5 Ways Workplace Diversity Can Strengthen Your Franchise Business
Workforce diversity and inclusion play a central role in business performance and longevity, directly impacting a business’s bottom line. For franchise owners, a wealth of benefits can be realized by increasing workplace diversity, from better meeting the needs of your customer base to reduced employee turnover. In fact, diverse workplaces are 70% more likely to capture new markets and cash flows are 2.3 times higher. As you build your franchise, building diversity into your business culture is essential.
What is Diversity in the Workplace?
According to the US Department of Housing and Urban Development, “Diversity is any dimension that can be used to differentiate groups and people from one another. It means respect for and appreciation of differences.” Encompassing the qualities and characteristics that distinguish the different types of people in an organization, franchise owners should be aware of the four main types of diversity in the workplace.
This type of diversity refers to features and characteristics which are part of an individual’s core identity and may involve any trait that a person is born with.
Some examples of internal diversity may include:
- Cultural identity
- Sexual orientation
- Physical ability
- Mental ability
External diversity is generally used to describe attributes, experiences, or circumstances that help define and influence a person’s identity but are not traits they are born with. These features can and often do change over time.
Some examples of external diversity may include:
- Geographic location
- Socioeconomic status
- Work experience
- Religious beliefs
- Parental or marital status
- Personal interests or habits
Also referred to as functional diversity, organizational diversity occurs in any business made up of more than one person. This kind of diversity relates to differences in job function within a business and may involve traits or characteristics that distinguish one employee from another.
Some examples of organizational diversity may include:
- Job function
- Work location
- Department or division
- Management level
- Pay type
- Union affiliation
Many factors often influence an individual’s worldview, including their internal, external, and organizational diversity characteristics. This is another diversity type that can change and evolve.
Some examples of worldview diversity may include:
- Outlook on life
- Moral compass
- Political affiliations
- Travel experiences
Keep in mind that no single type of diversity is more important than the other. A good strategy for improving diversity and inclusion at work should aim to occur across all aspects of diversity.
Why is Diversity Important in the Workplace?
The benefits of diversity in the workplace are far-reaching. Diverse teams bring a wide array of expertise and resources. They improve workplace satisfaction and foster a feeling of unity by helping all employees feel valued. A diverse workplace is also suitable for franchise owners, enhancing productivity and profitability. Here are five ways that diversity in franchising can benefit your business.
Evidence shows that more diversity at the decision-making level helps increase revenue. According to the Harvard Business Review, companies with a diverse workforce are 35% more likely to experience greater financial returns than non-diverse competitors. In particular, having women in leadership directly impacts profitability. Surveys have shown that businesses with a larger share of women in senior positions have significantly higher financial performance.
According to the U.S. Chamber of Commerce, American employers face a growing skills gap. This skills gap includes knowledge, experience, and specific skill sets. While the skills gap occurs for many reasons, one contributing factor is narrow candidate searching. Because a high-quality workforce is an important determinant of business success, employers need to find ways to tap into nontraditional and diverse talent pools to find new pools of candidates.
3. Improve Decision Making
Research from MIT found that “homogeneous groups are less rigorous in their decision-making, and make more mistakes, than diverse ones.” A separate article from Forbes states that diverse teams are better at making decisions 87% of the time than non-diverse teams. Diverse teams not only bring broader perspectives and more information to the table, but they are better at meeting the needs of a diverse customer base.
4. Improve Business Reputation
A diverse workplace can improve your business reputation as it demonstrates to others that you are an organization that values ethical business practices. Job seekers indicate that when inclusivity and diversity are displayed during the hiring process, it helps them develop a positive connection with a company.
5. Reduce Employee Turnover
One of the most significant advantages of workplace diversity is more satisfied employees, increased company loyalty, and reduced employee turnover. 55% of job seekers say it is desirable to work at a company that prioritizes diversity and inclusion. Workplace equality creates an encouraging work environment and culture, increasing confidence and morale.
Neighborly® Supports Franchise Owners Incorporating Diversity and Inclusion Into Their Businesses
Your franchise benefits when you make workplace diversity and inclusivity key objectives. Neighborly is here to support you as you build your franchise with access to established systems and ongoing training.
Check out our Franchising 101 guide to learn more.