How Diversity and Inclusion Drives Employee Engagement

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It’s not news to anyone that there is a diversity problem in the U.S. workforce. Just 5% of Fortune 500 CEOs are women, and only six companies in the 500 have three female top execs.

But when companies make diversity a woman or underrepresented class problem, that is when failure ensues.

Diversity and Inclusion is a business issue and it must be treated as such. It is linked to Employee Engagement. In fact, diversity and inclusion drive employee engagement.

Let’s look at some data points.



The Numbers Have It

Gender-diverse companies are 21% more likely to experience above-average profitability and 27% more likely to create longer-term value than those that are not gender-diverse. (McKinsey)

Inclusive teams make better decisions up to 87% of the time. Teams that follow an inclusive process make decisions 2x faster with half of the meetings. Decisions made and executed by diverse teams delivered 60% better results. (Forbes)

In addition, diversity of thought is a wellspring of creativity, enhancing innovation by about 20%. It also enables groups to spot risks, reducing these by up to 30%. And it smooths the implementation of decisions by creating buy-in and trust.

Deloitte’s research shows that inclusive leaders (be they senior executives or managers) can drive the difference between the proportion of employees who feel highly included and the proportion of those who do not by 70%. This effect is even stronger for minority group members. Furthermore, an increase in individuals’ feelings of inclusion translates into an increase of 17% in perceived team performance, 20% in decision-making quality, and 29% in collaboration.

Gallup has also found that employee engagement and inclusiveness are connected. It found the combination of employee engagement and gender diversity resulted in 46% to 58% higher financial performance — comparable revenue and net profit, respectively — for business units above the median on both engagement and gender diversity, compared with those below the median on both. It also found that engaged employees are more likely to say their company values diverse ideas and does what is right.

CEB, now part of Gartner, found workers in highly diverse and inclusive organizations result in a 26% increase in team collaboration and an 18% increase in team commitment. Additionally, employees who are part of organizations with high levels of diversity report a 7% higher intent to stay than their peers in organizations that have low levels of diversity.

Catalyst, a global nonprofit that helps organizations build the business case for diversity and inclusion, found in its research the more included employees felt, the more innovative they reported being in their jobs, and the more they went above and beyond the ‘call of duty’ to help other team members to meet workgroup objectives.

Companies with greater numbers of women are more likely to introduce more innovations into the market over a two-year period. (Innovation: Management, Policy & Practice)

Diversity and inclusion drive employee engagement which drives profitability. So, if you’re looking to drive employee engagement, start first with diversity and inclusion.

Create a Culture of Diversity and Inclusion

Re-engineering a culture is hard work. But you have to do it if you want to create a diverse and inclusive workplace. And that involves everybody. And it’s everybody who helps ensure that diversity and inclusion drive employee engagement.

So, what can organizations do?

Start at the top

Creating, encouraging, and valuing diversity and inclusivity in the workplace starts at the executive level. The C-Suite, whether it’s the CEO, Chief Diversity Officer, Chief People Officer, or some other C-suite executive, must champion diversity and inclusion. That includes:



  • Establishing and driving the diversity and inclusion vision
  • Aligning and influencing the organization by ensuring every employee – from leadership to the front lines – understands this vision and its importance and their role in it and ensuring that employees take ownership and are accountable for their piece of this effort
  • Creating a safe and comfortable work environment
    Ensuring women and other underrepresented groups are in the room, they are treated with respect and they know their contributions are valued
  • Managing metrics and trends to ensure equal treatment of employees in pay and opportunity
  • Building diversity into core values
  • Being transparent about pay. This is an issue as of late with companies like Google, Microsoft, and Twitter being sued for pay discrimination and other companies being called out for gender pay disparities. In fact, it is now law in the UK that any company with more than 250 employees is required to publish pay information, broken out by gender, on a government website. In the US, some companies like Apple and Facebook have signed the White House Equal Pay Pledge. As part of the pledge, these companies commit to conducting an annual company-wide gender pay analysis across jobs; will review hiring and promotion procedures to shed more light on unconscious biases; embed equal pay efforts into broader equity initiatives; and promote other best practices to close the national wage gap.

Revise recruiting practices

Review recruiting content, how/where you source candidates, job descriptions, resume review, interviews, candidate selection, and performance reviews to remove any unconscious gender biases and replace with behaviors, words, and speech of inclusion and diversity.

Review what diversity and inclusion leaders are doing. How are they attracting, recruiting, and retaining diverse talent? Benchmark your strategies to those used by best-in-class organizations in your industry.

Ensure equal access to career development programs

Managers should build gender equality into training and education, coaching, mentoring, sponsorship, and networking opportunities. These opportunities don’t only benefit the employee, they also benefit the organization.

When employees are engaged and feel valued, they are more likely to stay with the company, which impacts productivity and profitability, keys to an organization’s success. Managers must also ensure all employees feel supported and respected so they build confidence as they grow in their careers. And, as such, they should check in with employees and track their progress. Aim for 50-50 gender split on all teams.

Offer work-life balance programs

Provide flexible working arrangements, like flextime and remote working, as well as other work-life balance programs such as childcare and maternity/paternity leave.

Build gender equality into your voice of the employee program

Use many channels – surveys, interviews, small group sessions, etc. – to find out what motivates or troubles employees. Take immediate action on the feedback you receive. Send a message to employees – their voices are being heard and you care about them.

Acknowledge biases

We all have biases. In fact, research shows people have a “bias blind spot”. They are less likely to detect bias in themselves than others.

If you’re not sure what your unconscious biases are, consider taking the online hidden bias quiz, developed by psychologists at Harvard, the University of Virginia and the University of Washington to measure unconscious bias.

Being aware of what your biases are will help you determine what actions you can take to manage them and curb behavioral tendencies you might have.

Embrace differences

It’s common to want to gravitate to those who are “like you”. There’s safety in that. But different ideas and approaches actually add value. Acknowledge and support different ideas. In fact, seek out differing viewpoints.



Make sure everyone is heard in team meetings. Have an inclusivity moment where you invite people to lunch who are different from you. Every time you attend an event, seek out people different from you.

Always be improving

Peter Drucker said, “you can’t manage what you can’t measure”. So it’s vital that you set up a metrics dashboard to see where you stand on employee retention and other diversity factors. Assess trends and patterns and know the reasons why your metrics are what they are. Having these insights will help you plan on how to improve diversity. And when you improve diversity, everyone wins.

Diversity and inclusion drive employee engagement, which drives profitability. By implementing these best practices, you’ll be able to measure your progress towards diversity. To make these changes requires a joint effort from everyone, from leadership to the front lines. The more diverse and inclusive an organization is, the more successful it becomes.

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