Diversity, including diversity of gender, religion, and ethnicity, has been shown to improve retention and reduce the costs associated with employee turnover. While these can be enriching and even beneficial in a diverse professional environment, they can also cause misunderstandings or ill feelings between team members. Language barriers are generally temporary in nature (most immigrants eventually learn the language of the country they move to), but the resultant segregation can endure, as exemplified in segregated neighborhoods and ethnic ghetto… Elements of culture, such as language and dress, may clash with established norms within a workplace, giving rise to resentment and mistrust. Time: Cultures differ in how they view time. That would add up to the stress and make the environment even more negative. Benefits of Cultural Diversity in the Workplace . Oppression, high stress and low job performance are just a few effects of cultural stereotypes in the workplace. To learn more, take a look at our blog How volunteering prepared me for business school, or give your employability a huge boost with an MBA in international business. For instance, the expectation of formality (or relative informality), organizational hierarchy, and even working hours can conflict across cultures. For example, they differ in the balance between work and family life, and the workplace mix between work and social behavior. According to Frank Dobbins, a Harvard Sociologist focused on diversity training, there are three primary reasons D&I efforts can go wrong– and hurt a company’s culture. Language barriers are just one challenge. The business risks losing top talent to competitors if the workplace does not provide a safe and motivating culture where employees from diverse backgrounds are welcomed and treated fairly. Two-thirds of hiring managers say that a diversity initiative helped their company grow, creating new positions and opportunities for … Diversity and international exposure have always been important to the decisions I have made in my career.”, Vishnu Subramanian, Hult MIB Class of 2017. The time and expenses invested may not have value if the company sees limited benefits of having a diverse workplace. Cultural diversity is becoming an increasingly important issue for companies in the U.S. More women and men of different ethnicities, … Non-verbal communication is a delicate and nuanced part of cultural interaction that can lead to misunderstandings or even offense between team members from different countries. Diversity and Its Impact on Companies ... it is imperative that employers learn how to manage cultural differences and individual work attitudes. However, a number of barriers or filters can prohibit clear and meaningful communication between employees. Effects of Multiculturalism on Job Performance & the Workplace. Originally from Michigan in the U.S., she relocated to the U.K. in 2010 to pursue a master’s degree at Hertford College, Oxford. 3. 1. Adaptability means faster and more effective planning, development, and execution. Although not all stereotypes are necessarily negative—like the notion that Americans are confident or Asians are intelligent—all are simplifications that can prove limiting or divisive in the workplace. Often, a product or service needs to be adapted to succeed overseas. Workplace cultural diversity and productivity are closely related. Whereas others, such as Germany and America, put emphasis on the independence of the individual. Each year, DiversityInc selects the 50 most diverse companies. For instance, providing a quiet space for prayer can make a workplace more welcoming and inclusive for employees with a range of beliefs, as can taking into account different cultural or religious holidays. Hiring managers focus on leadership qualities too often.Diversity in the workplace seeks out experts who excel in their chosen career, job function, and team environment. Collectively, it suggests that diverse work environments boost profitability, culture… Do these influence your professional life today? Cultural diversity affects the businesses in many ways including the staff recruitment/retention, management styles and decision-making processes, and relationships within organizations. But the potential benefits can only be realised if organisations foster a conducive atmosphere for their diverse workforce. In today’s volatile and uncertain global business environment, nimble and adaptable organizations are the ones that thrive. Have you experienced any particularly positive or negative aspects of working in a culturally diverse team? For instance, approaches to teamwork and collaboration can vary notably. At Hult, diversity and global mindedness are integral to our DNA. In fact, ethnically diverse companies were shown to be 35% more likely to have financial returns above the national industry median. “One of the main reasons I chose Hult was the incredible diversity of students and the international element we possess here. Cultural … By drawing from a culturally diverse talent pool, companies benefit from hiring professionals with a broad range of skills that are often not accessible when hiring locally. These changes may … 13 benefits and challenges of cultural diversity in the workplace, Hult International Business School is a 501 (c)(3) non-profit educational organization registered in the Commonwealth of Massachusetts and accredited by, Diverse cultural perspectives can inspire creativity and drive innovation, Local market knowledge and insight makes a business more competitive and profitable, Cultural sensitivity, insight, and local knowledge means higher quality, targeted marketing, Drawing from a culturally diverse talent pool allows an organization to attract and retain the best talent, A diverse skills base allows an organization to offer a broader and more adaptable range of products and services, Diverse teams are more productive and perform better, Greater opportunity for personal and professional growth, Colleagues from some cultures may be less likely to let their voices be heard, Integration across multicultural teams can be difficult in the face of prejudice or negative cultural stereotypes, Professional communication can be misinterpreted or difficult to understand across languages and cultures, Navigating visa requirements, employment laws, and the cost of accommodating workplace requirements can be difficult, Different understandings of professional etiquette, Download a brochure to find out more about the programs at Hult, emphasis on the independence of the individual, How volunteering prepared me for business school, Hult MBA ranked #15 in the world by the Economist Which MBA? For example, cosmetic giant L’Oréal attributes much if its impressive success in emerging markets to its multicultural product development teams. What Are the Elements of a Diverse Workforce. 