Diversity in companies: Why and how?

Why do companies need diversity?

Every person is different

Let’s start by defining what “diversity” actually means.
Because – spoiler – diversity is more than just sexual orientation and skin color.
To be more precise, there are seven dimensions of diversity.
These are almost unchangeable characteristics that every person has.
After all, each of us has a different personality and a different history:

1. Age
2. Ethnic origin & nationality
3. Gender & gender identity
4. Physical & mental abilities
5. Religion & worldview
6. Sexual orientation
7. Social background

According to the Diversity Charter, these seven diversity dimensions have the greatest influence on whether we feel included or excluded in society.
In theory, the Basic Law and the General Equal Treatment Act already stipulate that no one should feel excluded.
Diversity is also important for many companies in the context of sustainability reporting.

Diversity in the company is surveyed in the ESG report

Above all ESG regulations, the ESRS – the CSRD reporting framework – has required disclosure of the diversity strategy since 2024.
ESRS S1 in particular asks how your company lives and promotes inclusion and diversity.

However, diversity was already an ESG reporting criterion before that.The German Sustainability Code, or DNKemphasizes the importance of diversity and has included it in its 20 criteria for report content.
Companies must state how they comply with the General Equal Treatment Act.
They should also show how they promote equal opportunities, pay everyone appropriately, avoid discrimination, make a positive contribution to the integration of minorities and promote the compatibility of family and career.

Of course, the globally recognized reporting standard of the Global Reporting Initiative (GRI) also deals with the topic of diversity.
The focus here is primarily on GRI 405.
Here you report, among other things, on the distribution of gender, age or the proportion of people with disabilities among employees and management.
There is also GRI 406, which relates to incidents of discrimination and asks how your company investigates or prevents them.

Diversity in the company as a cross-section of society

The diversity dimensions also show how different we all actually are.
If we zoom out to Germany, we get an incredibly diverse picture of society.
Now a question for you: With this image in mind, is it close to reality if the company is made up of 80% white, 30 to 50-year-old, Christian or atheist, heterosexual men?
Or would it not be much better, conversely, if a company reflected the diversity of society?

Advantages of diversity in companies

Of course that would be much better.
And there is even solid evidence for this.
We have compiled a small selection for you below.

A study by StepStone and the Handelsblatt Media Group shows that a diverse management team boosts employee motivation.
According to the study, 77% of job seekers are also more likely to apply to companies that are tolerant and diverse.
Not to mention the fact that your company has access to a much larger talent pool if you value diversity when recruiting.

The survey also revealed that 80% of respondents see diversity in management as a major positive influence on the economic success of companies.
One of the reasons for this is that diverse teams bring a wide range of different experiences, perspectives, ways of thinking and problem-solving approaches to the table.
Incidentally, this also means that decisions are made up to 87% faster – and not only with half as many meetings as in homogeneous teams, but also with 60% better results!

Diversity in companies is also considered one of the most important drivers of team engagement. Deloitte found in a study that millennials are 83% more likely to be engaged when the company promotes diversity and inclusion.
No wonder none of the employees feel excluded!

In short: diversity in the company makes the company more attractive, increases employee satisfaction and productivity – and ultimately strengthens competitiveness.
According to another Deloitte study, diverse, inclusive companies perform up to 35% better than their competitors.

Sounds good?
We think so too.
But you should be aware of this: If you want to reap the benefits of diversity, you need to promote diversity in a targeted manner.
Here are a few practical tips from our People team to help you achieve this!

7 tips for diversity in companies

1. diversity starts at the top

Diversity in companies starts in the boardroom.
Make sure that the management team is diverse.
This involves obvious criteria such as origin, age or gender, but cognitive diversity also plays a role.
The management level should also exemplify diversity itself.
Train your managers to use inclusive language and promote a diverse workforce.

2. make job advertisements appealing to everyone

This starts with the classic “m/f/d” or “all genders” reference in the job advertisement.
You should also include a diversity statement that emphasizes once again that everyone is welcome here.
Use a gender decoder to check whether men and women feel equally addressed in your job advertisement – because certain words only address one gender.

Incidentally, it is also interesting to know how men and women read job advertisements.
Women tend to want to fulfill all criteria and often do not apply if they do not fulfill one criterion.
So find the right balance in the level of detail in the job description.
Feel free to encourage applicants with a separate note to apply even if they do not fulfill every single point.

Last but not least: Make sure to write the advertisement in a screen-reader-friendly way.

3. also live diversity in the recruiting process

Involve as many different employees from different departments as possible in your recruiting processes.
Not only the HR team, but also specialist departments or future colleagues and superiors.
On the one hand, you will notice more quickly who harmonizes well with the team and who is needed.
On the other hand, different perspectives ensure less bias and more openness to diversity.

Speaking of bias: offer recruiting staff regular recruiting and interview training.
These training sessions should identify and reduce potential bias (which we all have!).

Give all applicants a chance.
And don’t necessarily base your selection on who is exactly the same as the rest.
It’s much more exciting to see who would complement the team well. What skills, what personality, what character is still missing?

4. create guidelines on diversity

If you want to create more diversity in your company, you may have to adapt guidelines and processes.
As just mentioned, this starts with the job advertisement, which should not exclude anyone and should appeal to everyone.
Other options are

• Allow religious holidays that are not prescribed by law
• Offer childcare or establish partnerships with daycare centers
• Offer more paid sick days than required by law

5. offer flexible working time models

Remote working, part-time models and generally flexible working hours enable employees with children, for example, to juggle everything.
But employees with a different working rhythm also benefit from this.
This is because they can adjust their working hours to when they are most productive – within the framework of legal regulations.

A tip: Work with calendars and certain status options.
Anyone who has a blocker in their calendar or is not available according to their status should not be contacted or assigned tasks.

6. create a working environment in which everyone feels comfortable

Design the workplace in such a way that everyone feels comfortable and can work well.
This includes, for example

• Barrier-free design of the workplace, but also of the toilets or kitchen and – sounds obvious, but is rarely considered – the entrance to the company!
• Retreats or quiet zones for undisturbed work
• Options for individual ergonomic workplace equipment, especially at the desk

7. check the implementation of diversity and have an open ear

Make sure that diversity in the company is not just on paper, but is actually practiced in everyday life.
Make sure that all employees are aware of the guidelines and rights.
Provide (anonymous) surveys and feedback opportunities.

This means that anyone can submit suggestions for improvement, but also draw attention to discrimination and disadvantages.
The Whistleblower Protection Act, for which companies must set up a whistleblower system anyway, is also essential for this.

Always remember: your employees see problems and potential that you probably don’t know about because you are not specifically affected!

Diversity in companies is a process – it pays to keep at it!

Diversity cannot be implemented overnight and certainly not top-down.

Take one step at a time.
Follow best practices and examples from other companies, but be sure to adapt them to your company with the help of your employees.

The first port of call is the Diversity Charter’s resources – e.g. its tips for diversity management in large companies, SMEs, the public sector and associations.
Over time, you will create a company where everyone feels welcome.
We wish you every success!

* This information is summarized editorial content and should not be construed as legal advice. VERSO accepts no liability.