How Diversity Improves Business Performance and ROI

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Most people usually equate diversity to race, age, or gender, ignoring the less visible but equally important dimensions such as political beliefs or even communication style. The truth is that diversity comes in many shapes and sizes. Other attributes such as religion or sexual orientation are just as relevant and meaningful when it comes to defining true diversity.

The Diversity wheel, developed by Marilyn Loden, identifies the many aspects of diversity

The diversity wheel was developed to take these less visible secondary dimensions into account so that there exists a fuller, less narrow scope of what the term truly means. It maps out the three core diversity dimensions, which are the internal (visible), external (less visible), and organizational forms of differences.

Internal Dimensions

Internal dimensions are vital to our personal experience, have sustained influence in our lives, and are often our most visible characteristics. Many of these dimensions are traits we are born with and are what most people consider when trying to diversify their team.

The core dimensions include:

• Race • Faith/Beliefs/Values/Ideology • Age

• Diverse Ability & Mental Health • Sexual Orientation • Gender/Gender Identity

• Economic Background • National Origin & Birthplace

• Ethnicity & Heritage • Language Use & Native Tongue

External Dimensions

External dimensions are still important to our identity, but they are things we have greater control over such as your weight or relationship status.

The secondary dimensions include:

• Appearance & Body Type • Parental Status • Educational Background

• Family Influence & Life Experiences • Geographic Location • Citizenship Status

• Income & Economic Circumstances • Marital/Relationship Status

Organizational Dimensions

These dimensions contribute to our work experience and communication styles. They are useful identifiers for finding a good fit for a job and company culture.

The organizational dimensions include:

• Management Status • Division/Department/Unit/Group • Work Location

• Communication Style • Organizational & Union Affiliation • Seniority

• Work Content/Field • Functional & Work Expertise

To date, most companies have yet to embrace its core concepts fully. According to an SHRM report, the biggest reason companies can’t do it is that they’re “too busy,” with up to 41% of those surveyed saying so.

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In contrast, employees value diversity. Glassdoor recently reported that 57% of employees think their companies should be more diverse.

A diverse workforce goes beyond having a good reputation or legal compliance. It is a key advantage that has a positive impact on the bottom line.

ethnic diversity are 35% more

Historically, diversity efforts have focused on the core dimensions within the two inner circles of the diversity wheel, leaving out the other.

But to paraphrase what was mentioned on “The Future of Jobs Report” during the World Economic Forum, study after study have repeatedly demonstrated that workforce diversity brings significant business benefits. We must start to implement fundamental changes in how diversity issues are perceived and in how to tackle well-known barriers.

It is only a matter of time until an authentically diverse human capital, one that is based on all three circles, becomes a fundamental part of a company’s balance sheet and P&L.

A pipe dream, perhaps, but as long as we continue to demonstrate that businesses can benefit financially through diversity, these efforts will go a long way toward squaring that circle.

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