Diversity in the workplace has become an imperative for businesses around the globe—and for good reason. A growing body of research indicates that businesses with higher diversity outperform their peers and that workers believe diversity is an important part of a company’s culture.

In India, there is one industry in particular that should be leading the way in cultivating diverse workplaces. India’s thriving Information Technology (IT) and Business Process Management (BPM) industry has become a major driver of economic growth. The IT industry accounted for 7.4 percent of India’s GDP in 2022 and is expected to contribute to 10 percent of the nation’s GDP by 2025. Given the IT-BPM’s industry significant footprint and its trajectory for continued growth, companies in this sector must set an example for others.

In this blog, we’ll explore what it means to have diversity in the workplace, the state of diversity among Indian IT companies today, and what employers can do moving forward to bring this business priority to life.

What is a diverse workplace?

While it’s easy to think of diversity only in terms of the things we can see, there are many factors that contribute to a genuinely diverse and inclusive workforce. Some examples of diversity in the workplace include:

• Gender diversity: Are people of different genders represented?
• Age diversity: Do workers come from different generations?
• Ethnic diversity: Are there a variety of ethnicities cultures represented in your organization?
• Physical ability and neurodiversity: Does your company meet the needs of employees with different physical and neurocognitive abilities?
• Educational and socioeconomic diversity: Do people come from different educational and socioeconomic backgrounds?

Why is diversity in the workplace important?

When you bring together a broader range of perspectives, experiences, and ideas, the benefits are clear. According to LinkedIn, organizations in the top quartile for gender diversity are 25 percent more likely to financially outperform their peers, and organizations in the top quartile for ethnic diversity are 36 percent more likely to outperform their peers. Diverse companies also earn 2.5 times higher cashflow per employee, and inclusive teams are over 35 percent more productive than those that are not.

Research also shows that employees value diversity in the workplace—it has become a critical component to company culture. Nearly three-quarters of employees and job seekers say diversity is important when considering job offers, per the LinkedIn survey, and 80 percent of respondents said they want to work for a company that values DEI issues.

Furthermore, 77 percent of the employers surveyed by Indeed for a report on diversity, inclusion, and belonging in Indian workplaces believe that not prioritizing these initiatives could adversely affect their organizational performance.

How diverse is India’s IT workforce today?

At this time, most conversations in India regarding diversity in the workplace seem to be centred around gender. And while the number of women employed in India’s IT industry has risen over the last decade, there is still more work to be done to close the gap.

The Economic Times reported in August 2023 that women now make up 36 percent of India’s IT workforce—up from 30 percent ten years ago. This positive increase has been attributed to a combination of progressive policies, increased availability of computer science courses, visible examples of women in leadership roles, and policy frameworks enabling women to work night shifts.

Of course, there’s much more to diversity than hiring women—but less data is available on hiring trends that reflect the other types of workplace diversity outlined above.

The Indeed survey did find that across all industries, nearly eight out of 10 organizations reported employing women. Meanwhile, about one-third each reported employing backward and minority communities. Only one in five companies or less said they employ LGBTIQ+ and people with diverse physical and neurocognitive abilities.

Where does India’s IT industry go from here?

Today, diversity as a business priority is much more widespread than in decades past. Where there’s less clarity and consensus, however, is how organizations can make this imperative a reality. So here are a few quick takeaways for employers in the IT industry that want to make diversity a priority in the new year and beyond:

1. Employers in India must think more broadly—and inclusively—about how they view diversity in the workplace. While gender diversity is an essential piece, there are other types of diversity that business leaders must consider, as well.
2. Companies should prioritize representation at all levels, including the C-suite. Diversity initiatives cannot just be bottom-up. Executives must take part in setting the tone and putting these ideas into action.
3. Don’t overlook your existing employees. Businesses are not only responsible for educating their current team members on diversity in the workplace, but they should also take time to gather feedback from them on how the company is doing from a diversity standpoint, whether they feel welcome, and any suggestions to improve DEI across the organization.

Related: 5 Strategies for Gender Inclusion and Diversity Hiring in India

This blog was authored by Navaneel Das.