Diversity has grown to encompass far more than just gender, race, and ethnicity. In the world of business, diverse workplaces are comprised of employees with a wide range of characteristics and backgrounds that include gender, race, and ethnicity, but also religious and political beliefs, education, socioeconomic background, sexual orientation, and geographic location, to name a few. Companies are discovering that by supporting and promoting a diverse workplace, they are gaining other benefits beyond social equality.
Vijay Eswaran, Executive Chairman of QI Group, is a strong proponent of diversity in the workplace. He is quick to point out that even at the executive level, diversity is deeply rooted in the culture of his organization: “At my own company, the QI Group, our managing board is composed of 13 directors of 7 different nationalities, and I have always considered this diversity to be at the core of our success [because] the cohabitation of people of different ethnicities, from different places, with different experiences in cities and societies, is a key driver of innovation.”
Eswaran is a Malaysian entrepreneur, philanthropist, international speaker, and author. His most recent book, published in 2016, is entitled “Two Minutes from the Abyss: 11 Pillars of Life Management.” He is the founder and executive chairman of the QI Group of Companies, a multinational conglomerate with headquarters in Hong Kong and Kuala Lumpur. The QI Group operates in more than 30 countries worldwide. In 2005, Eswaran founded the RYTHM and Vijayaratnam Foundations to promote community development, women’s empowerment, and support for children with special needs in Africa, Asia, and the Middle East. He also established the Quest International University Perak (QIUP) in 2011, which has become one of the fastest growing universities in Malaysia.
As diversity becomes more common in the workplace, companies are discovering the many benefits and opportunities that come with it. Diversity can bring new ideas and different perspectives to the workplace. The Journal of Small Business Management compiled research that illustrated that employers who recruit a diverse workforce are able to capitalize on innovation generated by new ideas. Businesses are able to incorporate these various opinions into the way they make decisions about how to start, run, and finance their operations and market their products or services.
— Vijay Eswaran (@VjayEswaran) November 22, 2018
Eswaran has noticed that diverse societies benefit from the same effect because they encourage unique collaborations and chance encounters. He says that “it is high time we argued that diversity is also an extraordinary economic opportunity that brings success and prosperity to all of us.” A recent study by U.S. economists Enrico Berkes and Ruben Gaetani confirmed this notion by highlighting the way that dense, diverse cities produce far more “unconventional innovations” than suburban environments.
So, why are companies worldwide still lacking in diversity? According to Eswaran, some of the problem stems from society. The United States, the United Kingdom, and the European Union, who are supposed to be the shining examples of enlightenment and modern liberal values, are falling short in diversification. Increasingly, we see western liberal democracies targeting migrants and blaming them for the challenges their societies are facing. What is worse is that politicians have begun turning that anti-diversity sentiment into anti-diversity policies. With all of the research and evidence supporting diversity, it makes you wonder why they would reject the concept. The reason is simpler than you think. These policies are driven by a powerful emotion: fear. This fear manifests in many different ways. The most common fear is fear of change. When immigrants begin arriving in established neighborhoods, they are looked at with suspicion, and anything visibly different than what is considered the social norm is often vilified. The perceived competition for jobs and resources can be another major fear that restricts diversity.
These social barriers to diversity inevitably find their way into the workplace. Time and time again, companies make the mistake of neglecting to practice diversity in correspondence with their organizational goals. When this happens, it doesn’t matter how good a company’s intentions may be. At some point, lack of innovation, lack of customer satisfaction, and missed opportunities will slowly undermine the organization’s performance. Another common problem affecting the promotion of diversity is the disconnect between diversity policies and how the policies are implemented. In other words, too many companies do not practice what they preach.
Like many companies around the world, the QI Group puts a premium on promoting diversity in the workplace. Though it is nice to be ethical in your business practices, why should a for-profit company divert resources to ideas, methods, and processes that could potentially make it more difficult to turn a profit? The truth is surprising and a bit counterintuitive. The great news is that the data supports a win-win for business and society. Essentially, by making an investment in your most valuable resource – people – you promote a more innovative, efficient, and productive organization that pays back in spades. Let’s take a look at some of the many ways that the QI Group and the business community at large are profiting from diverse workplaces.
A recent Harvard Business Review article identified and highlighted companies with business leaders who possessed at least three inherent diversity traits and three that they acquired from experience. The article identified this as “two-dimensional diversity.” The authors recognize that experiences like “working in another country can help you appreciate cultural differences… while selling to female consumers can give you gender smarts.” The research conducted for the article determined that the firms with two-dimensional diversity performed better in business. The authors correlated “diversity in leadership with market outcomes as reported by respondents [and] learned that companies with two-dimensional diversity out-innovate and outperform others.” Diversity is a very powerful driver of innovation and can give any company the advantage necessary to stay ahead of the competition, which the business community is finally beginning to understand.
