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The Effects of Workplace Diversity

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Under Title VII of the Civil Rights Act of 1964, employees have the right to be treated fairly at work in terms of age, race, gender, abilities and wages. Employers that follow the law and celebrate employee rights can become known as a diverse workplaces. Brad Karsh, president of Chicago-based JB Training Solutions, works with employers to enhance business skills. He says that companies that embrace diversity generate better creative ideas, have an easier time capturing hard-to-land clients, experience good company morale and save money.

Retaining Good Employees

Employers who hire a diverse talent pool retain employees who feel valued and heard. Karsh explains that an employee who feels appreciated and needed engages in more leadership roles, enjoys volunteer activities and is willing to go the extra mile for the employer, such as working later hours, because he's invested in the company's well-being. In addition, fulfilled employees bring fewer lawsuits, have lower absenteeism rates and report higher productivity levels.

Bottom Line Boosts

A diverse company culture is more likely to attract business on a global scale, says Karsh. "Clients like to do business with people who understand their culture and have an appreciation for shared experiences or backgrounds." If a Chinese corporation hires an American advertising agency to launch a campaign, it benefits everyone to have a few executives and creatives who speak Chinese or understand Asian culture, for example. Retaining workers also saves the company costs associated with recruiting, training, administering and mentoring new hires. In addition, they can save money when they have diverse employees who can generate more in-house solutions to service, sourcing and allocation issues.

Employee Productivity Rises

When an employee feels fulfilled in his career and valued at his job, he is healthier mentally and physically, is invested in his career track and is more likely to take on difficult projects, according to Douglas N. Silverstein, a Los Angeles-based employment and labor law attorney at Kesluk & Silverstein, P.C. However, when a worker feels like an outcast because of age, gender or nationality, he might lose self-esteem, stop contributing ideas, begin a pattern of absenteeism and create workplace tension.

Negative Effects

"When people fail to fundamentally understand each other," explains Karsh, "tension can arise." There may also be communication issues, such as employees needing more explanation on projects due to language barriers. Or, generational or cultural prejudices may exist, which could lead to power struggles or decision-making conflicts. This happens when a younger employee dismisses an older employee's ideas, thinking she's not as hip or in-the-know about pop culture, for example. Or, a Baby Boomer might refuse to embrace a new way of doing something and, therefore, bring down morale by dismissing ideas from younger coworkers.