How Increasing the Diversity of Your Sales Team Improves Your Bottom Line
Companies are always seeking innovative ways to get ahead of the competition. Investing resources in diversity, equity, and inclusion (DEI) has proven to be a key factor in the overall success of a company.
In a McKinsey study, highly diverse businesses were 36 percent more profitable than competitors with low diversity.
Having a more diverse sales team not only creates a more inclusive workplace, but it also improves the company’s bottom line.
Let’s look at how diversity among your sales team can boost business.
What is Diversity in the Workplace?
Employing individuals from varied backgrounds throughout an organization is the hallmark of diversity in the workplace. This can include gender, race, age, ethnicity, sexual orientation, religion, education, and more.
Inclusion covers how the contributions and perspectives of different groups are appreciated and integrated into the workplace, while equity is about ensuring everyone gets access to the same opportunities while accounting for inequalities.
Diversity Alone is Not Enough
While a diverse sales team can bring about many benefits, it is not enough to improve your bottom line and ensure a productive work atmosphere. Your company needs to provide equity and be inclusive.
Ensuring an equitable workplace will help your company recognize roadblocks and biases employees might face. Understanding equity helps establish fairness and equal access to opportunity despite differences in race, sexual orientation, age, gender, ethnicity, religion, education, or other factors.
Equality is about giving every individual or group equal resources, while equity takes into account diverse circumstances and allocates resources needed to gain an equal result.
There are a number of factors that could influence a decision not to hire someone that aren’t exclusively based on their qualifications. It’s important to evaluate internally before the hiring process begins so you understand what biases may affect you or your company.
How Can Diversity Improve Sales?
A study by Forrester found that 60 percent of respondents believed diversity in their sales team aided in their team’s success. Here are some ways it can improve your bottom line:
1. Boost Employee Engagement
Improving employee engagement is a hot topic in the world of business today. U.S. companies lose an estimated $550 billion each year due to unhappy workers, making employee engagement crucial for your bottom line.
Maintaining energetic and engaged employees helps boost productivity, minimize turnover, improve profits, and contribute to a happy work atmosphere. How employees see their company’s diversity practices can influence their engagement.
Cultivating a safe and inclusive workplace will empower employees to converse freely and become more engaged in the company.
2. Improve Employee Retention Rates
Increasing employee retention and decreasing turnover should be a top priority for any business. It can cost a company between 1/2 to 2 times the annual salary of an employee to find a replacement.
When people enjoy their work, they tend to stay at a company longer. People tend to enjoy their jobs more when they feel like they’re learning new skills. Having a diverse team that gives people the opportunity to learn from each other will help your company retain quality employees.
It’s also important to ensure your company values are aligned with employees' ideals. Otherwise, employees may feel put off by working for an organization that doesn’t have the same moral compass as them and might seek employment elsewhere.
Clearly communicating your company’s ethics and objectives ensures employees that they work for an organization that stands for the same things they do.
3. Drive Innovation
Diverse life experiences, perspectives, and problem-solving skills among team members can foster inventive sales solutions and help avoid repeating common sales mistakes.
Sharing ideas and feedback with others who work and think differently than you can encourage innovation. Sales teams made up of individuals with varied thought processes and work experiences will bring a wider range of perspectives to more problems.
However, diversity among team members alone is not enough to aid in new innovations. Diverse leaders also are needed to give teams a new perspective on problem-solving, lead them to sales solutions, and help them develop the sales skills every salesperson needs.
A survey by Harvard Business Review showed that with a lack of diverse leadership, women are 20% less likely than straight white men to receive support for their ideas, people of color are 24% less likely, and LGBTQ+ employees are 21% less likely. This lack of support for a wider range of ideas can cost companies valuable expertise.
4. Increase profits
Having people from diverse backgrounds on your sales teams will give your company better insights into a broader range of customers.
The HBR study found that diverse sales teams had 45% more growth in market shares and were 70 percent more likely to reach a new market.
Diverse groups also aid in improving retention, engagement, and innovation. These positive influences will likely increase profits.
5. Cultivate Professional Development
A team with a fusion of acquired (varied life experiences) and inherent (gender, race, sexual orientation, etc.) diversity can help everyone absorb new knowledge.
Working with diverse peers who approach problems differently is a valuable experience that helps employees grow personally and professionally. When teams are stagnant and have little contrast in thinking, issues generally aren’t approached in a new way, and employees don’t learn creative methods of problem-solving.
Alternatively, learning a variety of sales methodologies and strategies from different view points can help diversify an employee’s professional mindset and help them succeed in their career path.
6. Improve Customer Opinion
Proactive sales tactics improve customer experience, like the way link-building outreach can help warm up sales prospects with content marketing. Diversifying your sales team will help you understand a broader market.
Diverse sales teams can have a better understanding of a wider range of customer needs, improving and creating better products that work for more people.
Bringing fresh ideas to the table by adding new valuable life experiences to a team brainstorming session can help provide better support in the customer journey and help you address customer pain points.
