Diversity Effects on the Workplace


Diversity refers to the “extent to which the workforce of an organization is heterogeneous in terms of personal and functional characteristics” (Paludi 12). It encompasses the demographic attributes of the employees such as their ethnicity, gender, age, culture, and race. Diversity also includes the educational achievements and the work experience of the employees. In the last five decades, most companies focused on implementing diversity programs to recruit and effectively manage employees from different socio-cultural backgrounds. This trend is attributed to factors such as prohibition of discrimination, globalization, and competition.

Diversity is associated with positive effects such as increased productivity, creativity, and improved product quality. However, some scholars believe that diversity leads to challenges such as increased conflicts and communication barriers at the workplace (Stewart and Brown 78). In this paper, the positive and negative effects of diversity will be discussed. The discussion will be based on the premise that diversity is a strategic tool for enhancing organizational performance.

Positive Effects of Diversity

Problem-solving Efficiency

Employees from different backgrounds have unique perceptions, educational achievements, experience, and skills that are necessary for solving challenging problems. For instance, young employees tend to learn faster and possess better cognitive and physical abilities than their older colleagues. On the other hand, senior/ old employees usually possess more experience and knowledge concerning key business processes such as marketing.

In this respect, combining the skills and capabilities of old and young employees can greatly enhance problem-solving processes. In addition, diversity enables employees to share their varied viewpoints as they articulate the problems that are hindering the growth of their organization. The resulting improvement in ideation leads to creativity, which ultimately leads to innovation at the workplace. Businesses that are able to tap the diverse skills and expertise of their workforce often succeed in implementing their strategies and satisfying customers’ needs (Stevens, Plaut and Burks 116-133).

Improved Performance

Diversity enhances organizational performance in the following ways. First, it facilitates adaptability at the global and local level (Yeager and Nafukho 388-408). A diverse workforce is likely to develop a variety of solutions in terms of products, business processes, and resource allocation, thereby meeting the diverse market needs at the global level. Second, diversity facilitates creation of synergies with strategic partners such as suppliers and distributors in overseas markets (Leveson, Joiner and Bakalis 377-392).

For instance, the company can take advantage of the different languages of its employees to build strong relationships with customers, distributors, and suppliers through effective communication. As a result, the company will be able to produce and distribute its products more easily in markets that are characterized with diverse cultures. Finally, diversity facilitates outsourcing of non-core business processes such as IT and accounting. Specifically, it promotes collaboration among virtual team members who are able to communicate and coordinate their activities effectively, thereby reducing operating costs while improving productivity.

Attracting and Maintaining the Best Talent

Most job seekers often ignore companies that have no clear policies on diversity to avoid the unfair treatment that they might receive at the workplace due to their social or cultural backgrounds (Trevor, Ristow and Pearse 63). In this respect, only companies that have a good reputation for their diversity programs are able to compete effectively for talent. Undoubtedly, hiring the best talent improves the financial performance of the firm through increased sales and development of superior products. In every organization, “employees need a feeling of belongingness” (Trevor, Ristow and Pearse).

In addition, they expect fairness and respect irrespective of their backgrounds. If these conditions are not met, employees are likely to be unsatisfied and less productive. Furthermore, the level of labor turnover is likely to rise significantly. Conversely, employees’ commitment and loyalty is likely to improve if their beliefs, cultures, and ideas are respected. The resulting reduction in labor turnover leads to low operating costs. A low labor turnover is also a sign of a healthy work environment, which enables companies to attract investors and to maintain a strong relationship with the public.

Learning and Growth

Workplace diversity is one of the best ways of promoting knowledge transfer and learning among employees. For instance, most multinational companies normally integrate employees from their home countries with workers in overseas markets to enhance learning. In this case, the locals learn new skills and acquire advanced knowledge from ex-pats through observations, informal discussions, and formal training (Leveson, Joiner and Bakalis 377-392).

Workplace diversity also promotes multicultural communication. Members of the workforce have to learn to communicate effectively through a common language that is understood by all employees. Furthermore, they will get the chance to learn about each other’s culture and to tolerate their cultural differences. As a result, the employees will be able to adapt easily to new cultures whenever they undertake international assignments. A diverse workforce presents the best opportunity for developing conflict resolution skills (Stewart and Brown 102). It gives employees the chance to use various theories to solve conflicts that arise due to cultural differences.

