Is your organisation ready for tomorrow's cultural diversity?

Key insights

  • Culturally diverse organisations deliver better financial performance than their less culturally diverse peers.
  • Cultural diversity, if well managed, offers organisations five major advantages: (1) an asset in the war for talent, (2) a stronger customer focus, (3) more innovation, (4) greater employee satisfaction and (5) a positive image as a socially responsible workplace.
  • Our society is becoming increasingly culturally diverse. In a multicultural society, organisations that are preparing to take full advantage of the international talent pool or are already doing so will have a competitive advantage. Practical toolkits for newcomers and businesses will help them get off to a flying start.  

Research by McKinsey shows a correlation between ethnic or cultural diversity in managerial positions and financial performance. Organisations in the top quartile in terms of cultural diversity are 33% more likely to have above-average profitability than their peers in the lowest quartile. Conversely, organisations in the lowest quartile perform less well: they are 29% more likely to be less profitable than their peers in the other quartiles. The message is clear: cultural diversity pays!

Although our society is becoming increasingly diverse, this diversity is not always reflected in our companies. There is still an employment gap between newcomers and people of Dutch origin. This gap is more pronounced for the low-skilled than the more highly educated - 19% versus 11%. How can we ensure that companies and newcomers manage to find each other? Vlerick Business School and Talentree have joined forces and developed some practical toolkits. We asked Vlerick professor Dirk Buyens and Hannelore Waterschoot, founder and managing partner of Talentree, to tell us more.

The project team followed 35 newcomers, all highly educated non-native speakers, in their search for a suitable job – from the initial interview to their first months at work. “This enabled us to experience for ourselves which support would be useful. Companies and organisations that are considering attracting culturally diverse talent and/or that are already focusing heavily on cultural diversity and inclusion participated in focus groups, interviews, workshops, dry runs and coaching sessions, giving us insights into the perspective of employers,” says Dirk. “We also consulted experts, employment and networking organisations and representatives of local and international projects.”

Five good reasons to choose cultural diversity

“Research has shown that cultural diversity in organisations and companies, if well managed, has a positive impact on five important aspects of their performance,” says Hannelore, “and these benefits also came to the fore in our focus groups.” 

An asset in the war for talent
“As an organisation, if you want to win the war for talent, you will definitely have an advantage if you focus on cultural diversity and inclusion,” asserts Dirk. “Not all expertise can be found locally, as some companies told us, and because they want the best talent they are looking worldwide. In addition, and this is at least as important, if your employer brand radiates cultural diversity you will appeal to a larger talent pool and have a better chance of attracting the right people, which is crucial given the shortages on the labour market.”

Stronger customer focus
It is not only employees but also customers who want to be able to identify with your organisation and its products or services, and the customer base of most companies is becoming more culturally diverse (as is our society). “For example, Hello Customer told us that although diversity does not feature on their strategic agenda, international growth does. And this growth is achieving by building an international team, who can better understand needs in different contexts,” explains Hannelore.

More innovation
Research has shown that (cultural) diversity can promote creativity. Hannelore: “Our focus groups included some organisations that deliberately set up culturally diverse teams to promote an entrepreneurial and innovative culture, while other participants attracted international talent that led to more culturally heterogeneous teams. They note that, quite unexpectedly, they have become more innovative – the discussions are more creative and go in directions that they could never have imagined before.”

Greater employee satisfaction
Research has shown that cultural diversity can increase employee satisfaction. “For one of the participants, a large consultancy company, this was an important reason to make an effort in this area,” says Dirk. “Millennials who opt for an international organisation said that they expected to end up in a multicultural team. The same applies to their customers: on international projects, they prefer to see a multicultural team. So for this company, customer orientation was a second, immediately apparent reason to choose cultural diversity.”

A positive image as a socially responsible company
Both potential employees and customers expect an organisation to act in a socially responsible manner, and cultural diversity and inclusion are inextricably linked with this. “Ghent City Council is a good example,” smiles Hannelore. “They wish to represent all our citizens, which is why at least one third of the influx of new employees must be of foreign origin by 2020. After all, Ghent is a great example of a multicultural city. Accenture is another example. They are already international, they said, but they also want to make sure that certain minority groups don’t drop out. This is why Accenture recruits a number of atypical profiles each year and has developed various aspects in very concrete terms, including for highly-educated newcomers.”

Practical toolkit as a solution

Dirk emphasises that cultural diversity in itself has no added value. “Only if it is well managed, and if it is the result of a strategic approach, can it have a positive impact on performance. Research shows that heterogeneous teams don’t perform as well as homogeneous teams if they are not properly supervised.”

To help companies move towards a successful multicultural organisation, a business toolkit has been developed with four guides that answer the four key questions raised by the focus groups and interviews:

1. How do you put cultural diversity on the agenda?
The first guide helps to develop the business case for cultural diversity: it contains facts and figures and explains how cultural diversity offers a competitive advantage.

2. If you have opted for cultural diversity, how do you establish a solid foundation so that this diversity also creates financial and organisational added value?
A second guide focuses on the critical success factors of a culturally diverse organisation, a step-by-step approach to implementing an inclusive organisation and ways to raise awareness of unconscious bias.

3. How do you attract culturally diverse talent?
A third guide helps companies to attract more culturally diverse talent by explaining how to set up an inclusive recruitment process and address bias during recruitment and selection.

4. How do you manage multicultural teams?
A fourth guide explains how to set up and manage culturally diverse teams and how to give new employees with a different cultural background a good start.

The toolkit is modular, as an organisation that is taking its first steps towards cultural diversity and inclusion obviously needs different support than a company that has already recruited several newcomers. Each guide contains a wealth of practical and strategic information, concrete advice and tips, business cases and testimonials. All the toolkits are also more widely applicable: most of the insights and exercises can be extended to diversity in general.

“Of course,” adds Dirk, “what we’ve also done, is put together a toolkit with information guides to support the newcomers at the various stages of the recruitment process. These guides familiarise them with the Belgian labour market and provide cultural tools: how do we approach work here? What can and can’t you do during a first job interview? And so on. In short, a lot of implicit knowledge is made explicit by means of texts and exercises.”

Practice makes perfect

“Every business guide should have a training module,” adds Hannelore, “a series of PowerPoint presentations with explanations and exercises that help people to consciously work towards an organisational culture that is inclusive and culturally diverse and that also incorporates new skills for managers, such as intercultural thinking, awareness of unconscious biases and stereotypes and building trust.”

She continues: “Like the guides, we tested the training modules during several dry runs at large and small organisations including BASF, Ghent City Council, Telenet and Voka. The feedback from the participants was extremely positive.”

Life on the fast track

“Setting up and managing a culturally diverse organisation requires extra focus and a strategic plan, and therefore a certain amount of effort,” says Dirk. “But you can't help but notice that the talent of today and tomorrow is super-diverse and that the inflow will only become more diverse. Anyone who is preparing to take full advantage of the international talent pool or is already doing so will have a competitive advantage over organisations and companies that are not actively engaging in cultural diversity,” he concludes.

What are you waiting for?

All the toolkits are available free of charge. Although they can be used completely independently, we can also facilitate the training modules for organisations upon request.
The NiMAP project (Newcomer Induction Management Acceleration Programme) received financial support from the European Social Fund and the Flemish Government.

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