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Executive Education

What are the key benefits of diversity in the workforce?

According to our latest Executive Horizons survey, the key benefits of diversity in the workplace are enhanced creativity, a more in-depth understanding of customers, a greater ability to innovate, as well as better problem-solving skills and team performance. But what are the main challenges for companies that integrate diversity into their corporate strategy?

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Studies show that having a highly diverse workforce in terms of gender, age, ethnic origin and professional background has a positive impact on company performance. According to a report by McKinsey, ethnically diverse companies are 35% more likely to outperform their competitors in their respective industries and sectors.

However, although there has been a considerable increase in workplace diversity in recent years, it is clear that there is still room for improvement. Only 10% of the CEOs in major companies worldwide are women and only 1% of Google’s global tech staff is African American. Nearly half of the respondents in our Executive Horizons survey affirmed that diversity is not actively promoted in their organization and 15 % gave their company a rating of “2” for diversity on a scale of 1 to 5.


One key benefit of diversity is that it enables companies to acquire a more in-depth understanding of their customers. This gives organizations a strong competitive edge when they expand into international markets. A multicultural workforce from diverse backgrounds can understand local laws, customs and regulations in new markets.

Diverse workforces also benefit from higher levels of creativity. In a Forbes survey of 321 international companies, 85% percent of respondents were convinced that diversity plays a key role in driving innovation. Frédéric Rozé, CEO of cosmetic giant L’Oréal attributes much of its success in emerging markets to its multicultural product development teams, affirming that, "diversity fosters creativity".

Diversity also improves problem-solving skills and team performance. An article in the Harvard Business Review argues that working in diverse teams takes employees out of their comfort zones and this is why they perform better. Fostering a healthy sense of competition motivates teams to achieve their best.  



Companies that embrace diversity in the workplace can reap many benefits but they also have to face a number of challenges. According to our Executive Horizons survey, these challenges include language barriers, cultural differences, the contrasting work ethics of different generations and a divergence of ideas, experiences and points of view.

One of the most obvious challenges in a multilingual office are communication barriers and misunderstandings. In many cases, the common working language is English, but even when everyone speaks the language well, understanding different accents or idioms can sometimes be tricky. Non-verbal cross-cultural communication – things like personal space, eye contact and handshakes – also vary between cultures.

An increasing number of companies recognize the importance of age diversity in the workplace. The challenge here is to manage any potential tension or conflict arising from the contrasting work ethics of different generations. It is therefore crucial to create an inclusive culture that clearly defines individual roles and empowers all employees to make a positive contribution to the success of the company.    

If they want to achieve growth, optimize performance, attract talent and meet the current and future needs of their customers, companies need to reflect the diversity of our rapidly changing world. The challenges involved will be far outweighed by the benefits.

Based on data from the HEC Paris Executive Horizons Survey.