2021. How Cultural Diversity Affects Women in the Workplace. When employees feel like they cannot reach a point of agreement in conflict they may give up and simply let the ill feelings fester and create a negative tone. Diversity in the workplace is far more complex than applying good and bad labels and often has both positive and negative effects. Our mission is to prepare our students to thrive in a fast-paced, unpredictable, and fundamentally international business environment. Diversity can lend a competitive advantage to an organization if skillfully managed, but if not, an organization can be negatively affected by having an unwelcoming work environment. It’s also critical to create an open and inclusive workplace environment, so all team members feel empowered to contribute. Constantly replacing employees lost to ill will or a general feeling of discontent is costly as the company has to pay to hire and train replacements. Why Cultural Diversity In The Workplace Is A Win-Win Teams and companies that make diversity a priority offer a variety of ideas, perspectives and learning opportunities. But with benefits necessarily come challenges of working across borders, cultures, and languages. What Is the Advantage for a Business to Have Diversity Training for Its Employees? Cross-cultural understanding, along with local market knowledge, lends itself the production of more effective marketing strategy and materials. For instance, professionals from Asian countries such as Vietnam or Japan may feel less comfortable speaking up or sharing ideas, particularly if they are new to the team or in a more junior role. The range of experience, expertise, and working methods that a diverse workplace offers can boost problem-solving capacity and lead to greater productivity. Let us know in the comments below. Bonding over similarities and differences can help you to become a global citizen, abandoning prejudices or an ethnocentric world view—something that is increasingly valuable. Not only does hiring from a more diverse talent pool makes your business attractive to ambitious, globally minded candidates, it also helps you to keep them on board. Too many opinions can also be hard to sift through and waste valuable time, while potentially creating fog around the best answers, says FDI. Hear how Richard Branson makes culture work in a multinational business by being flexible and open to different working styles: In many ways, the Hult classroom mirrors this experience, immersing you in a diverse and collaborative working environment from day one. If a workplace has employees from different countries with different native languages, communication is especially difficult. This Way: 7 Biggest Diversity Issues in the Workplace, FDI: Top Challenges of Diversity in the Workplace, Advantages & Disadvantages of Having a More Diverse Workforce, Benefits of Accommodating Workforce Diversity. As national politics and discourse seem to grow more inward-looking and divisive across America and Europe, successful businesses must continue to think inclusively and globally. Requirements and regulations are different in each country and between countries, and can change frequently. By offering a platform for the open exchange of ideas, businesses can reap the biggest benefits of diversity in the workplace. Negative cultural stereotypes can be seriously detrimental to company morale and affect productivity. A memorable McDonalds print ad in Finland may have been considered clever locally, but it was seen as confusing and even grotesque by foreign audiences. Where a Japanese colleague may not feel it appropriate to leave work before their manager (or, indeed, anyone else), a Swedish professional may be used to a 6-hour working day. A potential benefit is an increase in creativity … Diversity, it turns out, does pay. One negative effect of cultural diversity in the workplace is the increased tendency of organizational personnel to indulge in interpersonal conflicts. According to a Glassdoor survey, two thirds of job hunters indicated that diversity was important to them when evaluating companies and job offers. This atmosphere of healthy competition can lead to the optimization of company processes for greater efficiency. A multicultural workforce can give an organization an important edge when expanding into new markets. In a competitive global job market, demonstrating that your business is invested in fostering a multicultural and inclusive environment can make you stand out to the right candidates. Additionally, different approaches to punctuality, confrontation, or dealing with conflict can prove an issue. Negative Effects "When people fail to fundamentally understand each other," explains Karsh, "tension can arise." There are pros and cons of diversity in the workplace, particularly if diversity is poorly managed. What might work well on a billboard for a British company could fail or offend elsewhere. Here are the three common missteps: When it’s mandatory. When employees accept the differences between each other, it results in a sharing of ideas and effective collaboration. Sometimes, a little bit of humor is the best way to diffuse negativity. For instance, the centuries-long antipathy between the British and French, or the Polish and Germans can sometimes creep into the workplace. Culture is known to be profoundly negative in places where the diversity of cultures is not celebrated. Diversity in the workplace helps companies begin growing. Beyond visas, further accommodations for a recruiting and retaining a culturally diverse workforce should be taken into account. Download a brochure or get in touch today to find out how Hult can help you to explore everything about the business world, the future, and yourself. By studying around the world and learning with peers and professors from over 150 different countries, you will master the skill of communicating effectively across cultures and embrace the value of diversity in the workplace. He thinks the contrasting positive and negative effects of diversity can coexist in communities, but "there's got to be a limit." The Virgin Group is recognized as a leader in promoting workplace diversity