What Is the Role of Diversity as Competitive Advantage?

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  • Written By: Esther Ejim
  • Edited By: Kaci Lane Hindman
  • Last Modified Date: 14 September 2019
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With the growth of globalization, workplace diversity is a factor that employers can no longer choose to ignore. Diversity may include aspects like the ratio of employees categorized by gender, religion, race or even sexual orientation. The role of diversity as competitive advantage is dependent on the willingness and the ability of the management of an organization to utilize the diversity of its workforce as a source of competitive advantage rather than a source of divisiveness. Not only does workplace diversity serve as a microcosm for the society at large, but the role of diversity as competitive advantage is the increase in productivity caused by an atmosphere of inclusiveness in the company. Also, the role of diversity as competitive advantage is the ability of companies to be able to select the very best talent or employees with good human capital from an available pool.


When a company embraces the concept of workforce diversification, it can leverage this as a basis for competitive advantage through its perception by the public as an equal opportunity employer. For instance, a country with a mixture of diverse immigrants will have a greater point of contact with the members of the community if the company has an adequate representation from most of the major immigrant and local community members. If the community has a substantial percentage of Hispanic immigrants, the company will have a more personal relationship with the Hispanic members of the community as well as other members. This can serve as competitive advantage, because the company in question can use this selling point as an advantage over other businesses that are more exclusive in their employee selection.

The effect of globalization also means that the very best talent is more likely to come from diverse backgrounds and orientation. A company that has a very high percentage of male employees in key positions may benefit from diversity through the employment of the top female graduates in related fields of study. This serves as a competitive advantage since it also creates the impression that the company only hires the best, regardless of gender.

Perhaps, the most important role of diversity as competitive advantage is the fact that it can foster a feeling of inclusiveness among the employees, boosting their morale as well as increasing their productivity and also the bottom line. A company that has a diverse workforce creates a sense of belonging among the employee who have a greater sense of belonging than one where there is a disparity in the employee demographic. Where this is the case, employees will have a greater sense of purpose and also an incentive to work harder.


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