Teamwork is likely to be strong in organizations that have effective diversity programs. Employees who have learnt to appreciate divergent opinions and traditions are likely to cooperate with their team members (Leveson, Joiner and Bakalis 377-392). The existence of varied skills and expertise in a diverse workforce also promotes teamwork. Specifically, the team members can use their diverse skills to solve the problems that the team is facing. This leads to improved output and efficiency within the team.

The Negative Effects of Diversity

Although diversity has several advantages, it can create serious challenges if it is not managed effectively. One of the arguments against diversity is that it can lead to communication barriers. This challenge arises when members of the organization have different communication styles and speak different languages (Paludi 81). In this case, misunderstandings can arise, thereby causing disagreements and poor cooperation.

Conflict among employees is another common negative effect of diversity. Conflicts are likely to arise if employees are not able to tolerate their diverse cultures and divergent viewpoints. This leads to resistance to change and lack of cooperation among employees. Organizations usually fail to create a uniform organizational culture after recruiting a diverse workforce due to the dominance of the national cultures of their employees (Stewart and Brown 86). As a result, productivity and morale among employees reduce significantly because of cultural conflicts.

Discrimination can also be a major problem in organizations that have a diverse workforce, but lack a comprehensive diversity management policy (Yeager and Nafukho 388-408). In this case, employees from disadvantaged groups such as minority ethnic communities, women, and the disabled are likely to receive unfair treatment (Stewart and Brown 94). For instance, they might receive low salaries and fail to get the chance to advance their careers due to perceived inferiority.

Implementing diversity programs at the workplace is often associated with high costs. Generally, training programs have to be implemented to create cultural awareness and to promote harmony at the workplace (Paludi 96). In countries or states where minority groups benefit from affirmative action in the labor market, diversity can significantly increase staff costs. For instance, finding a highly qualified employee among minority ethnic groups can be difficult due to low education attainment. Thus, the organization will be forced to invest in expensive headhunting exercises.


Diversity has several positive effects on the workplace, which include improved productivity, learning, and problem-solving techniques. It also enables companies to hire and retain the best talent in the market. These benefits enhance organizational performance by improving adaptability and ability to overcome competition in different markets. However, diversity can also lead to communication barriers, conflicts among employees, discrimination, and high operating costs. Clearly, these challenges normally arise due to implementation of diversity programs using ineffective policies.

In this respect, organizations should consider the following recommendations to take advantage of the benefits of diversity. First, organizations must address cultural, perceptual, and communication barriers. This will prevent the conflicts that are likely to arise in a diverse workforce. It will also promote teamwork, cooperation, and high morale among employees. Second, an effective change management program should be put in place to encourage employees to appreciate diversity at the workplace. The change process should focus on encouraging employees to accept new ideas, processes, and cultures. Finally, training programs should be used to link employees’ diverse skills, beliefs, and cultures to their professional development.

Works Cited

Leveson, Lynne, Therese Joiner and Steve Bakalis. “Managing Cultural Diversity and Perceived Organizational Support: Evidence from Australia.” International Journal of Manpower 30.4 (2009): 377-392. Print.

Paludi, Michele. Managing Diversity in Today’s Workplace, Santa Barbara: ABC-CLIO Praeger, 2012. Print.

Stevens, Flannery, Victoria Plaut and Jeffrey Burks. “Unlocking the Benefits of Diversity: All-inclusive Multiculturalism and Positive Organizational Change.” Journal of Applied Behavioral Science 44.1 (2008): 116-133. Print.

Stewart, Greg and Kenneth Brown. Human Resource Management: Linking Strategy to Practice, New York: McGraw-Hill, 2008. Print.

Trevor, Amos, Adrian Ristow and Noel Pearse. Human Resource Management, London: Palgrave, 2009. Print.

Yeager, Katherine and Fredrick Nafukho. “Developing Diverse Teams to Improve Performance in the Organizational Setting.” European Journal of Training and Development 36.4 (2012): 388-408. Print.