According to several studies, companies with high diversity scores tend to record higher revenue figures on average, than those with low diversity scores. McKinsey & Company has conducted extensive research on the relationship between diversity and financial performance. Their "Diversity Matters" report found that companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians. Similarly, companies in the top quartile for gender diversity are 15% more likely to outperform their industry medians. This research highlights that diverse companies are better positioned to achieve above-average financial performance. Studies from MIT and Harvard Business School also reported similar findings.

This is particularly interesting in the scope of the Cypriot landscape, as Cyprus is located between three continents and combines certain elements from Europe, Asia and Africa. Therefore, it is easy to assume that Cypriot companies employ people of multiple cultural backgrounds. The questions we will try to address in this article is: 

“How diverse is the workforce in Cyprus?”, and “how does diversity influence employee productivity, and in turn, corporate revenue in Cyprus?”

To answer this question, we first need to define the concept of diversity in the workplace. Workforce diversity is the collective mixture of the differences and similarities between employees, including individual characteristics, values, beliefs, experiences, backgrounds, preferences and behaviors. Diversity in the workplace creates a safe environment for the exchange of opinions and ideas born from different cultural and social backgrounds, which only serves to benefit any organization. Furthermore, the cooperation between people with various differences helps nurture a culture of inclusivity, empathy and respect. Values that are highly regarded by employees who, in turn, feel more connected and committed to the company’s long-term plans.

One of the most important metrics modern companies take note of is turnover rates. Turnover rates are defined as the percentage of employees leaving a company within a specified period of time. Naturally, high turnover rates are highly indicative of a problematic infrastructure within the company that needs to be addressed as quickly as possible.

In the Cypriot context, where businesses often employ a multicultural workforce to accommodate talent needs, employing inclusive practices is vital in order for all employees to feel appreciated and respected. By prioritizing diversity and respect, many Cypriot companies have created a healthy and sustainable workplace environment that motivates employees to stay at the company and do their utmost for its advancement. Some examples of big Cypriot companies with strong Diversity, Equity and Inclusion policies include PWC, EY , and CYTA among others. Although corporate initiatives are a great step towards inclusivity, ensuring diversity at work for all employees requires governmental policies. The Cypriot Diversity Charter was developed in 2019 and is officially represented and managed by the Center for Social Innovation Ltd.

It is clear that employees appreciate the efforts of their employers to nurture a balanced culture within the company, and this appreciation is then turned into productivity and creativity.

Several Cyprus based companies companies in the forex industry had a history of hight turnover, and implemented policies that promote gender diversity and inclusion, which among others, was one factors attributing to the decrease in their turnover rate in recent years. Companies that have a plan and are proactive in their attempts to ensure equal growth and development for their employees are often preferred by local talent, which contributes greatly to employee retention rates.

Having established the connection between inclusivity and employee retention, it is important to elaborate on the effect that the latter has on a company’s revenue and profitability. According to research conducted by Oxford Economics retaining talent is far more cost-efficient than hiring new employees, as retained employees are more accustomed to their role, require less training and are much more adaptable to change.

Apart from the apparent financial benefits that employee retention provides companies with, keeping employees who have experience within the company’s framework and philosophy leads to enhanced customer assistance, better products and services, and overall increased efficiency. 

While we have already underlined the benefits and positives of diversity within a company, like everything else in life, it is not all smooth sailing. A very common obstacle companies need to carefully navigate when employing diversity practices is unconscious biases that can influence employees and employers alike. Furthermore, existing employees may be opposed to change and feel threatened by newfound diversity within the company. This is especially true in companies where there are significant age gaps between employees. 

Moreover, adapting company policy and practices to a new status quo can become a legislative nightmare due to outdated rules and regulations that may favor certain groups and impede progress.

Creating a diverse and inclusive workplace environment goes beyond adhering to modern regulations and keeping up with the times, as it actively benefits the company and increases customer satisfaction. In turn, this leads to enhanced productivity, reduced turnover rates and operational costs, thus increasing profits. 

Cypriot companies can stand to benefit even more from diversity, as the island’s geographical location is a crossroads between three continents and a multitude of different cultural heritages. Finally, because of the country’s soaring tourism industry, multicultural and multilingual companies have a great advantage over competitors.