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4 Benefits of a Racially and Gender Diverse Workforce

Updated: Sep 16

Recent projections indicate that racial minorities will outnumber whites for the first time in 2043 and that younger generations are more diverse than previous ones. [1] Employers need to continue to embrace diversity and inclusion to take advantage of the different perspectives, backgrounds and insight a diverse culture brings to an organization.


Additionally, a 2015 McKinsey report on 366 public companies found that those in the top quartile for ethnic and racial diversity in management were 33% more likely to have financial returns above their industry mean, and those in the top quartile for gender diversity were 21% more likely to have returns above the industry mean. [2]


The following highlights some of the key benefits a diverse workforce brings to an organization:


1. Gender & Racial Diversity Drives Satisfaction & Retention

In a survey by the Working Mother Research Institute, 91% of multicultural women stated they were satisfied with their job because they “were able to be their authentic selves” at work. Conversely, when women don’t feel they can be their authentic selves, job satisfaction dropped to just 36%. [3]


According to a recent McKinsey report, 87% of companies are highly committed to gender diversity, compared to just 56% percent in 2012. According to the report, employees universally value opportunity and fairness. Across demographic groups, when employees feel they have equal opportunity for advancement and think the system is fair, they are happier with their career, plan to stay at their company longer, and are more likely to recommend it as a great place to work. [4]

Since 2015, the number of women in senior leadership has grown. This is especially visible in the C-suite, where the representation of women has increased from 17% to 21%. According to McKinsey, “a more diverse workforce will naturally lead to a more inclusive culture. And when a company’s culture feels fair and inclusive, women and underrepresented groups are happier and more likely to thrive.”


2. Diverse Teams are “Smarter” and Make Better Decisions

Research from the Harvard Business Review determined that working on a team with people who are different from you may challenge your brain to overcome its “stale ways of thinking and sharpen its performance” and help make smarter decisions. In fact, the study showed that people from diverse backgrounds might actually alter the behavior of a group’s social majority in ways that lead to improved and more accurate group thinking. [5]


When we look at gender diverse teams, research has shown that compared to individual decision makers, gender diverse teams make better decisions 73% of the time, versus all-male teams (58%). [6]


Researchers were also able to measure the quality of decision making by teams based on the gender, age range and geographic location of team members, and found that as the diversity of teams increased so did the chance of making better decisions. In fact, the most diverse teams made better decisions 87% of the time. [6]

3. Gender Diversity Increases Employee Engagement

In a recent report by Willis Towers Watson, increased gender diversity and opportunities for women to move up the career ladder were shown to have a positive overall impact on employee engagement and employer-favorability ratings. [7]


Large and small organizations are all learning they need to begin supporting working women as an important business strategy. To help make the case, recent research has proven that when women make up more than one-third of promotions at a company, workers gave higher favorability scores in a variety of areas, such as teamwork, performance evaluation, retention, company image and senior leadership. [7]


4. Women are More Engaged & Make Better Managers

Organizations also understand that engaged employees are more likely to remain with a company. In a recent Gallup study of employee engagement, they found that just 30% of U.S. workers were engaged, which they say demonstrates a clear link between poor managing and a nation of “checked out” employees. As they reviewed over four decades of research, including the analysis of 27 million employees' responses, female managers outperformed their male counterparts when it came to driving employee engagement. [8] In fact, 91% of working Americans from a recent survey said mothers bring unique skills, like communication, multitasking, and remaining calm under fire to leadership, that others don’t. [6]


The Gallup research also showed that female managers are more likely to be engaged than male managers (41% to 35%, respectively) and employees who work for a female manager are also 6% more engaged, on average, than those who work for a male manager. In addition, male employees working for female managers have the highest engagement (35% engaged), while male employees working for male managers have the lowest engagement (25% engaged).


Racial and gender diversity is important to organizations and a big part of achieving diversity is the hiring of women. Female workers are important contributors and companies need to embrace their talents and utilize their strengths to create a more successful business.



1. Census Bureau

2. McKinsey & Co. Delivering Through Diversity, 2017

3. Multicultural Women at Work, The Working Mother Report, Deloitte, 2015

4. Cloverpop: Hacking Diversity with Inclusive Decision Making

5. Harvard Business Review: Why Diverse Teams Are Smarter, Nov 2016

6. SHRM. Employees Can Benefit from Working Mothers’ Leadership Skills, May 2019

7. https://hrexecutive.com/why-more-women-in-the-workforce-is-a-win-win-for-employers

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