Creativity goes hand in hand with innovation, and groups that include employees from a variety of different backgrounds and experiences come up with more creative concepts and solutions to problems. According to research by Harvard Business School professor Roy Y.J. Chua,
“the more your network includes individuals from different cultural backgrounds, the more you will be creatively stimulated by different ideas and perspectives.” Music is a great analogy for how diversity stimulates creativity. Almost all of the most popular types of music have evolved from styles, traditions, and sounds from every culture in the world. Without creative influences from musicians of diverse backgrounds, it is entirely possible that rock and roll may never have come about.
According to Eswaran, “when diverse people are brought together to solve problems, they also bring different information, opinions, and perspectives, resulting necessarily in informational diversity.” He uses a quote from Katherine Phillips of Columbia’s business school to illustrate his point: “Simply adding social diversity to a group makes people believe that differences of perspective might exist among them, and that belief makes people change their behavior.”
Since such a premium is placed on innovation and creativity in today’s workforce, competition to secure top talent can get heated. Research indicates that diversity in the workplace attracts the most talented employees to your organization. In a recent survey by Glassdoor, over two-thirds of respondents identified diversity as an important factor when evaluating companies and job offers.
In similar fashion, by creating a culture of inclusion in your company, you are much more likely to retain employees for a longer period of time. Employees are your most expensive investment, and having to constantly hire and train your workforce can put an enormous strain on your bottom line. According to U.S. Labor Department statistics, employee turnover is at its highest rate since 2008, which is placing employee retention on the top of most companies’ agendas.
In addition to saving money on labor, current research conducted across a wide range of industries in Canada, Latin America, the United Kingdom, and the United States found that companies with a highly diversified workforce were more likely to have financial returns above their industries’ national averages. Eswaran has noticed similar results and points out that “the diversity dividend is not just borne out on a macro scale. It’s also vital within company structures.” Diversity is undoubtedly a competitive advantage that shifts market share toward more diverse companies.
Diversity in the workplace is the reason that Vijay Eswaran is an outspoken advocate for increased impact investment for female entrepreneurs in the Indian and East Asian markets. During the Sustainable Development Impact Summit, Eswaran spoke about the importance of women in the workplace. The event brought together over 700 government, business, and academic leaders from 70 different countries. The primary goal of the conference was to “identify strategies to scale up the most promising partnership efforts to advance women’s workforce participation, leadership development, education, and remuneration.”
In addition to the World Economic Forum’s Closing the Gender Gap Task Forces, the session also works directly with and supports various organizations and initiatives, including SheTrades, the Growth and Economic Opportunities for Women (GrOW) Programme, the G7 Gender Equality Advisory Council, and the Unstereotype Alliance. During panel discussions, Eswaran discussed the need to “close workforce gender gaps across traditional and non-traditional roles.” He strongly believes that women are playing an increasing role in the economic growth of these areas and that, in order to sustain this growth, diversity in the form of gender equality needs to be a priority. He says that investments must “be made in education for women to help develop future female business leaders, educators, and entrepreneurs of the world.”
According to Eswaran, education is the “fundamental flaw in many Asian countries.” He says that “there is a disconnect of sorts in most Asian universities between foundation, curriculum, professors, and students. This disconnect means that by the time [students finish] the curriculum, it [is] already defunct.” In response to this problem, Eswaran and the QI Group makes empowering students, especially women, one of their primary objectives. “Our own version of impact investment was to build a university,” says Eswaran, “and we have been able to reach out and change so many lives.”
In some parts of the world, women have made great strides toward equality. Over the last 30 years in the United States, women have received more bachelor’s degrees than men have. They also have earned the same amount of promotions and raises as their male counterparts, and they stay at their jobs for the same length of time. There is, of course, more work to be completed, especially in the realm of total compensation and the number of women in executive positions in the U.S. To keep a competitive edge, companies, including those based in the U.S., need to make diversity in the workplace a business priority. Business leaders must be held accountable for results to foster a more respectful and inclusive culture in the workplace. With the overwhelming amount of data supporting the financial benefits of a diverse workforce, it will eventually be a matter of survival for any business with global aspirations.
Simply preaching about workplace diversity isn’t going to help; there must be accountability and action with goals set in place. Too many companies with diversity initiatives simply miss the mark. They think that by putting quotas on certain social groups or ethnicities in executive positions, they have checked off their diversity requirements. However, the potential for growth and financial gain is never realized because an authentic team of diverse individuals who practice inclusion in the workplace was never developed and nurtured.
Companies need to approach diversity with a genuine attitude if they want to reap the benefits. It is obvious that innovation is taking place at a faster pace than ever before. Companies are being forced to constantly adapt, adjust, and accommodate to avoid being swept aside. For individuals, companies, and governments, flexibility and versatility are becoming the most important keys to success. The best way to achieve that success is by embracing a diverse environment. As Vijay says, “let’s not just champion the morality of diversity. Let’s also champion diversity because it drives prosperity.”
Go more in depth with Vijay’s insights into the business world through his many books, which are available on Amazon.