A customer's perception of a company can influence their opinion and buying practices. It’s important to be transparent and open about company values and DEI practices in order to give customers a clear understanding of your company's ethics.
Inclusive Companies vs. Non-Inclusive Companies
There are many benefits of working at an inclusive company versus a non-inclusive one.
Working in an open and accepting work culture where employees feel like they don’t need to disguise key characteristics that make them who they are can boost employees’ mental and physical health, helping them be happy, more productive workers.
People will enjoy going to work more, take more pride in their work, and are 5.4 times more likely to stick with the company when it's more inclusive.
A study discovered that companies reporting the highest racial diversity made nearly 15 times more sales revenue on average than companies reporting the lowest racial diversity. And companies with the lowest gender diversity had sales revenues of about $45.2 million, compared to sales averaging $644.3 million among companies with the most gender diversity.
Not only are inclusive companies healthier places to work, but they also outperform non-inclusive companies.
How to Implement DEI Practices
When applying DEI practices in an organization, it’s vital to avoid performative allyship and other poor diversity, equity, and inclusion practices.
Here are a few ways to ensure your company is approaching diversity properly.
1. Lead by Example
Performative allyship is when a company makes a public display of support for marginalized groups but does not act on their words.
When leaders give the “illusion of inclusion” without making a conscious effort to ensure their teams are inclusive and equitable, it can do more harm than good. It creates a disconnect between company leadership, biased individuals, and underrepresented employees.
Performative allyship can embed itself at the leadership level, conveying the message throughout the company that it’s okay to show an inclination toward equality — but that it isn’t important enough to act on the concern.
When this point of view becomes systemic, marginalized employees are likely to suffer on a structural level, even being subjected to micro-aggressive reactions throughout the company.
This lack of effort portrays inauthenticity and leads to a loss of engagement, lack of innovation, higher attrition rates, and a decline in overall sales.
Not only is it beneficial for a company to have diverse leadership, but leaders should aim to create a workplace that is more inclusive for everyone by listening to and learning from their employees.
2. Reduce Pushback
DEI initiatives have become more widespread due to social change and current data. However, pushback has also gained traction within many companies.
According to Gartner, about 44 percent of employees believe a substantial number of their peers feel alienated by the DEI efforts within their company, while many employees report their colleagues view DEI initiatives as divisive.
Addressing resentment and pushback can be difficult. But if it isn’t dealt with, an organization will lose progress, and harmful behavior or backlash toward marginalized groups could result.
An inability to mitigate pushback can create a toxic work environment that will lead to high attrition rates and loss of productivity. Understanding how some of your employees may see DEI practices as a threat can help you alleviate pushback.
Mandatory DEI training can create more pushback and drive employee disengagement. Instead of making classes mandatory, share the benefits of DEI training with employees, provide data that shows the benefits, and invite them to learn more.
DEI training shouldn’t feel like punishment or disciplinary action, but a method to help support colleagues and the overall well-being of the company.
When there are copious amounts of pushback within a company, it can be difficult to carry out DEI training. It may be necessary to provide a class for the dominant racial group that is moderated by professionals. This permits the dominant group to ask questions openly without causing harm or burdening marginalized employees.
3. Acknowledge and Understand Bias
Everyone has biases. For a healthy work environment to thrive, it’s key to understand the types of bias in the workplace. Gaining an understanding of our own biases is an important part of becoming emotionally intelligent human beings.
Both obvious and obscure forms of bias can disseminate throughout a company, impacting many processes, such as job evaluations or recruitment.
Training can be beneficial in transforming the negative environment biases create. Try offering classes like:
- Microaggression awareness training
- Emotional intelligence training
- DEI basic training
- Inclusion training
- Unconscious bias training
4. Use Data
Utilizing quantifiable data can help your business gain an understanding of the issues it faces in solving DEI problems.
It can be easy to falsely assume sincere conversations are enough when addressing DEI issues. However, it’s important to understand definable problem areas when facing DEI shortcomings.
Gain insight and diversity data regarding recruitment, attrition, performance assessments, and leadership roles to help your business understand where the problem areas might be.
5. Listen to Employee Feedback
Gain measurable data on how your company's DEI practices are doing. You can do this by administering surveys and gaining feedback from your employees.
Pinpoint problem areas by executing DEI-specific surveys, employee experience surveys, anonymous team questionnaires, employee engagement surveys, performance reviews, quizzes, and pulse surveys.
Employee resource groups (ERGs) are employee-led committees that work to nurture a diverse, inclusive workplace that works alongside the company’s values. Assembling ERGs and learning from their feedback is key to understanding problem areas.
Supporting DEI Efforts is An On-Going Process
Applying DEI strategies successfully can be tricky. While hiring diverse team members can create short-term momentum toward improvement, recognizing and adjusting long-term issues will help employees succeed and maintain an effective DEI program in the future.
When underlying biases within a company aren’t tended to first, the company will drift back into the same mistakes, eliminating progress in inclusivity and equity. Addressing and solving these root biases, whether on the individual or systemic level, will help your employees flourish and make it easier to appeal to new talent.