The Effects of Lack of Diversity in the Workplace

Tue, Nov 23, 2021 4:40 AM
By Jamal Frederick

Investing in diversity is not a short-lived trend or a new agenda item that ends up being just another box to check in a quarterly meeting. Diversity - the cultivation of an inclusive workforce that represents the varied perspectives and personalities of the world around us - is the benchmark that defines a new era of corporate culture. No longer a casual consideration, diversity will be the determining factor between success and failure, short-term success and longevity. 

A lack of diversity not only displays an apparent disconnect from the modern and rapidly growing consumer base, but it ignores the deep multicultural talent pool and essentially the dynamic world around us. Refusing to invest in diversity will negatively impact every organizational goal from innovation, culture, morale to profitability. 

What does it mean to be a multicultural workplace? discusses the modern multicultural workplace in the current context as, 

“A multicultural workforce is one made up of men and women from a variety of different cultural and racial backgrounds. The labor force of any country is a reflection of the population from which it is drawn, despite some distortions that may be caused by discrimination or cultural bias in hiring. In the United States, the population has continued to grow more racially and ethnically diverse in the last decades, and this diversity is now reflected in the workplace. Managing this diversity in such a way that the benefits are maximized and the challenges minimized is an important aspect of managing any business today.”

What Are the Elements of a Diverse Workforce?

A diverse workforce comprises a variety of differences between individuals in an organization. Diversity not only includes how individuals self-identify but also how they are perceived by others. Workplace diversity encompasses race, gender, nationality, ethnic group, age, religion, sexual orientation, citizenship status, military service, and ability (mental and physical conditions), as well as many other distinct differences.

The Negative Effects of a Lack of Diversity

Marginalization. Minority employees in non-diverse environments are further pushed to the margins and experience extreme isolation. This loneliness not only affects the employee personally, but it reflects a space without allies, friends, and adequate support, contributing to mental and emotional distress as well as potentially disassembling any ladders to mobility and success. The prevailing reality is that those in the margins remain in the margins. 

Irreparable missteps and mistakes. When the lack of diversity extends to the management and any decision-makers, it creates an increased opportunity for tone-deafness, error, and blindspots in marketing and branding. There have been numerous instances of missteps made by companies. They faced severe public scrutiny and criticism, issued public apologies, and suffered grave damage to their brand, reputation, and profits.

Employee retention. Dissatisfied employees that feel unsafe or don’t feel included have a high rate of turnover. Such a high turnover rate is costly as the company has to hire and train new replacements. Losing top talent to competitors is also a risk if the workplace does not provide a safe and supportive culture where employees from diverse backgrounds aren’t welcomed and treated fairly. 

A 2017 report from The Kapor Center and Harris Poll found that workplace culture drives turnover, significantly affecting the retention of underrepresented groups and costing the tech industry more than $16 billion each year.

Advantages & Disadvantages of Having a More Diverse Workforce 


Innovation. Diverse staff from diverse backgrounds bring with them their diverse thoughts, ideas, and perspectives. This cultural collision is a breeding ground for innovation. Studies show that diverse companies are almost 50% likelier to report a growth in market share over the previous year and 70% likelier to note that the firm captured a new market.

Productivity.  The greater variety of skills and talents associated with a diverse workforce directly contributes to productivity. Organizations that invest in diversity boast higher productivity in addition to new products and services, as different workers have different skills, abilities, and areas of expertise that lead to innovation. 

Company culture. When employees see diversity in their workplace, they have an overall more favorable opinion of their company, increased comfort, and a sense of belonging. They feel more representative of the company and its vision. Two-thirds of job seekers say diversity is an essential factor for them. When organizations value those expectations, it leads to a satisfied, fulfilled, and productive workforce.


Transitioning new diverse employees. If organizations fail to provide the right programs to help with diversity training, they will be unable to transition the new employees into their current company culture. 

Communication issues. Cultural communication may be a barrier. If an organization doesn’t have the proper systems or the appropriate company culture that encourages inclusion and belonging, it will lead to a communication breakdown. The different cultures will clash vs. becoming a cohesive unit. 

Resistance. Simply put: some people just don’t like new things. Some may fight against the very idea of promoting and encouraging diversity. Changing systems, mentalities and encouraging anything “new” can lead to a fight from those comfortable holding onto old ways. Those who feel this way may not want their unconscious bias challenged or faced.  

How to solve these issues? 

The most effective way to prevent detrimental problems that arise from a lack of diversity to prioritize:

Policies. Create systems and procedures that provide transparency, structure, and accountability. 

Continuous training. Constant self and organizational evaluation to identify blind spots and areas of improvement. 

Prioritize respect. Cultivate an environment of sincerity and respect. Nobody is perfect, and addressing diversity and inclusion involves sensitive personal topics, so prioritizing respect creates a foundation of good faith upon which everything will rest. 


For any organization to reach its maximum potential, it’s apparent that it must invest in diversity. It is not just a trend or fad or something an organization needs to satisfy for “politically correct” reasons; it’s the standard. It’s the only way to operate with consideration and integrity to reach the growing consumer base in a way that transcends the superficial but connects on a personal and human level. When an organization invests in diversity, it’s a win-win for everyone.