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Verfasst von Raghda A.

The Impact of a Diverse Workforce on Business Performance

“Diversity” has become some sort of buzzword in today’s corporate environment, with businesses often being either praised for their diverse workforce or criticised for their lack of it. But, what actually constitutes a diverse workforce, and is it worth the effort of recruiters to pursue?

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So, What Is Diversity?

Diversity within the workplace is said to have been achieved when employees with similar and different backgrounds, including qualifications, linguistic abilities, religions, nationalities and genders, come together to form the workforce. The aim of striving towards diversity in the workplace can be attributed to the U.S.’ Civil Rights Act of 1964, which outlawed any form of employee discrimination based on identity when it comes to hiring, promoting, or firing for a role.

Fast-forward to today, and discrimination of any sort, even beyond the workplace, is frowned upon if not illegal. In fact, we have progressed as a society to not only embrace our differences but also use them to our mutual advantage, propelling us to success—and the workplace is no exception.

The nature of the 21st century as an era of shrinking distances owing to efficient advances has blurred the lines between once-apparent differences, making us surrounded by diversity. Seamless integration on every level is credited for success: a Chinese citizen orders a cup of Italian coffee in English whilst on a business trip in Germany. As our world becomes more interconnected, companies must decide if they want to follow suit in the quest for inclusion, or be left behind.

How Diversity Benefits Companies

1. Increases Profitability

Research has proven time and time again that diverse companies perform better, owing to an increase in productivity that consequently results in an increase in profit. One study found that high-ranking organisations in terms of gender diversity in their executive teams were 21% more likely to generate above-average profits when compared to their industry counterparts.

Racial and ethnic diversity also portrayed similar results with a linear relationship between their level of diversity and company earnings. This can be attributed to the fact that diversity brings along with it a broader scope of skills and knowledge, which can be applied to improve the ways that companies go about their business.

2. Heightens Innovation

The range of voices and backgrounds that diverse teams represent fosters the generation of new ideas. Employees can take inspiration from their experiences and collaborate with one another in discussions to develop new products, services, or ways of doing things.  Rosalind Hudnell, the director of Global Diversity and Inclusion at Intel stated that the company has “…a vast amount of diversity that comes into work every day to build technology that plays out around the world.” Diversity is especially important when driving innovation to survive in a global market, as competition is fierce and the turnover of ideas and their execution is rapid.

3. Attracts Great Talent

For a company to appeal to top talent, it needs to showcase its environment as an inclusive space that welcomes and celebrates diversity. Diversity and inclusion policies are deliberately designed to act as drivers for recruitment and retention, giving companies a winning chance in the global war for talent. This is something that is recognized by Deutsche Bank’s Global Head of Diversity, Eileen Taylor: “If you want to attract the best talent, you need to be reflective of the talent in that market…  Diverse teams and companies make better decisions.”

In an effort to diversify the talent pipeline and tap into a quality pool of candidates, organisations implement measures that include forging relationships with universities and recruiting employees to act as company ambassadors. Encouraging employees to represent the company as brand ambassadors is one of the ways that Firstbird’s employee referral program builds a great talent pool for companies to recruit from.

4. Fosters Cultural Understanding

Having a wider range of demographics within teams means greater awareness of cultural differences, which is essential when operating in today’s globalised world. Diverse teams make individuals question their biases, challenge any preconceived notions or stereotypes they may have, and broaden their horizons to a more interconnected world. The way business is done differs from one place to another. For example, whilst some cultures value the cultivation of a personal relationship when collaborating, others prefer a more formal and straightforward approach that separates work from play; this calls for a need for cultural literacy to avoid any misunderstandings.

Language barriers are commonly of concern when it comes to conducting business internationally, and for good reason. After all, language is how you communicate with all stakeholders, from suppliers to customers. Having fluent or native speakers of foreign languages onboard is always a benefit, and you can rest assured that messages will be relayed accurately.

A famous example of communication getting lost in translation is KFC’s “Finger lickin’ good” slogan being mistranslated into “Eat your fingers off” when the fast food chain first opened its doors in China—not the best look. Diversified teams means that more experienced eyes are on the case, thereby increasing cultural literacy, and thus benefiting the company.

Where Do We Stand Today?

LinkedIn’s 2020 report on diversity within the workforce – although showing a positive year over year growth – has brought to light the long way that organisations have yet to go to fulfil workplace diversity. On a global scale, it found that male employees outnumber females, and in the U.S, the top two most employed ethnicities are white and asian, with the others – including black and latino – trailing much further behind.

This narrative can be seen in other countries; for example, in the UK, although those from black, asian, and other minority ethnicities makeup over 20% of the country’s undergraduate students, they represent only 10% of entry-level employees within six months of graduation.

When looking at the Fortune 500 (the top 500 companies in the U.S), the statistics are disappointing. Although 2021 saw the highest number of women holding CEO positions, this equated to just 8% of the companies, highlighting the long way we have yet to go. A recent report also revealed that minorities make up a mere 17.5% of the Fortune 500 board seats—a percentage that the Alliance for Board Diversity would like to see improved.

Because credit ought to be given where it’s due, let’s take a look at a prime example of a company that took action to diversify its workforce: HP. With 58% minorities and 42% women, HP has one of the most diverse boards in its industry. This impressive accomplishment is no accident, as the company’s Head of Talent Acquisition stated that they “…wanted to deliberately create a diverse leadership, bringing in people with different backgrounds, education, and work experience”. This goes to show that an impressively-diverse workforce can be planned for and achieved through strategic talent acquisition.


There is no denying that employees are the make or break of organisations, so the responsibility of recruiting the right people is not one to be taken lightly. Hire those with a similar background and you run the risk of losing the spark that a diverse team ignites. Homogeneity flowing through the workplace can creep up as a decrease in profit and innovation when compared to more heterogeneous companies in the same industry, as well as a reduction in the quality of candidates and cultural awareness.

Achieving diversity is a common goal amongst many of today’s top companies, pushing them to reconsider their recruitment strategies and search for ways to increase their inclusivity. Firstbird’s whitepaper on the relationship between diversity and employee referrals delves into this topic, and shows how this recruitment strategy can help companies smash their diversity and inclusion goals.

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