Benefits and Challenges of Cultural Diversity in the Workplace


We are surrounded by cultural diversity in our daily lives, from global product trends and cuisines to our populations. Even our workplaces are culturally diverse. In fact, cultural diversity in the workplace drives innovation, creative thinking, and offers new perspectives to challenges. 

Not only does workplace diversity offer great benefits for innovation and our taste palettes, it is also an important social issue. Employees, customers and partners hold businesses accountable to play their part in overcoming these issues. A company must prioritise a culture of inclusivity and diversity or risk their reputation.

Let’s explore some of the unique benefits and challenges for cultural diversity in the workplace.

What is Cultural Diversity in the Workplace?

Our culture shapes our beliefs, behaviours and identity. Culture is typically described as a shared language between people. It includes values, religions, norms, ideas and objects that pass from one generation to another. 

When we refer to cultural diversity in the workplace, we are talking about the range of people from different backgrounds and generations and different ethnicities and genders. Cultural diversity encourages an inclusive environment with people from various backgrounds that work together and improve team productivity and cohesion

Why is Cultural Diversity Important in the Workplace?

Cultural diversity is important in the workplace for a variety of reasons. Firstly, a culturally diverse workplace enables employees to learn new talents and expertise from others. The range of skills, capabilities and ideas offered by workplace diversity also boosts creativity and innovation and provides fresh perspectives to problem-solving. 

Furthermore, employers that prioritise diversity and inclusion (D&I) outperform their competition by respecting the needs and perspectives of their unique team members. Doing this also earns the respect and trust of their employees, contributing to high levels of commitment and happiness.

Ultimately, businesses benefit from the different perspectives that workplace diversity and inclusion offer, which increases team productivity, employee happiness and innovation and boosts the bottom line. 

3 Benefits of Cultural Diversity in the Workplace

Workplace diversity offers many immediate and tangible benefits to businesses and their employees. Research demonstrates that cultural diversity significantly impacts the bottom line as it contributes to several high-level goals such as increased innovation and productivity.

The top three benefits of cultural diversity in the workplace include:

  1. Drive innovation and creative thinking
  2. Builds a great reputation
  3. Boots the bottom line

Drive innovation and creative thinking
Cultural diversity in the workplace breeds creative thinking and innovation. Multiple perspectives, experiences and personalities lend themselves to out-of-the-box thinking and offering new solutions to old problems.

Builds a great reputation
Another benefit of cultural diversity in the workplace is the creation of a positive reputation. A diverse team of people from different backgrounds and cultures helps organisations better serve and assist their equally as diverse customer base. Creating a reputation of inclusion also lends itself to attracting top talent and retaining staff. Potential employees search for companies that accept and tolerate all backgrounds and cultures who treat their employees fairly and equally.

Boosts the bottom line
Studies show that workplace cultural diversity positively impacts the bottom line. For example, McKinsey found that companies with the most ethnically and culturally diverse boards are 43% more likely to experience higher profits. Multiple factors may contribute to greater profits, such as more productivity, increased innovation, company reputation and staff retention. Building an inclusive company culture could significantly boost the bottom line.

3 Challenges of Cultural Diversity in the Workplace

Bringing a diverse group of people together can lead to some challenges. Let’s explore the challenges of cultural diversity in the workplace. The top three challenges of cultural diversity in the workplace include:

  1. Communication issues
  2. Overload of opinions
  3. Cultural misunderstandings

Communication issues
Communication between team members can become challenging in a culturally diverse team. There may be many team members who do not use English as their first language. Your team encounter language barriers, such as different communication styles or preferences. These language barriers can prevent individuals from effectively communicating, leading to difficulty understanding one another and miscommunication. If your organisation fails to address and overcome these communication issues, it could lead to conflict and decreased productivity and synergy.

Overload of opinions
Cultural diversity in the workplace offers many differing opinions, driving innovation and creation. Diverse employees from different backgrounds and experiences have unique approaches to scenarios. While this is great for innovative ideas, an overload of views can also slow down decision making and progress. Ultimately too many opinions can lead to failure to reach a consensus. Appointing a final decision maker who can consider all ideas and move forward will ensure all employees feel valued and that the team progresses.

Cultural misunderstandings
Although workplace diversity fosters a sense of belonging, it can also increase the chance of cultural misunderstandings. For example, giving the thumbs up, pointing with your index finger or patting someone on the back are offensive in other countries. Exhibiting gestures or saying something offensive in another culture can quickly lead to conflict and tension. These misunderstandings may stall innovation and hinder progress. 

Frequently Asked Questions

How to Promote Cultural Diversity in the Workplace

Promoting diversity and inclusion takes much more than policy and recruitment changes. There are many strategies you can use to promote cultural diversity in the workplace. Some of the top strategies include: 


Hire and promote leaders that truly understand the importance of diversity and inclusion. Leaders who promote cultural diversity create a safe space where employees from all backgrounds and cultures feel included.

Encourage Open-Mindedness

When meeting with new people or going into team meetings, try to avoid expectations and assumptions about others. Listening without judgement to new perspectives will help broaden your mind and worldview.

Create an Office Space for Employees to Express their Views Safely

Some businesses have designated prayer rooms or social groups to ensure their employees feel as though they belong. Your employees will feel themselves at work, feel as though they can express their views safely and openly and feel proud of who they are.

Conduct HR Surveys

Use HR Surveys and other tools to ask your employees how the company can improve and promote cultural diversity in the workplace. 

How to Implement Cultural Diversity in the Workplace

The key to implementing workplace cultural diversity is starting. The longer you wait, the more challenging it will become. Here are eight simple steps you can implement to create diversity and inclusion in the workplace.

  1. State your commitment to creating an inclusive workplace in your values and company communication.
  2. Convert job descriptions, policies and other documentation to gender-neutral language.
  3. Diversify your talent pool by actively searching for candidates across different cultures and backgrounds
  4. Use non-bias assessment technology such as cognitive ability tests and DISC assessment tools to help inform hiring decisions.
  5. Set expectations during the onboarding process about what an inclusive workplace looks like at your company. 
  6. Set standards and disciplinary actions for those who do not follow company expectations or disregard others backgrounds and beliefs
  7. Set up dedicated groups and spaces within the office so your employees feel encouraged to express themselves
  8. Celebrate holidays and important events from other cultures

Examples Cultural Diversity in the Workplace

Are you looking for some inspiration for creating inclusion and diversity in your workplace? Here are three examples from Australian businesses committed to creating a diverse workforce and celebrating people from all cultures, backgrounds and religions. 


Accenture is actively working towards creating a diverse workforce and a culture of inclusion. They have set achievable targets to achieve a 50-50 gender balance by 2025 and formed groups such as PrideAtAccenture ANZ to celebrate their community. 


Telstra strives towards creating a supportive and inclusive workplace. Their diversity and inclusion strategy centres around three areas, ensuring under-represented people are included in our workforce, creating inclusive teams and culture, and providing fair policies and processes.


EY, otherwise known as Ernst and Young, is committed to cultural diversity from its suppliers to its employees. EY actively foster a company culture of inclusion and diversity. EY advocates for LGBTQ+ issues and champions employment for people less able.