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What is Cultural Diversity and Why Does it Matter?

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min read
August 21, 2023

You want to empower your employees to do their best work. And part of that empowerment is creating an environment that fosters collaboration, encourages new and different ideas, and makes everyone feel safe and supported while they’re at work.

And in order to create that environment, you need to embrace cultural diversity in the workplace.

Cultural diversity (also known as multiculturalism) is a must if you want your employees and your organization to succeed. But what is cultural diversity? Why is it so important? And what steps can you take to not only create a more diverse workplace, but create space for different cultural expressions, celebrate your employees’ cultural differences, and truly empower your team to do and feel their best at work, no matter what cultural groups they may claim?

What Is Cultural Diversity?

First things first—before we talk about how to embrace cultural diversity in the workplace, let’s quickly cover what, exactly, cultural diversity is.

Sociologist Dr. Caleb Rosado, a leading expert in multiculturalism, defines cultural diversity as “…a system of beliefs and behaviors that recognizes and respects the presence of all diverse groups in an organization or society, acknowledges and values their socio-cultural differences, and encourages and enables their continued contribution within an inclusive cultural context which empowers all within the organization or society.” 

Essentially, cultural diversity is about bringing people together from a diverse set of backgrounds and cultures, then creating an environment that not only recognizes the differences between those cultures and backgrounds, but celebrates them. It helps create a space for people to be authentically themselves.

The term "cultural diversity" includes a broad spectrum of groups or categories. These include:

Contrary to what most people assume, cultural diversity in the workplace is about more than just race. It’s about owning and celebrating each and every way we differ from one another. And while race is certainly an important component of diversity, it’s not the only one—nor should it be the sole focus.

Why Is Cultural Diversity so Important in the Workplace?

Now that you understand what cultural diversity is, let’s jump into the importance of cultural diversity in the workplace.

There are a huge number of benefits of cultural diversity, both from an employee and an organizational perspective, including:

A More Inclusive Work Environment

If you don’t have a variety of people working in your organization, it can cause certain people to be isolated; for example, if someone is the only person from certain ethnic groups (like Asian, Latinx, or African American), or the only woman, or the only person with a disability that works for your company, they may feel uncomfortable or singled out.

This could lead them to feel less engaged with their job and the organization as a whole—and could lead them to look for another opportunity, causing issues with employee retention. When your organization is culturally diverse and your team is made up of people from diverse backgrounds, diverse cultures, and diverse groups, you have more types of people represented—which can make for a more inclusive environment for all.

Opportunities for Learning and Growth

Growth doesn’t happen in an echo chamber. If you’re only surrounded by people who look, think, and come from the same cultural backgrounds as you, you’re likely to have a fairly limited perspective. When your organization embraces diverse cultures, it exposes everyone to people with different perspectives, backgrounds, and experiences.

This can help everyone to grow, challenge their biases and stereotypes, learn from each other, and develop broader and more well-rounded worldviews—which can ultimately drive better business results.

For example, as diversity drives growth within your team, your employees will be able to better understand and empathize with different types of people—including your customers, which can lead to better customer service and higher customer satisfaction levels.

Diverse Groups Bring Diverse Ideas to the Table

From an organizational perspective, the more diverse your workforce, the more room there is for innovation.

Think about it: When you get different people together under one roof, you're going to get a massive mix of ideas and viewpoints. People with different backgrounds might have completely different ways of tackling a problem. What does that ultimately lead to? Innovative products, strategies, and tactics, which can give you a competitive edge on the market.

Having a team that's as diverse as the customers you're trying to reach is also a big win. An employee from Tokyo, for example, might have a better idea of what will fly off the shelves there.

Or having women on your team designing female running shoes, for example, could give you better insight into what your target audience actually wants from your products.

At the end of the day, diversity breeds open minds and broader ideas. If you embrace it, it could become your secret sauce to success.

10 Steps for Fostering Cultural Diversity in the Workplace

You know what cultural diversity is. You know why it’s important. Now, let’s cover how to embrace cultural diversity in the workplace—and ensure that all your employees have the space, tools, and training they need to work together effectively. Here's a step-by-step guide to get you started.

Step 1. Revamp Your Hiring Processes

It sounds obvious, but diverse companies are made up of diverse people. So, if you want to create a more diverse workplace? It starts with the people you hire.

Evaluate your current staff list. Is there a truly diverse set of people represented? For example, do you employ both men and women—as well as people who identify as LGBTQ+? Do you have a high percentage of employees from different ethnic backgrounds—or is your team disproportionately white? Do you have everyone from Gen Z to Boomers on your team—or are most of your employees under the age of 30? Ask yourself the hard questions and examine your current employee count to identify the gaps.

