How to Increase Diversity in the Workplace

Companies in the top 25% for ethnic diversity outperform those in the bottom 25% by 36%.

That's not a feel-good stat. That's McKinsey research across hundreds of large companies.

Diversity isn't just the right thing to do—it's a competitive advantage. The question isn't whether your company should prioritize DEI. It's how to do it in a way that actually works.

This guide breaks down what workplace diversity really means, why it matters for your bottom line, and how to build it systematically.

What does diversity in the workplace mean?

The traditional meaning of diversity is simply to have variety. While this is true of workplace diversity, it’s more complicated and nuanced than this.

Diversity in the workplace means that a workplace employs people who all have unique social, physical, and personal characteristics. Most workplaces have this without realizing it, as some of these characteristics include those that are directly related to professional performance, such as skills, experience, and education. However, other seemingly unrelated characteristics are equally important, such as ethnicity, gender, and religious beliefs.

A diverse workplace includes people with a variation of these characteristics and recognizes that these characteristics are crucial to workplace success and fairness.

While diversity refers to the differences between people, inclusion refers to the procedures and practices in place that celebrate, protect, and help these differences in ways that benefit everyone. Diversity is a concept, and inclusion is a set of methods.

Diversity can exist without inclusion, but the reverse isn’t true. Businesses are diverse when they hire a number of people with different characteristics, but they aren’t inclusive unless those people are treated fairly, feel included, accepted, and safe, and are protected against discrimination. This goes for all kinds of diversity that people can display – but what exactly does that mean?

Types of diversity in the workplace

We’ve touched briefly on the different characteristics that people can have, but let’s take a more serious look at these characteristics.

Gender identity

Sex and gender refer to different things. Sex is usually categorized as either male or female, depending on certain physical attributes. Gender on the other hand, is how a person themself identifies.

Unlike sex, gender is not binary. It's a spectrum that features male and female at either end of it. A person may identify as being at some point within this spectrum or reject it entirely.

Gender identity is an important and increasingly controversial topic. It’s an intensely personal characteristic because it impacts how people are treated, think, act, dress, speak, and interact with the world.

Race and ethnicity

Race and ethnicity are both important terms that people use to describe and understand their ancestry, heritage, and history.

Examples of races would be Caucasian, African, and Asian. Examples of ethnicities are Irish, Kenyan, and Chinese.

Ethnicity is often seen as a more positive identifying factor when asking someone where they’re from or what they identify as. It’s not only more informative, but it’s also a way to stray from negative experiences of racism.

It’s important to note that both race and ethnicity are social constructs. They are important for some people’s sense of identity, as they can shape practices, beliefs, and ways of thinking and acting, but they are by no means biological evidence of superiority or inferiority in any way, shape, or form.

Culture

Cultural diversity is related to people’s ethnicity, and refers to the set of ideas and practices that a person is raised with and gets from the society they grew up in. Culture varies between countries, social classes, religions, and ethnicities, and is often informed by all of these variables.

Age

Diverse workplaces must make it a point to avoid age-related discrimination. Different ages and age groups have different life experiences based on what stage of life they’re at as well as what world events they’ve experienced.

For example, millennials might be vastly different to boomers, and GenZers could be different to GenXers.

Religion

A religion is a particular system of faith and worship. There are many different religions, such as Christianity, Islam, and Hinduism. People can be a part of religions and have varying degrees of religiousness, and others are not religious but spiritual. Some people don’t believe in any higher powers and aren’t spiritual at all.

Whatever the case, religion and spirituality both affect people’s culture as well as attitudes and views. It's important that they are respected without being allowed to be weaponized or used to cross boundaries.

Sexual orientation

A person’s sexual orientation is who they are attracted to. For example, a person might be heterosexual, homosexual, bisexual, demisexual, or pansexual. For some people, sexual orientation isn’t a fixed characteristic. Others are still in the closet.

Political leanings

Political beliefs refer to a person’s set of ethical ideals, doctrines, and principles. As with all characteristics, political leanings exist on a spectrum. Even supporters of the same political party may not agree on everything.

Physical and mental abilities and disabilities

Disabilities are not always visible. They are also not always straightforward. Not everyone who uses a wheelchair is wheelchair-bound, and not everyone who uses a white cane is 100% blind. Not being able to walk is a disability, but so are autism and ADHD. There are many disabilities and they are not created equal.

It’s important that there is awareness in the workspace about physical and mental disabilities so that able-bodied and neurotypical people can interact with their disabled coworkers respectfully and helpfully.

With a deeper understanding of the different ways in which people can be diverse, it’s easier to see how misunderstandings and conflicts can arise because of them and why it’s important to put systems and practices in place to protect employees from workplace discrimination. But avoiding or stopping discrimination isn’t the only reason that DEI in the workplace is important.

Why is DEI important in workplaces?

Discrimination doesn’t stop existing outside the office, and it exists insidiously within the office as well. For example, many businesses don’t believe that they have barriers to entry in place. They think that because they do blind interviews and don’t screen those that apply for their jobs that they are equal-hire businesses. While certainly a start, this isn’t enough.

Marginalized and minoritized people, or people who are outliers and are often made to feel unwanted, have been treated unfairly throughout their life. In institutions, work, and even social life, they may have faced rejection, bias, bullying, harassment, and exclusion.

This means that oftentimes, they are not afforded the same opportunities that most people have. They are not noticed, put up for promotions, or given scholarships. Even if they have achieved what others have achieved, they may have had to fight harder for it.

