Table of contents
  1. Why is Company Diversity Important?
  2. What Are The Obstacles To Diversity?
  3. What Are The Types Of Diversity?
  4. How To Increase Your Company Diversity
  5. Conclusion

Company diversity refers to the mix of backgrounds, identities, and experiences in your workforce, as well as the equal treatment and opportunity granted to all individuals.

69% of executives recognize that diversity is important to business success, yet 61% of US employees have experienced or witnessed racism, ageism, gender, or LGBTQ+ discrimination in the workplace. As such, there is more scope for HR leaders to understand and implement programs that support diversity.

Why is Company Diversity Important?

Firstly, a diversity of backgrounds promotes a wider range of worldviews. This can lead to more creativity, informed decisions, and tolerance at work. It can also decrease business risk by avoiding groupthink, a phenomenon where collaborators tend to agree with each other, especially if they share similar backgrounds.

Secondly, fostering diversity keeps your organization aligned with societal changes. For example, a workforce with gender and ethnicity representation ratios that are similar to national or state averages more accurately reflects the modern complexities facing both customers and employees.

Thirdly, high business diversity correlates to 35% higher financial performance, 19% higher innovation revenue, and a 70% higher likelihood of capturing new markets than low-diversity teams. Reasons for this include the fact that diverse teams better understand market needs, multiple perspectives support innovative projects, and talent is of higher quality when sourced from a wider candidate pool.

What Are The Obstacles To Diversity?

Unconscious bias

Unconscious bias, a system of social stereotypes applied to a person or group without awareness, is a key obstacle to fostering diversity in your company. Perceiving male managers as assertive and female managers as bossy is an example of unconscious bias.

It negatively affects HR processes like recruitment and promotions, as talent can fall through the cracks if they’re unconsciously discriminated against. It can also diminish employee satisfaction and productivity in cases where unconscious bias leads to microaggressions and harassment between peers. 

Lack of integration with company strategy

When diversity programs are considered optional and mainly used to boost public relations, the result is delayed implementation and minimal progress. This is why it’s important to integrate your diversity strategy with your top-level business strategy. 

If you don’t research the root causes of diversity problems in your organization, set measurable targets and deadlines, and assign sufficient resources to deliver the program, your diversity initiative won’t be taken seriously by staff.

Lack of targeted action

Using a cookie-cutter approach to diversity and not personalizing solutions to your team can also result in missed opportunities. Different problem areas will require targeted actions.

For example, hiring external advisors to supply diversity training can help if your business is struggling with racial microaggressions or disagreements related to new diversity policies. However, diversity training won’t help fix a recruitment pipeline that only sources candidates from Ivy League schools. The latter may be solved by introducing blind screening and tapping into new sources of talent. 

What Are The Types Of Diversity?

There are many factors that can impact the diversity of your team. Here are some of the main types of diversity you should be aware of.

  • Gender identity: Having a 50-50 ratio of men and women across seniority levels is important to achieving gender equality in the workplace. In addition to this, you should increase access and equal opportunity for minority groups such as transgender and non-binary people. 
  • Ethnicity: Many states are ethnically diverse, and businesses should reflect this in their workforce. Ethnicities include Latinx, Black, Asian, White, Pacific Islander, and others.
  • Sexual orientation: People should be free to bring their full selves to work, regardless of their sexual orientation, which can include gay, lesbian, bisexual, asexual, and others. Archaic policies such as “Don’t ask, don’t tell” are discriminatory, as they don’t consider all sexual orientations to have equal rights. 
  • Disability status: Workplaces should be equipped to support the access needs of employees or candidates with disabilities, which can include vision impairment, being deaf or hard of hearing, physical disability, and neurodivergence.
  • Mental health: Business leaders should be aware of ongoing research around mental health and encourage sensitivity to conditions such as depression, anxiety, and PTSD, particularly in high-pressure scenarios.
  • Age: Open-mindedness about hiring different age groups can help balance skills and perspectives in your teams. Those changing careers later in life may start at entry-level, while promising graduates can be fast-tracked to management roles.
  • Religion: A religiously diverse team can be more tolerant and culturally aware, but this must be supported by policies that protect against forms of religious discrimination, such as Islamophobia.
  • Socioeconomic background: Talented individuals from less privileged socioeconomic backgrounds, including foster care, poorer ZIP codes, and families without higher education, may require alternative routes to employment, such as apprenticeships.
  • Education level: Higher education degrees such as Bachelor’s and Master’s can be indicative of accumulated knowledge, but employers should be open to a diversity of educational experiences. Many talented individuals cannot afford the costs and debt associated with a college education and could thrive via alternative onboarding policies.

How To Increase Your Company Diversity

Assess your recruitment and onboarding processes

Diversifying your team starts with hiring. By assessing recruitment and onboarding processes, you may find that the majority of job applicants come from a handful of colleges or that CVs with foreign-sounding names are rejected at a higher rate despite having relevant experience. Such findings can help initiate new policies that expand your talent pipeline.

Ineffective onboarding can hurt diversity if certain employee groups aren’t given the right support to pass their probation or are forced to resign due to working conditions. For example, basic access needs should be supported in practical ways, including wheelchair accessibility, learning difficulties including dyslexia, and gender-neutral bathrooms for gender-nonconforming people.

Take bias out of promotion

Many companies struggle to have proportional representation at the top levels of management. For example, white males occupy 86% of Fortune 500 CEO positions, despite a 35% share of the general US population. While promotion is a complex process of assessing skill sets, achievements, and peer interactions, it also has subjective elements that are prone to bias.

To ensure diverse talent is not overlooked for promotion, aim for a high degree of measurable assessment—such as points-based systems tracking desired achievements. Furthermore, qualitative peer reviews should be critically assessed for signs of bias, such as racial or gender stereotyping, before making promotion decisions. 

Set diversity targets

Setting ambitious—yet realistic—targets requires understanding your company’s specific diversity challenges. Create a task force to investigate the most relevant diversity areas, such as recruitment, promotion, peer-to-peer interactions, and others. 

If, for example, your workforce ratio of women to men is 50-50 at the entry-level and 30-70 at the director level, then your target could be to increase the promotion of women to senior roles.

Create meaningful change

You should first determine what meaningful change means to your workforce by using company-wide surveys and smaller focus groups. As leaders, be sure to actively listen and encourage honest discussions.

For example, one team may find donating a percentage of profits to a certain charity to be meaningful, while, for another, creating gender-neutral bathrooms in the workplace may be a top priority.

Track progress

Measuring progress against your diversity goals is essential to making a lasting change. Key statistics to track include the pay gap between different groups, such as between men and women, or between different ethnicities. 

You can also track if the ratios of different groups, including socioeconomic backgrounds and sexual orientations, are similar to the region’s average.

If your progress on diversity isn’t as quick as you’d like, find the root cause. It may be that managers aren’t on board with the diversity strategy, or program implementation is lagging.


Company diversity refers to the equal representation and opportunity granted to workforce groups across gender identity, ethnicity, sexual orientation, and more. Bringing diverse teams together not only enhances profits and innovation, it’s also a way to reflect the diversity of thought and experience in wider society. 

HR leaders should be aware of pitfalls including unconscious bias and lack of integration with the high-level strategy, which may delay the effects of a diversity strategy. To be successful in fostering diversity, you should assess your recruitment and promotion processes, set meaningful targets, and track your progress.