Today, many businesses are investing in diversity and inclusion programs, and for good reason. According to McKinsey, gender-diverse companies are 15 percent more likely to outperform their non-diverse counterparts, and ethnically diverse companies are 35 percent more likely to outperform those counterparts.

However, simply hiring a more diverse staff isn’t enough on its own. To see the greatest benefits of diversity, you need to achieve cultural competence.

Diversity vs. Cultural Competence

Terms like “diversity,” “inclusion,” and “cultural competence” are easy to mix up; they all sound very similar. But while these concepts have many underlying similarities, the approaches they drive are distinct.

“Diversity” usually refers to the intentional acquisition of employees who belong to traditionally underrepresented groups in an industry or field. “Inclusion,” which usually goes along with diversity, goes a step further by ensuring that diverse hires are actively engaged in the work environment, participating in meetings and given opportunities for leadership and advancement.

As explained by cognitive research firm Global Cognition, “cultural competence is … the ability to work effectively with people from different cultural backgrounds.” If diversity and inclusion’s aims are to increase the presence and influence of certain groups of people, cultural competence is about achieving mutual acknowledgement and understanding between employees of various backgrounds.

Cultural competence is important because it encourages further collaboration between employees, which unlocks the full business value of having a diverse staff.

Is Your HR Department Culturally Competent?

Your company may have a diversity and inclusion program, but are your teams practicing cultural competence? To find out the answer, ask these key questions:

1. How Is Your Diversity Program Executed?

First, look at who’s doing the executing of your diversity program and how they’re executing it. In many organizations, diversity initiatives are the responsibility of hiring managers and senior leaders. To foster cultural competence, however, your diversity program needs to penetrate each level of your organization. Employees and managers in all positions need to be aware of the importance of interacting with and understanding people from other cultures and backgrounds. Cultural competence won’t happen if the diversity program is a top-down affair.

2. How Are Employees From Underrepresented Groups Treated?

GroupDoes your company see these employees as quota-fillers, or as independent sources of value and knowledge? Don’t treat employees from underrepresented groups as necessary ingredients in diversity programs. Instead, respect them the way you should respect any employee, regardless of identity or background.

3. Are There Opportunities for Cross-Cultural Interaction?

Interaction is the most important part of achieving cultural competence; without open conversations to which employees from various genders, ethnicities, cultures, and backgrounds contribute, there is no chance for mutual understanding.

How many opportunities are there for interaction between people of different groups at your company? Are there frequent employee gatherings and events where people can get to know each other? Do your meeting lineups rotate regularly, or do the same people in sit in the same meetings with one another every time?

4. How Has Your Company Changed as a Result of Its Diversity and Inclusion Initiative?

Has your business changed as a direct result of diversity and inclusion efforts? Have the knowledge and skills brought to the table by new employees caused leadership to make new decisions at any level?

If the answer is no, that means your employees from underrepresented groups have been given little chance to impact your company. It doesn’t matter how many people you hire from any given group if they do not have a chance to contribute.

5. How Are You Measuring Your Diversity Goals?

If your ultimate goal is to build a more diverse workforce, you need some way to measure your progress toward that goal. Many businesses measure diversity goals in terms of how many people they’ve hired who belong to specific groups, but such metrics are meaningless for cultural competence.

Instead, you should measure progress in terms of how many opportunities there are for people to learn from each other and how much impact new hires from underrepresented groups have on your business’s operations.

If your diversity and inclusion program doesn’t include cultural competence, don’t fret. With a few adjustments – including a renewed emphasis on interaction and exchange – cultural competence is relatively easy to incorporate into your operations. The benefits of doing so can power organizational success for years.

Larry Alton is an independent business consultant specializing in tech, social media trends, business, and entrepreneurship. Follow him on Twitter and LinkedIn.

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