What Types of Costs Are Saved If Diversity Is Successfully Addressed in the Workplace?

Managing diversity has an indirect effect on the bottom line.
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Over the years, diversity has evolved from a social buzzword to an everyday occurrence. No longer considered a human resource issue, companies are embracing diversity as a means to increase productivity and growth. Embracing cultural differences and encouraging collaboration results in a synergistic effect, that ultimately makes a company stronger. Managing diversity skillfully results in rewards for a company and its employees. Companies that have successfully integrated diversity programs into the workplace reap the benefits on their bottom line.

Turnover Costs

    Recruiting and hiring talented workers is a major expense for many companies. One way to lower this expense is to hang on to the employees that they have. Skillfully addressing diversity issues helps retain employees who may otherwise feel marginalized or discriminated against. The second way to lower turnover is to bring diversity into hiring practices. Having a diverse workforce results in greater creativity and inclusiveness. It also makes a company more global in nature, which attracts even greater talent.

Litigation Costs

    Managing diversity effectively results in fewer lawsuits filed by employees for violation of civil rights. Companies without policies or training on diversity are taking a great risk. Coca-Cola learned this lesson back in 2005 after paying out over $200 million in discrimination settlements. Now the company has a diversity task force and is dedicated to hiring more minorities in management. Companies may think that diversity training is too expensive or not needed, but a civil rights lawsuit will make diversity training seem like peanuts after all of the legal fees are factored in.

Marketing and Branding

    When a company’s employees reflect the customer base, the company gets an indirect boost; the employees better relate to the customers because they are the customers. For example, DuPont Merck saw an increase in sales of an anticoagulant drug in the Hispanic market after a Hispanic manager suggested including Spanish instructions on the label. That small change improved sales dramatically. It is not only race that plays a part but age and religion as well. Diversity in a company allows for a dissemination of different ideas that reflect the community and the country.


    No matter what type of business you are in, increasing productivity in employees is good for the bottom line. Research shows that happy employees are productive employees. When morale is high, people show up for work on time, they are absent less, and they do not spend the day griping at the water cooler. Managers who adopt an attitude of not confronting employees when they are making mistakes because they are afraid of being seen as racist, end up helping no one. The employee never improves and may even feel that the manager is slighting them, making the situation worse. Handling diversity issues head-on and not adopting a color-blind policy helps make employees comfortable, happy and, by extension, more productive.

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