The benefits of diversity in leadership and why it's important

Diversity is an important topic in today’s world. When most people think about diversity in the workplace, they mainly consider ensuring diversity in their entry- and mid-level roles. However, it’s important to make sure that you also have good diversity in the leadership of your organisation. In fact, research shows that 85% of company executives are white, and 77% are male, suggesting there’s a long way to go in terms of diversity.

So, why is diversity important in leadership? Read on to find out how it can help your business, and how to promote diversity and inclusion in the workplace.

What is diversity in leadership?

To fully understand the importance of diversity in leadership, we first need to look at what diversity is. Generally, diversity means having people from different backgrounds represented in a group. This includes representing a diverse range of people across gender, age, race, sexual orientation, economic background, ability/disability and religion.

While a lot of companies are ensuring better diversity in terms of their general makeup, diversity is less well-represented at higher levels. This is particularly true at the management, executive, and CEO levels. In fact, in lower levels and support staff roles, roughly 47% are non-male, while only 29% of people in executive and senior management roles are non-male.

Having diversity in the workplace is good, but it’s vital for diversity to also be present at higher levels. This is where decisions are made and where the company’s direction is decided.

Importance of diversity in leadership

There are many reasons why diversity is so important at these higher levels. While some people might see diversity as a box-ticking exercise, there are actually several reasons to have a wide range of people in positions of power. People from different walks of life will have different life experiences and skills, which can benefit your business in a wide number of ways. Having people who see things differently is essential when facing problems or finding opportunities. As well as this, people from varied backgrounds will be able to relate to employees and clients in new ways, helping foster great relationships and create a positive workplace culture. Plus, investors will want to see businesses with diverse staff all the way up to executive levels.

5 benefits of diversity in leadership

Wondering how exactly diversity can improve your organisation? Some of the top ways that diversity is essential:

1. Diverse leadership attract new talent

Potential new employees want to see themselves represented at the top. Seeing someone with a similar background to you in a position of power exemplifies that there’s a definite possibility of advancement in your organisation. This helps attract new talent from all walks of life, making sure that you get the best person for the job, and the best person to help your company thrive.

2. Diversity in leadership can boost profitability

Having a diverse and varied leadership helps your company see new opportunities and identify how to steer the company towards success. In fact, research shows that companies in the top quartile for gender diversity in executive positions have a huge 21% likelihood of generating higher profits compared to other companies. On the other hand, companies in the lowest quartile for gender and ethnic diversity are 29% more likely to have lower than average profitability. This is a huge difference and shows how diversity is vital for ensuring good profits.

3. Diversity in leadership can reduce turnover

More diverse leadership means that more higher-ups will relate to the struggles and difficulties of different sectors in your workforce. This, in turn, leads to better support and workplace culture for all your employees. Improved employee conditions can help with workplace satisfaction, reduce turnover, and retain highly-skilled employees.

4. Having diverse leaders fuels productivity

Productivity is key to making the most of your employees. With diversity comes a wider set of skills and new ideas, all of which can help boost productivity. Innovation and out-of-the-box thinking are natural effects of having varied leadership in your organisation, which also help avoid stagnation. Don’t be afraid to shake up how things are done in your company when your new employees have new ideas. Change is very often positive and necessary to keep productivity and output in the right direction. Statistics from What To Become suggest that companies with high racial diversity have 15 times more revenue and sales, which is a huge reason to diversify.

5. Diverse leadership improves and builds representation and trust

If people see a diverse range of employees at the top of your company, they’re more likely to trust and relate to the leadership. This is great for building relationships with employees, partners, and clients. This is a huge competitive advantage against companies with more homogenous leadership. Plus, diverse leadership can make sure you are reaching out to these people in the best way.

How to increase diversity in leadership

Now that we’ve gone over the benefits of diversity, the next step is to make sure that your organisation has enough diversity in its leadership to see these improvements. There are plenty of ways to improve your diversity, including:

1. Establish leadership diversity in your strategy

Studies show that only around 19% of organisations say they intend to introduce diverse management and leadership as a strategy going forward. Implementing this as a strategy helps focus everyone in your organisation on making sure that diversity is met and used well. As ever, this strategy should be measurable, with a specific goal, a timeframe, and a way to gauge your success. Of course, do not try to fix diversity overnight. A good strategy will account for how long this kind of advancement will take, ensuring that you get the best people for the job as well as making sure that diversity is represented appropriately.

2. Provide diversity training for leadership roles

Diversity is still a relatively new idea and not everyone will have had the chance to work towards these leadership roles. That’s why diversity training is so important, making sure that people who can bring positive change to your organisation have that opportunity in leadership. This helps work against historical bias and make sure that no one is disadvantaged by their life circumstances. Not only is this important to create a great, varied leadership team but it also makes your diverse employees feel more valued, and it can be great for positive employer branding.

3. Diversify your talent acquisition process

Of course, if you want to get a diverse range of people coming into your company, you need to look at your talent acquisition and hiring processes. This can be done by setting goals, having additional training, and looking at your hiring criteria to make sure that no potential talent is excluded automatically. Bear in mind that lots of people from different walks of life might not have had the same opportunities that some of your other potential employees, so take this into account and changing criteria is important. You can also improve your talent acquisition process for more diverse hires by making sure that your acquisition team is also diversely represented. This will create a hiring team that is able to judge everyone for leadership roles without letting bias slip into the process.

4. Create a culture of inclusion and diversity

Of course, strategy, training opportunities, and unbiased acquisition processes won’t help you achieve diverse leadership if no potential employees want to work for your company. Creating a culture of diversity and inclusion will make sure that people are attracted to your company for all the right reasons. One way to get this message out is with impactful diversity & inclusion storytelling, such as through user-generated video content. This kind of storytelling is important because it shows the actual members of your company talking about their experiences and how they see the culture in your workplace.  Many potential employees will trust these messages compared to company-branded messaging from a PR team. Letting people see inside your company from the viewpoint of your diverse workforce can do wonders.

Diversity is not just a buzzword, and it shouldn’t be treated as such. Ensuring your workplace has high diversity in leadership can have huge benefits across the board in terms of profits, employee satisfaction, and relationships with clients or partners.

A wide range of factors need to be considered, including gender, ethnicity, and age. There’s no such thing as having a leadership team that’s too diverse. Bear in mind that diversity does not happen overnight or without any effort — make sure that you are implementing strategies to encourage diversity. This can range from training for leadership roles, to strategy goals, to user-generated content from your employees that shows how your workplace is a great option for high-quality and diverse talent.