If you realize you’re lacking diversity on your team, it’s time to look at your hiring practices—and find ways to bring more diverse talent into your organization. For example, if you find that your organization lacks racial diversity, you might have your recruiters host an event at a university with mostly BIPOC students. If you don’t have any women on your engineering team, you might set a benchmark for your recruiters—and let them know that they’ll need to bring in a certain percentage of female (or female-identifying) candidates for all new engineering roles.

Step 2. Audit Your Hiring Materials

While you’re evaluating your hiring process, it makes sense to run through your hiring assets in detail. Take the time to review the documents you use for recruiting. Look for any language that could be interpreted as male-centric, homophobic, racist, ableist, or otherwise exclusive—and make changes accordingly.

For example, if your job postings are filled with male-centric language (like "he" instead of "they") or use male-oriented adjectives such as “killer instinct” or “aggressive,” you could be giving off the impression that your company is only looking for men.

If you're not sure where to start, the Harvard Business Review has a helpful guide on inclusive language in recruiting, as well as guidance on other ways to make your hiring materials more diverse and inclusive.

Again, don’t be afraid to interrogate your materials and bring in a few opinions to truly help you analyze them as objectively as possible.

Step 3. Hire a Diversity Consultant

If you're not sure how to make your hiring process more inclusive, or if you need help auditing your recruiting materials and policies, consider hiring a diversity consultant.

They are experts in inclusion—and can help you identify the areas where your company is falling short, as well as provide guidance on how to move forward.

Since it can be hard to recognize our own biases and blind spots, working with a consultant can be a great way to get an outside perspective and ensure that you're doing everything you can to create a more diverse workplace.

The point is, you can’t build a more culturally diverse workplace if you’re not focused on diverse hiring practices—so if your organization isn’t as diverse as you want it to be, start with revamping your hiring practices.

Step 4. Evaluate Your Policies and Procedures

Your company's policies and procedures can have a big impact on diversity, so it's important to make sure they're not inadvertently excluding or offending some employees.

For example, if your dress code is overly formal, it could discourage employees from expressing their gender identity. Or if your paid time off policy isn't generous enough, it could make it difficult for employees with families to take the time they need.

To make sure your policies are as inclusive as possible, take some time to review them—and look for any areas that could be improved. The Equal Employment Opportunity Commission (EEOC) has a great guide on developing non-discriminatory workplace policies that can be valuable to refer to during this process. Your new diversity consultant can also be a helpful resource.

Step 5. Increase Cultural Competency

People from different cultural backgrounds may have different ideas or cultural expressions around work. And, in order for teams to do their best work, it’s important for leaders to identify those differences around work—and create a space for those differences to effectively co-exist. 

This concept is called cultural competence—the ability for people from different cultural groups (and with different cultural ideas) to be able to work together effectively. And if you want to empower diverse teams’ best work, it’s important to make cultural competence a priority within your organization; otherwise, it can lead to conflict and challenges within the team.

For example, let’s say your company currently employs people from six different countries—all of which have different attitudes and beliefs around work. If you just throw those people on a team together without any training or support, those different attitudes and beliefs can cause conflict. For example, let’s say it’s the norm in country A to create a clear boundary between work time and personal time—while it’s commonplace in country B to develop friendships with your coworkers outside of work. Without the proper context or training, employees from country B might be offended when employees from country A decline their invitation for an after-work get together.

Or let’s say country C recognizes more religious and cultural holidays than country D. If employees from country D see employees from country C getting more time off—without understanding why—it may lead to resentment.

So, how do you create more cultural competence within your organization and ensure your team can work together effectively, productively, and harmoniously?

The right training.

Diversity training is a must if you want to create cultural competency within diverse teams. Training on cultural differences—and how to effectively navigate those differences—will give your team the understanding they need to effectively collaborate with their co-workers and do their best work. (For example, training on how to avoid microaggressions can help employees avoid miscommunications—and avoid offending or upsetting their co-workers.) Depending on your organization and the kind of diversity training your team needs, you could have human resources spearhead your training program or bring in outside educators to help your team thrive in a diverse workplace.

Step 6. Provide Unconscious Bias Training

Unconscious bias is a major problem in the workplace—and it's something that can unintentionally impact your ability to create a diverse and inclusive environment.

If you're not familiar, unconscious bias is when people make judgments or assumptions about others based on their own personal biases and beliefs—and these biases can often lead to discriminatory behavior, even if we don't mean to.

Unfortunately, unconscious bias is something we all struggle with—which is why it's so important to provide training on the topic. This education can help employees learn more about their own biases, as well as how those internal thoughts and ideas can impact the workplace. And once your team knows about their biases, everyone can take steps to start overcoming them. 

Step 7. Celebrate Your Employees’ Cultures

Cultural diversity isn’t just about recognizing cultural differences; it’s also about celebrating them. So, if you want your employees to feel seen, appreciated, and safe at work? Celebrate their cultures in any way you can.

