5TH MARCH, 2020

How Does Team Diversity Drive Innovation?

Diversity in the workplace brings fresh perspectives, a broader range of skills and gives the company a more outward-looking appeal. But how can having a diverse mix of people in a team drive company innovation? And what are the challenges? Here we take a look.

To start off, what exactly is diversity?

Diversity is when a community co-exists that’s made up of different people with various different characteristics. Typically it’s where people come together from a number of different socio-economic backgrounds, ages, ethnicities, genders and races. They may also have different nationalities, languages, abilities and sexual orientations.

Why is diversity so important for a business?

Gone are the days when diversity - and the innovation it tends to bring - are optional extras. Instead, they’ve now become an integral part of a company’s success, bringing people together to achieve business goals.

By drawing on the skills of individuals who each bring something different to the table, businesses can compete more effectively and market their products more accurately to their audiences. It will also bring about a positive, dynamic feel to the company which is incredibly important.

Diversity can give rise to creativity

Working for a company that encourages new ideas, no matter how wild or wacky, can feel incredibly liberating. When a diverse mix of people feel able to speak their mind and put their thoughts out there, they’re likely to feel more valued by management and believe that their creativity matters. It also brings about a culture where openness and transparency thrive.

Diversity means that different people see the world from various different viewpoints. When individual personalities and perspectives are celebrated, inspiration and creativity will follow.

Diversity helps with hiring and retaining employees

As a business grows it becomes more and more important to have a robust recruitment plan, particularly with regard to diversity. In the current economic climate, competition for talent is extremely fierce. In order to attract - and keep hold of - the very best employees, an inclusive and diverse workforce is a vital consideration. On top of this, it sets your business apart from the competition, making the public (and potentially new clients) aware of your products/services.

Diversity can encourage decision-making

When a team of workers is made up of individuals from a range of backgrounds, training and experiences, there’s much more opportunity to benefit from different ideas and suggestions. This then creates a more ‘democratic’ way of making decisions and coming up with innovative solutions. It also brings about the chance for people to think more independently, and to take responsibility for their own decisions. Such a feeling of autonomy is again likely to help employees make better decisions more quickly, and to think outside the box.

Diversity can bring about an improvement in the products you’re offering

A diverse business team reflects a diverse society, and this can be highly beneficial when it comes to expanding product ranges for example. Additionally, another big benefit of having multicultural perspectives is that they help to safeguard against gender and racial bias for instance, which again can show itself in the design of your products. Plus of course, with better products and services you offer by way of quality and range, the more profitable your business will (hopefully) be.

Diversity fosters team cohesion

Whilst it’s great to read about different cultures for example or research different ethnicities online, there’s no substitute for achieving knowledge first hand. A face to face chat with a colleague or networking with people from different backgrounds is the perfect opportunity find out more about their lifestyle, attitudes and ideas. Getting to know people in this way is then likely to bring them closer together, and to focus more on common ground rather than on differences. It also brings about trusting working relationships and a better team dynamic.

Cultural diversity can strengthen a company’s reputation

Nothing shouts ‘inclusive, forward-thinking employer’ more than a happy, diverse workforce - and it doesn’t take long for word to get around. Businesses who recruit people from a broad variety of backgrounds often find their reputation is boosted, not just for their innovative approach but for being a good employer.

Diversity can make clients feel more valued by the business

As we’ve discovered, a diverse workforce means a good mix of skills and knowledge. This can help a business to grow into new markets, and help customers feel the company can relate to them. It can also help clients to feel better served and understood.

What are the challenges in managing diversity?

Many people harbour prejudices and stereotypes both consciously and subconsciously. Eroding these can take time and effort, but it's worth it for your business. Once a diverse team has bonded, innovation and creativity can thrive, benefitting not just the team but the company as a whole. But there’s still likely to be challenges along the way.

The key to managing diversity is often in giving the team a common goal. A commitment to working towards this goal and participating in common objectives is likely to be stronger than any issues with diversity.

Does your Irish company engage in innovative projects?

If so then it may well be eligible for R&D Tax Credits, a valuable tax incentive offered by the Revenue. The relief can be worth thousands of euros, and is substantial help for companies looking to reinvest and grow. The scope for claiming, and the costs that can be included are huge. Find out more on our R&D Tax Credits webpage.

Also, why not try out our Tax Cloud calculator and see what you could claim, before making a fully guided R&D tax relief application through our Tax Cloud portal for businesses? Offering a great value, high quality service, our R&D tax relief accountants and specialists are also on hand for anything you need.

Simply call us today on +353 1 566 2001, or you can use our contact page to get the conversation started.

Barrie Dowsett, ACMA, GCMA
Author Barrie Dowsett, ACMA, GCMA CEO, Tax Cloud
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