Right now over a third of U.S. workers are between the ages of 24 and 35. In other words, millennials make up the largest generation in the labor force.

As a result, today’s workers are more diverse than ever. Employees are more racially diverse and are more likely to include women, transgender persons, and people of different sexual orientations.

Forward thinking companies and organizations are recognizing this shift in the workforce.  And, as a result, they are creating programs to make sure they reflect this greater inclusivity and diversity.

However, an inclusive and diverse workforce brings advantages to businesses in a large number of ways that aren’t always so obvious. Here are five benefits of a diverse workplace employers, managers, and owners should keep in mind.

1. New Perspectives

People who think differently bring fresh energy to the issues organizations face. And new ideas and experiences translate into new viewpoints and insights. And, of course, this applies to marketing strategies, company operations, and just about any other elements of a business that require decision making. A diverse workforce makes an organization more flexible and gives a greater number of possible solutions to every challenge.

2. Wider Talent Pool

Diversity and inclusion builds a wider talent pool. As a result, diverse organizations can attract better candidates and be more competitive. Even simple steps, like checking to make sure that the language in job listings is inclusive and gender neutral, can go a long way towards broadening the diversity of a company’s candidates. But actively recruiting from niche demographics and promoting inclusive benefits and perks can help widen the pool also.

3. Broader Customer Base

A diverse customer base means your revenue comes from a number of clients or customers. When advertising thinks about all the different communities and cultures that make up its potential customers, it can target a larger audience. Studies also show that customers are more loyal to brands that respect and understand their individuality.

4. More Innovation

Diversity increases innovation as well by creating an environment that values outside-the-box ideas. Differences among team members mean employees have to be prepared to consider alternative and unexpected perspectives. As a result, consensus takes more effort and preparation but is also more valuable in the long run.

5. Increased Profits

Many highly trusted researchers have shown that diversity makes an organization more effective, more successful, and more profitable. For example, The Wall Street Journal found, in their ranking of companies in the S&P 500 index, that the twenty most diverse companies had high growth in sales and profit and outperformed the least diverse companies.

If businesses want to evolve along with the labor force, diversity and inclusion are key. Of course, one obvious reason is that inclusivity creates a welcoming work environment where employees can do their best work. But diversity also gives a competitive edge. More diverse organizations see improved financial performance, stronger innovation, and a more engaged workforce and customer base.