How recruiting more difference can help you out-perform the rest

Diversity is a hot topic. There are numerous sound reasons why you should be aiming to create a more diverse workforce (and I’m not disputing any of them). What I haven’t seen up to now is compelling evidence as to the impact greater diversity can have on performance. But it does!

Scott Page’s 2007 Princeton study found that more diverse groups performed better than more homogenous ones in critical areas like problem-solving, conflict resolution and creativity – but only if they are well managed.

And an April 2009 study in American Sociological Review showed that diversity helped to increase sales and profit: companies with the most ethnically diverse workforces achieved nearly 15 times more sales revenue than those with the lowest levels of diversity. Sales revenue increased by between three and nine per cent for every percentage point increase in the rate of diversity amongst the workforce (up to the rate represented in the customer population).

The more diverse the workforce, the larger the customer base – companies with greater gender diversity in particular had more customers and higher average sales than the least diverse companies.

However, the very thing that leads to these performance gains also creates a problem – diverse teams are harder to manage and more prone to dysfunction because of the communication barriers inherent in a group of people with varying views and backgrounds (Polzer, Harvard Business Review, July 2008).

So clearly there are multiple benefits to seeking to recruit a more diverse workforce, but to reap the full benefit it will be important to support managers in how to handle more mixed groups and how to draw out the full potential of all the divergent views and experiences you have to tap into.

How we do that is a separate issue, but if you need more hard evidence or reasons to enrol more people in your efforts to increase diversity, use the above.