For example, don’t just host celebrations for commonly recognized holidays in the United States (like Christmas or the 4th of July); instead, host celebrations for any holiday one or more of your employees celebrates (like Juneteenth, Chinese New Year, or Pride Month)—and give them the opportunity to help plan the celebration and, if they feel comfortable, educate their coworkers about the holiday and its cultural background. Or, instead of catering lunch from the same sandwich shop every week, try ordering from restaurants that reflect the dishes of your employees’ cultures. 

The point is, celebrating your employees’ cultures shows them that they’re valued for who they are, where they come from, and what they bring to the table—and it’s a key part of creating a truly diverse workplace.

Step 8. Don't Overlook Socioeconomic Differences

Socioeconomic status is another important factor to consider when creating a diverse and inclusive workplace. Employees from different socioeconomic backgrounds may have different ideas or expressions around work—and, if not properly addressed, those differences can lead to conflict within the team.

For example, let’s say you have two employees: one comes from a lower socioeconomic background, and one comes from the upper class. The employee who is used to not having much money might be used to working long hours for little pay, while the employee with a more privileged background might be used to having more free time and higher pay. If those expectations are not properly managed, it can lead to conflict and frustration on both sides.

So, how can you create a more socioeconomically inclusive workplace?

By being aware of the issue and making an effort to address it. Make sure you’re considering this status when you’re creating teams, and be intentional about creating a mix of employees from different socioeconomic backgrounds.

It’s also important to be aware of the different expressions of work and compensation that come from different socio-economic backgrounds—and ensure you're helping manage those expectations.

And finally, don't forget to check in with your employees from different backgrounds to see how they're doing. Ask them how they're feeling about their work and their compensation. Make sure they feel like they're being treated fairly and respected—and that their voices are being heard.

Step 9. Ensure Your Benefits Package Appeals to a Diverse Workforce

Your benefits package can also be a great tool for attracting and retaining employees from diverse backgrounds. And while you might think your current benefits are top-notch, it’s important to make sure they’re appealing to workers from all walks of life.

For example, if you want to attract and retain employees who are responsible for caring for children or elderly family members, you might want to consider offering paid family leave or subsidizing child care costs. 

You'll also want to ensure your health insurance respects the cultural and religious beliefs of all your employees. For example, some cultures prefer alternative medicine to Western healthcare, for instance, so it’s important to make sure your health insurance covers a diverse set of practitioners. 

Additionally, you should consider mental health resources. According to the National Alliance on Mental Illness, people of color are more likely to experience anxiety and depression—so it’s important to make sure your employees have access to mental health resources that meet their needs.

Finally, remember that not all employees value the same benefits. So, instead of offering a one-size-fits-all benefits package, try to tailor your benefits to the needs of your employees—which will show them that you respect and value their individual needs.

Step 10: Create a Diversity and Inclusion Council

Establishing a diversity and inclusion council within your organization is a powerful way to keep the conversation on diversity alive and drive continuous progress.

This council should consist of a diverse group of employees from various departments, levels, and backgrounds. Their role would involve setting diversity and inclusion goals, tracking progress, and creating a place for employees to voice concerns or suggestions related to diversity and inclusion.

The council can also be responsible for organizing cultural awareness events, diversity training, and mentoring programs to help foster an inclusive workplace culture. They could also work closely with your Human Resources team to provide feedback on existing policies.

This shows employees that your business is committed not just in words, but in action, and that the goal is a collective effort based on the input of everyone.

It also serves as a constant reminder of the importance of cultural diversity in the workplace and ensures that it’s an ongoing focus rather than a one-off initiative.

Challenges to Creating Diversity in the Workplace 

Of course, there will always be challenges to creating a culturally diverse workplace. The key is to identify those challenges and make a concerted effort to rise above them.

To help you do that, let's examine some common challenges you could face and give you a plan of action for overcoming each one.

1. You Live in a Less Diverse Part of the Country

Not everyone lives in diverse New York City or Los Angeles. In fact, most people live in relatively homogenous areas, which can make it difficult to find employees from diverse backgrounds outside of their own culture.

If you live in an area with less diversity, there are a few things you can do to attract employees from different cultures:

Ultimately, while it might be more challenging to create a culturally diverse workplace if you live in a less diverse area, it’s not impossible. So, don’t let geographic location stop you from diversifying your team.

2. You Don’t Have the Budget to Make Changes

If you’re running your business on a tight budget, you might think you don’t have the resources to create a culturally diverse workplace. But, you don’t have to break the bank to improve your inclusivity and appeal to a wider range of employees. In fact, there are plenty of small changes you can make that will have a big impact, without costing you a lot of money.

