use, their body language, whether they talk a lot or very little, are influenced by the culture they hail from.

Read on to explore further reasons why inclusion and diversity are a necessity for every organization:

1. You will be more successful

Studies have shown that diverse groups often outperform homogeneous groups. This is probably because people from different backgrounds bring different perspectives and ideas, which leads to better and improved decisions. According to Scott E. Page, a political science professor at the University of Michigan, we see this in international politics all the time, when citizens vote for politicians with particular backgrounds. People want their politicians to understand what it is like to walk a mile in their shoes, so they prefer to vote for representatives who can relate to multiple communities among the general public and bring various perspectives to the table when making important decisions.

2. Diversity fosters innovation

Innovation is another benefit of diversity. Steve Jobs famously said, “Creativity is just connecting things,” which roughly translates to innovation and creation are dependent on connection and relatability. Diversity and inclusion improve business results positively because they lead to unique perspectives and ideas you may not have obtained otherwise. Diversity is creativity’s best friend. Diversity is also crucial because it prevents people from getting stuck with an outdated stance, stifling innovation.

3. Diversity helps you make better decisions

A study in the book “The Difference” by Scott E. Page published in 2007 found that teams of people with different backgrounds outperform homogeneous groups on complex assignments. This is because diverse groups are more likely to consist of multiple subject matter experts on various subjects, granting the company access to a wide range of information and experience. As a result, the provided product and services can be fine-tuned to target an intended audience. 

4. You’ll have better customer service

Many studies show that diverse companies provide better customer service because they can communicate with more customers. For example, according to a study done by the University of Wisconsin-Milwaukee, “there is strong evidence that gays and lesbians are positively correlated with superior customer service.”

5. You’ll have more customers

A report published by the Credit Suisse Research Institute shows that a diverse company attracts a more extensive customer base and can expand into new markets more easily.

6. You’ll have lower turnover rates

Diverse companies tend to have happier employees, which leads to lower turnover rates. That’s good news for employers because it saves them money recruiting and training new hires.

7. Your employees will be more creative

Inclusion and diversity make people feel like they are part of a bigger picture and can contribute to an organization’s success, leading to higher job satisfaction. Being surrounded by people who think the same way can be tedious. Someone who feels respected, listened to, valued, and is exposed to new ideas will put more effort into their job, which will lead to more creativity.

8. Your employees will be more engaged

Sometimes referred to as “the new bottom line,” engagement is the degree to which individuals are psychologically present in their work and enthusiastic about their role, according to Gallup’s 2013 State of the American Workplace Report. When employees are engaged, they care about results and do their best to achieve them, which leads to better business results.

9. Diversity helps you weather tough times

A study by the University of Warwick has shown that companies with women in senior management are better at surviving recessions because they cut down on risky investments.

10. You’ll make more money

A study published in the Academy of Management Journal found that companies with women on their corporate boards outperformed those without. According to the study, the market returns for companies with women on their boards are 65 percent greater than those without. The median returns over six years are even more dramatic, at 149 percent higher for companies with women on their boards.

11. You’ll get a higher return on Investment

A study by Catalyst shows that women bring better returns to their companies. For every one percent increase in the representation of female board directors, there was an associated 0.4 percent increase in return on equity. However, the Catalyst study also notes that this relationship between gender diversity and financial performance is evident only “in some contexts.”

12. Women are more likely to bring in revenue

A study by the Federal Reserve Bank of Minneapolis found that female-owned businesses are more likely to positively impact job availability in their communities. Also, the study found that ethnic-minority business owners are perfect for local economies because they hire people from their communities.

14. You’ll learn about different perspectives

In the book think like a Freak, Stephen Dubner and Steven Levitt write that as your knowledge increases, the number of views you have access to increases. Ultimately, companies with a variety of perspectives have the potential to create better products, increase profits, and outperform their competitors because they can see things others can’t.

15. You’ll reduce your legal risk

A Center for Talent Innovation study found that companies with women on their boards are more likely to have processes to promote equal opportunity and zero tolerance of discrimination. That means there’s less risk involved when it comes to hiring women. In addition, companies with more women in senior management relatively experience fewer employment claims.


Inclusion and diversity are as necessary as talent, strategy, leadership, vision, and financial management. In essence, they keep your organization from becoming irrelevant and outdated. Unfortunately, organizations with a highly homogeneous workforce lag behind, as they miss out on the talent offered by nearly half the population.

Diversity is vital for business. To stay competitive and relevant, organizations must have a workforce that includes different genders, ethnicities, and experiences and focus on the culture and wellbeing of employees just as much as the profits they bring in. 

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