Organizational Wellness

Types of Diversity in the Workplace and Their Benefits

Last Updated Nov 4, 2024

Time to read: 6 minutes

You’ve probably heard a lot about diversity in the workplace. And you hear about it for good reason. Diversity literally helps you make more money. There are examples of workforce diversity leading to booming growth everywhere: IBM, L’Oréal, and Twilio for starters. But, unfortunately, many companies might not be paying enough attention to it — more than half of employees report that their companies should be doing more with diversity.

Since diversity is a great business decision and a great way to support your employees, what can you do about it? Well, a great starting point is to understand the types of diversity, so you can begin improving each facet. Let’s dive in.

What Is Diversity?

So what exactly is diversity in the first place? Diversity is having a variety of experiences, backgrounds, and characteristics among a group of people. Diversity can include demographics (like where people come from, age, gender, race, ethnicity), as well as more abstract characteristics like life experience, opinions, and personalities.

Types of Diversity

There are different types of diversity that are important to have in your workplace. Some of these are protected characteristics, meaning they are identified or beliefs protected from discrimination or harassment by law. While not all diverse identities are protected, they all are important to understand.

Religious

Religious diversity is all about creating a work environment where everyone feels comfortable practicing their religious beliefs. Religious beliefs are very common — 84% of the world has some sort of religious affiliation. A religiously diverse workplace is somewhere where everyone is comfortable sharing their beliefs and practices,whether it’s abstaining from morning coffee with the team or participating in prayers.

Age

A variety of ages means a variety of experiences and backgrounds and perspectives. Each generation has unique values they hold dear, and being fresh out of college provides a totally different perspective from someone who’s been in the workforce for 40 years. Both views are important. Accepting all ages also boosts productivity and employee retention.

Cultural

Cultural diversity is all about the beliefs, social structures, and arts in the environment in which you were raised and life and the values you get from that environment. Cultural diversity can even include the values from your family.

Racial

Race is a social construct, but that doesn’t mean it does not have a very real impact on how people experience the world. Social constructs matter in society. And the business benefits of a racially diverse workforce are notable — a 1% increase in management’s racial diversity has been shown to more than double per-employee productivity. Cultivating a racially diverse workplace will shape your recruitment strategy and the training you give staff to support an inclusive culture.

Ethnic

Race and ethnicity are not the same. Ethnicity is more descriptive of a person’s ancestral geography, as well as their language, heritage, religion, and customs. A multitude of ethnicities in your workforce boosts creativity and innovation. Your organization can support ethnic diversity by offering a variety of food options, language learning classes, work week flexibility, and other similar programs.

Skill

Skill sets might not be the first thing you think of when it comes to diversity, but a variety of skill sets — education types and levels, talents, and soft skills — is a type of diversity you should keep in mind.

Neurodiversity

The term “neurodivergent” encompasses a variety of conditions like ADHD, autism, dyslexia and dyspraxia, all of which provide fresh perspectives and skills when given the right support or structure. Neurodiversity is recognizing the value that a variety of thinking styles can add to your team, as well as providing the support those employees need so they can thrive.

Sex and Gender

Previously, sex and gender diversity referred to having a mix of men and women in the workforce and ensuring equal opportunities for both. But as gender is being continually redefined, gender diversity now includes diversity in gender identities, such as transgender or gender-fluid.

Disability

Many people have a variety of physical and mental limitations, and disability diversity is about building an accessible workplace. Supporting disability diversity could include having accessible bathrooms and ramps in the office building. It can also mean providing mental health support and access to mental health care.

Sexual Orientation

Someone’s sexual orientation isn’t visible, so this may be a hidden identity, but that does not mean you should take an “out of sight, out of mind” approach here. Instead, the goal is to create a space where everyone feels welcome by supporting an inclusive company culture. That can include creating policies that are more inclusive to a variety of partnerships (and no partnerships) or benefits that support adoptive and birth parents alike.

Benefits of Diversity & Why Diversity Is So Important

Now that we have a good understanding of the types of diversity to consider, what are the benefits of diversity and having a diverse workforce?

Happy employees. Inclusive workforces with lots of diversity are also workplaces full of happy employees. Diversity helps you improve the employee experience, which then boosts happiness and stability. And ignoring diversity does the opposite. Workplaces without a focus on diversity score 10 points lower on average on the Workplace Happiness Index.
Increased retention. When employees are happy and diversity and inclusion is high, employees want to stick around. Diversity can, in fact, help your employees stick around 20% more often.
Different perspectives. When you have a diverse workforce, you’re getting more perspectives and ideas, which is shown to improve your staff’s creativity
Increased productivity. Hiring for diversity in age, ethnicity, gender, and other factors improves employee productivity. Plus, teams with gender diversity also have been shown to have higher quality work. So that’s more work, done better.
Potential for increased audience. Diversifying your workforce means that more of your teams will know how to reach more people. A homogenous workforce might not, shrinking your potential audience base.
Better profits. Here’s the big one: diversity improves your profits and revenue. Diversity makes you 25% more likely to have above-average profits, and diverse management leads to 19% higher profits. Ethnic diversity leads to 35% more likely to have above-average profits, and gender diversity means 15% higher revenue. Diversity is just good business and a lack of diversity can contribute to slower growth.
Increased applicants. Great strategies for talent acquisition are important to stay competitive. Two out of three job candidates say that diversity is important when evaluating a job offer, so potential employees are actively looking for a diverse workplace.

Laws & Regulations

As discussed earlier, some characteristics of diversity are legally protected characteristics. Here are some of the laws that pertaining to diversity with which HR departments should be familiar:

Equal Pay Act (1963)
Age Discrimination in Employment Act (1969)
Rehabilitation Act (1973)
Americans with Disabilities Act (1990)
Civil Rights Act (1991)
Pregnancy Discrimination Act
Genetic Information Nondiscrimination Act of 2008
ADA Amendments Act

The Bottom Line

All facets of diversity are important in creating a workplace where people want to be and in making your business more productive and profitable. Talk to a Wellbeing Specialist to start building a more inclusive workplace.

Company healthcare costs drop by up to 35% with Wellhub! (* Based on proprietary research comparing healthcare costs of active Wellhub users to non-users.) Talk to a Wellbeing Specialist to see how we can help reduce your healthcare spending!

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