As mentioned earlier, you can start by ensuring your job descriptions and advertisements are welcoming to all candidates. You can also review your hiring practices to make sure you’re not inadvertently excluding any groups of people.

In addition, you can find small, low-cost ways to make your workplace more accommodating to all employees. For example, you can take advantage of the diversity and inclusion training resources provided by the U.S. Department of Labor. Or you can create an employee-led taskforce on equity, diversity and inclusion.

Making these kinds of changes doesn’t have to be expensive—and they can go a long way in making your workplace more welcoming to employees from all backgrounds.

3. Potential Harassment Issues

Unfortunately, some people may try to take advantage of a more diverse workplace by harassing or discriminating against employees from underrepresented groups. That’s why it’s important to have a clear policy in place that prohibits harassment and discrimination in the workplace.

You should also provide employees with information about how to report incidents of harassment or discrimination, and make sure you have a process in place for investigating and addressing those reports.

Additionally, you should provide employees with regular diversity and inclusion training that covers topics like identifying and preventing harassment and discrimination. That's because someone may be doing something unintentionally, not even realizing it's a problem for their coworkers. Training can help employees identify these issues so they can avoid them in the future.

4. Communication Gaps

When employees come from different cultures, there is always the potential for miscommunication. For example, employees from collectivist cultures may be more likely to avoid conflict, while employees from individualist cultures may be more likely to speak up when they have a problem.

To help prevent miscommunication, you should make an effort to learn about the various cultural backgrounds of your employees. You can do this by attending cultural events or celebrations, reading books or articles about different cultures, or even just asking your employees about their backgrounds.

Additionally, you should promote open and honest communication in your workplace. Encourage employees to speak up if they have a problem or concern, and make sure they feel comfortable doing so.

You can also create opportunities for employees from different cultures to interact with each other, such as through employee resource groups or team building activities.

5. Hiring Just for Diversity's Sake

While you want to create a diverse team, it’s important to avoid the temptation to hire employees solely for this purpose. Not only is this practice unethical, but it can also backfire and create tension in the workplace if your team feels like an unqualified person was hired just to meet a quota.

So, when you’re hiring new employees, focus on finding qualified candidates who also happen to be from underrepresented groups. Or offer additional training or mentorship opportunities to employees from these groups to help them develop the skills they need for a particular role.

This will help ensure that your workplace is truly diverse and inclusive, and that your team has the skills and knowledge it needs to be successful.

6. Assuming Employees from the Same Culture Want the Same Things

One of the biggest mistakes you can make in creating a diverse workplace is assuming individuals from the same culture want the same thing. Just because employees are from the same culture or background doesn’t mean they have the same needs or preferences.

For example, you might assume that all employees who share a particular cultural heritage want the same type of food in the cafeteria or the same type of music playing in the office. But that’s not always the case. Some employees might prefer traditional foods, while others might prefer more modern or Westernized options.

Additionally, you might assume that all employees from a particular culture are comfortable with the same level of physical contact, such as hugging or shaking hands. But again, that’s not always the case. Some employees might prefer not to have any physical contact at all, while others might be fine with it. 

To avoid making these types of assumptions, you should ask employees about their needs and preferences. This can be done through surveys or one-on-one conversations.

By taking the time to learn about the individual needs and preferences of your employees, you can create a workplace where everyone feels welcomed and valued.

7. You’re Not Sure How to Get Started

These changes can seem so daunting, you may not know where to start—and that’s okay.

The key is to start small and focus on one area at a time. And, remember that you don’t have to walk this journey on your own. There are plenty of resources out there to help. 

For example, the U.S. Equal Employment Opportunity Commission (EEOC) has a Small Business Resource Center that can help you understand your obligations under the law and develop policies and practices to prevent discrimination.

And the U.S. Department of Labor’s blog has several helpful articles on diversity and inclusion in the workplace, including tips on how to create a more diverse workforce.

In addition, there are plenty of consultants and diversity experts who can help you assess your workplace and make recommendations for change. While you might have to pay for these services, they can be a valuable investment if you want to create a lasting culture of inclusion in your workplace.

You can also reach out to other business owners for advice. Many companies have already gone through the process of creating a more diverse workplace, and they’re usually happy to share their experience.

Creating a culturally diverse workplace can seem like a daunting task. But it’s important to remember that every journey starts with a single step. So take the first step today and begin creating a more inclusive workplace for everyone.

Embrace Cultural Diversity at Work

A diverse workforce is a major benefit to your organization; bringing together people from different backgrounds and cultures can help drive innovation, foster new ideas, and create a work environment that values equality, respect, and collaboration. And now that you know how to create a culturally diverse workplace—and foster the cultural competence necessary to empower your team’s best work—you’re armed with all the information you need to make cultural diversity a priority at your organization.

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