Most senior executives agree that improving workplace diversity will help a company become more competitive, due to having a variety of talented individuals. Organizations have learned that diversity and inclusion lead to more innovation and improved business performance, in addition to more employment opportunities for all.

A study by McKinsey shows that companies in the top quartile for gender, racial, and ethnic diversity are more likely to have financial returns above national industry medians. Companies in the bottom quartile are less likely to achieve above-average returns. This study highlights diversity as a competitive differentiator that shifts the market share towards more diverse companies over time.

Good workplace diversity in terms of gender, nationality/ethnicity, and age also benefits the economies in which businesses operate. A study by the research firm Catalyst shows that increasing the level of female employment helps raise GDP by 5% in the US, 11% in Italy, and 27% in India. And that’s without taking into account the positive social impact that is sure to follow.

Here are some other advantages of having workplace diversity:

Employer Branding

Companies with strong diversity programs tend to have a better reputation in their market, as they are viewed as fair and socially responsible employers.

Access to Talent

A large portion of millennials consider an employer’s policies on diversity, equality, and inclusion when deciding which company to work for. Having a diverse workforce makes a company more interesting, and allows people to acquire more knowledge from colleagues with different backgrounds. A diverse company also attracts better talent from around the world, since it knows where to look.

Good for Business

Companies that embrace diversity initiatives gain higher market shares and a competitive edge when accessing new markets. Studies by McKinsey have shown that diversity also has a strong positive impact on financial performance. 85% of the CEOs surveyed, whose companies have a formal diversity and inclusiveness strategy, said that it has improved their bottom line.

When companies commit themselves to diverse leadership, they are better able to win top talent and improve their customer orientation, employee satisfaction, and their decision making process, leading to a healthy cycle of increasing returns.

One study by Katherine Phillips, a Professor at Kellogg, shows that even adding one employee from a special background can get the others out of their comfort zones and thinking differently about a business situation. If you have a team of diverse employees, they’re sure to come up with several different ideas, thanks to the unique perspective of each member.

Encourages Personal Growth

A diverse workplace offers more global exposure to employees from different cultures and backgrounds. Employees learn from co-workers whose work styles and attitudes vary from their own. This is particularly true for employees within multigenerational work environments.

For example, traditional workers can learn new technology and processes from workers who belong to the tech-savvy millennial generation. Likewise, Generation X employees can learn from exposure to the assertive work ethic that’s typical of many Baby Boomers. By working with people who have different backgrounds, experiences, and work styles, we learn and develop new perspectives ourselves. These diverse views help in making better decisions, and thus, they drive a high-performance culture.

Diversity is a journey, and companies need to get on board and integrate it into their business. With the right mix of the right people, your business is sure to thrive and become a top player in the industry.