How cultural diversity can boost your bottom line

Cultural diversity can play an important role in boosting workforce capabilities

Cultural diversity is considered a low priority organisational issue among Australian businesses, according to recent research, and companies may be inadvertently hurting their own bottom line as a result.

Conducted by the Diversity Council Australia (DCA) in conjunction with the Scanlon Foundation, the research found that almost 30 per cent of Australian businesses ranked gender diversity as the most important issue to address, while only 13 per cent said cultural diversity is the key priority.

“While it’s important that employers recognise the issue of gender, promoting cultural diversity should also be a key focus,” said Katriina Tahka, cultural diversity director for DCA.

Australia is one of the most culturally diverse counties in the world: one in two Australians is either born overseas or has a parent from another country.

As such, the potential business implications of cultural diversity being considered a low organisational issue are significant, said Tamerlaine Beasley, managing director of consultancy Beasley Intercultural.

“If companies don’t understand diversity, they’re not recognising or addressing the needs of the Australian population,” she said.

“In terms of their capacity to service the market, 25 per cent of Australians were born overseas, so this isn’t just about being nice to people from different cultures – which it is often stereotyped as – but it’s about how you service your market, and that’s a core business principle.”

Improving Asian capability
With many Australian businesses looking to expand into and increase the amount of business done in Asia, culturally diverse teams have the potential to contribute more to organisations than mono-cultural teams, said Beasley.

She observed that 10 per cent of Australians have Asian cultural heritage, but often these people are not promoted – to the potential detriment of business goals.

“If you’re looking at your capability to service, for example, the Mandarin speaking community in Australia, and given Mandarin is the most spoken language here other than English, why would you not leverage that talent in your team?” said Beasley.

An Australian Industry Group survey found that less than 50 per cent of senior executives have experience in or exposure to Asian markets, and Beasley noted that this increases the risks of being unable to understand and leverage cultural diversity as a potential competitive advantage.

The role of unconscious bias
One of the reasons why cultural diversity may rank as a lower priority organisational issue is unconscious bias at the leadership level and in recruitment practices.

Tahka said unconscious bias often comes into play in the recruitment process when discussing matters such as the cultural fit and leadership capabilities of an applicant.

“Those two concepts in themselves sound business appropriate and are widely used and accepted, but they can be code for someone who is ‘like me’ and normally it’s a filter for finding people who are just like the people who already work there,” she said.

The risk of “cultural fit” is hiring in the image of senior leadership teams, who statistically speaking, do not reflect the diversity of the Australian population and don’t necessarily have Asia capability either, Beasley added.

“This is also about global workforce capability, and in the war for talent, it’s interesting that often diversity is perceived to be a nice soft thing … but the reality is if you enable inclusion, participation and you really work well in terms of diversity, then you don’t have to be going offshore to hire talent,” she stated.

What HR leaders need to do?
HR executives need to think about how they harness capability in the Asian Century, manage risk in global markets, meet the needs of a diverse client base in Australia with a view to enabling revenue streams and improve workforce performance through leveraging existing untapped potential.

Tahka said the most important step leaders can take is to stop and think about their own behaviour and the impact it has.

“Leaders play such a critical role in terms of walking the talk and sending out signals about the way things are done around the organisation, and they create the culture in doing so,” she said.

“If they stop and critically asses their own behaviour or patterns, that’s an incredibly powerful moment.”

When it comes to recruitment, leaders can also make a conscious effort to look out for people who are different and potentially improve innovation within the organisation or their own team, she added.

“Not everybody does that when they’re busy and not everybody is very good at doing that, but if they are willing to think about what’s it’s like to be somebody other than them, and then actively try and engage with people who are different to them, that’s the start of a snowball effect. It can have a big impact in organisations,” Tahka said.

More formal programs, such as recruitment process reviews, can also help improve diversity of candidate lists.

“It’s a mixture of both personal reflection and organisational change that’s required. A lot of diversity change is about behavioural change. The person recruiting has to be able to do that and they’re only going to be willing if they see that there’s a benefit or opportunity,” said Tahka.

The positioning of diversity management needs to be seen as a strategic business issue, and Beasley said leadership teams need a greater capability to understand and improve diversity.

“We’re working with leaders of ASX 100 companies in a strategic advisory capacity to make sure those people understand this,” she said.

By Chadielle Fayad