and fostering a positive working culture. Business Insider put together this useful infographic to highlight the differences in handshakes and professional greetings around the world: Despite the clear benefits, hiring talent from overseas can present an HR challenge. As the labor force becomes more diverse there are both opportunities and challenges to managing employees in a diverse work climate. Of course, these considerations and accommodations can sometimes be an added business cost as well as a logistical challenge. Diversity, on the other hand, can breed healthy competition, stretching a team in a positive way to achieve their best. It is imperative that companies train employees on cultural awareness and tolerance of differences to encourage them to openly discuss their different viewpoints on things as opposed to avoiding interaction or getting into conflict. Dissatisfied employees that feel like the work environment is unsafe will leave. Move diversity and inclusion out of human resources. If a workplace has employees from different … However, the presence of diverse brain power alone is not enough. Different perceptions of time can cause a great misunderstanding and mishap in the workplace, especially with scheduling and deadlines. Mandatory diversity and inclusion training can net an immediate and negative … Even brand taglines can get badly lost in translation. How Does Diversity Impact Business? People that come from different cultural backgrounds have different perspectives on how to handle issues or concerns that arise. Workplace diversity creates opportunities for companies to get broader perspectives on business situations and to improve global reach, but it does often create some negative impacts in the company. Embracing cultural diversity in the workplace is an important first step for businesses that want to be competitive on an international scale. This can be a challenge to overcome, particularly if there are underlying prejudices between cultures, making them less inclined to work together. There may also be communication issues, such as employees needing more explanation on … A variety of viewpoints along with the wide-ranging personal and professional experience of an international team can offer new perspectives that inspire colleagues to see the workplace—and the world—differently. Colleagues from different cultures can also bring with them different workplace attitudes, values, behaviors, and etiquette. Not least among this is the complicated process of navigating employment laws and visa requirements for international workers. While local expertise is an invaluable asset, it’s also important to foster integration among teams to avoid colleagues from different countries working in isolation and limiting knowledge transfer. A diverse set of colleagues can be professionally enriching too—exposing you to new skills and approaches to work, and developing an international network that can take your career in exciting new directions or abroad. This, in turn, fosters mutual respect among colleagues who also value the diverse culture, perspectives, and experiences of their team members. Discrimination and wars based on cultures are the sole purpose they are deemed as “not … Things like comfortable levels of physical space, making or maintaining eye contact, and gesturing can all be vastly different across cultures. A negative byproduct of diversity in the workplace … Over the past two decades, as scholars have sought to quantify the economic effects of workplace diversity, a growing body of research has emerged. Multiple voices, perspectives, and personalities bouncing off one another can give rise to out-of-the-box thinking. A fundamental value that contributes to a successfully diversified workplace is respect among workers and employees. Acceptance fosters mutual respect and prevents conflicts from arising. Fundamentally, an inclusive and culturally diverse business will attract talented, ambitious, and globally minded professionals who will appreciate the opportunity for personal and professional growth. In a diverse workplace, employees are more likely remain loyal when they feel respected and valued for their unique contribution. Request a Brochure Apply Now Free GMAT Test. In 2020, it found that employees who felt included in their workplace … As our students develop into the global business leaders of tomorrow, they can certainly expect to encounter these 13 key benefits and challenges of cultural diversity in the workplace. A broader skills base and a more potentially diverse offering of products and services can help your business to have the competitive advantage of adaptability. Even something as simple as a greeting or handshake has cultural implications that should be considered in a work environment. When there is a lack of acceptance of the diverse culture and beliefs among employees, conflicts may arise. Diversity of thought has been shown to breed creativity and drive innovation, helping to solve problems and meet customer needs in new and exciting ways. By and large, diversity and inclusion initiatives … Understanding local laws, regulations, and customs, as well as the competitive landscape, can help a business to thrive. An inability to see where the other person is coming from can prohibit effective resolution of conflicts. Written by Hult contributing blogger Katie Reynolds who is a freelance writer based in London. A frequently cited example is from KFC in China, whose chicken was marketed as so tasty, you’ll “eat your fingers off!” (A poor translation of their brand tagline, “Finger lickin’ good.”). And being more competitive ultimately means being more profitable. Sometimes, this conflict turns to animosity and may even effectuate situations of violence. Today, she writes on topics including business, higher education, healthcare, and culture. According to Kravitz, both these claims are naïve and inaccurate. For example, high quality and culturally sensitive translations of websites, brochures, and other assets are essential. DiversityInc annually recognizes the top 50 most diverse companies and measures their success against the broader market. Workplace diversity refers to the division of the workforce into distinction categories that have a perceived commonality within a given cultural or national context and that impact potentially … An inclusive atmosphere of cross-cultural cooperation is an excellent way to bond colleagues and teams across the business. 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