Diversity in the workplace is about giving people equal opportunities. Sometimes this means making accommodations and being understanding, which can look like “special treatment”. This isn’t the case. The workplace is actually leveling the playing field so that everyone gets equal chances to achieve the same goals.

In actuality, it’s the right and fair thing to do. Aside from altruism however, DEI also brings with it many, many powerful benefits for a business.

The benefits of DEI in the workplace

Savvy executives realize that diversity is the path to an improved employee experience and multiple ways to be more successful and profitable. These are some of the specific benefits of diversity, equity, and inclusion.

Increased employee engagement

There are many ways that DEI impacts employee engagement in organizations. Employees are more likely to vocalize their opinions and valuable input if they believe that others will listen to and respect what they have to say.

Additionally, an inclusive workplace reduces employee conflicts. This forges stronger bonds between employees and allows them to work with each other more effectively.

A diverse and inclusive workplace allows and encourages employees to engage actively.

Increased productivity and performance

The increased confidence that comes with being accepted, respected, and celebrated means that employees are far more likely to forge real relationships with their colleagues and leaders, which allows them to take pride in their work and workplace and look forward to doing what they are there to do. This ultimately improves a business’ overall performance and bottom line.

Increased skills and knowledge

Recruiting employees that come from a wide range of backgrounds means that they will all have different skills, experiences, and knowledge. Older employees may have more experience, while younger employees are more creative and offer new ways of thinking. Employees from different cultures will also have different ways of approaching problems.

This gives a business a vast range of perspectives to benefit from. This increase in skills and knowledge makes tackling problems a lot easier and quicker.

Increased creativity and innovation

Creative businesses stand out. Employing a diverse group of people means that there is a wider pool of unique ideas that can give a business the edge over their competition.

Increased creativity and innovation are better for problem-solving, coming up with new products and services, marketing, and more.

Easier recruitment

A diverse workforce comes from a diverse candidate pool. This means that a business that actively seeks DEI has a much larger talent pool than a business that doesn’t. Recruiting can be expensive and time-consuming, so enlarging the company’s network can increase recruitment efficiency and efficacy.

More understanding of customers

Businesses with a diverse customer base need a diverse team to connect with, gain insight on, and help most effectively. This is especially important for multinational companies.

Faster problem solving

Cognitive diversity is a powerful problem-solving tool. A diverse team offers each other varying perspectives and viewpoints. This helps them to come up with solutions quicker and more easily than a team that shares similar backgrounds.

Reduced employee turnover

Diverse workplaces have reduced employee turnover rates as employees feel supported and valued in their workplace. They are happier, more engaged, and more invested in their companies, therefore becoming more loyal and attached.

Improved reputation

Improved efficiency, productivity, employee turnover rate … diversity and its benefits look good for a company. What’s more is that a diverse workforce attracts applicants to a business and gives them a competitive edge over their rivals.

Once a business realizes that DEI is indeed the right path, they will naturally be excited to pursue it. It can be difficult to know where to start, however.

How to achieve diversity and inclusion in the workplace

Diversity, equity, and inclusion are the right way to go – but how can a business begin to make systemic changes to incorporate DEI into their business model? Here are some excellent ways to achieve this.

Recruit and promote from a diverse talent pool with a diverse hiring panel

A business’ hiring panel is the perfect place to start focusing on DEI. By creating a diverse hiring panel, a business can really begin to see the benefits of having a diverse team. A great way to do this is to employ a hiring panel that reflects the people that can be found in the business’ geographical location, whether that’s in terms of age, class, ethnicity, gender, and/or religion.

All business goals begin with hiring the right people; a diverse slate of candidates is essential, but a truly inclusive workplace also has a diverse hiring panel that can ensure a fair and objective hiring process.

Identify DEI as a strategic priority

Workplaces must make DEI a key organizational strategy. This way, it can include clear goals, performance measures, metrics, and KPIs can be reviewed, discussed, and observed.

Examples include:

How much DEI training is given (2 sessions per quarter?)

How many new hires are made to purposefully include more diversity

Achieving and maintaining base equity pay for employees in similar roles or markets, regardless of differences in personal characteristics

Increasing representation of underrepresented groups

Consistently train and engage employees on DEI

Many workplaces have diversity and bias training, but they can fall flat. Training mustn't be presented as a passive lesson, but rather as an interactive and ongoing part of a wider, organizational conversation. It’s great to have seminars, but it’s just as important to have individual chats between colleagues, have managers communicate goals to their teams, and encourage conversations about DEI issues and what the company thinks of them. DEI training can even include things like taking part in other’s cultural traditions and religious celebrations.

It’s also necessary to keep in mind that employees should be treated as they want to be treated, not how others think they should be treated.

Scrutinize leader representation and hold them accountable

A business’ board and executive team should mirror the diversity of its physical location or client base. There should, however, already be a culture of belonging in place so that these leaders aren’t set up for failure. There isn’t any point hiring a board of minorities if the rest of the workplace is racist, insensitive, or otherwise bigoted.

Additionally, once the DEI strategy is in place, these leaders must be held accountable to both good and bad results.

Diversity, equity, and inclusion are the future

There are no two ways about it. DEI is the future, and companies must focus on it now. From talent acquisition to the everyday minutia of the office, inclusion must be an innate part of how a business operates.

Intrinsic, systemic diversity and inclusion are difficult to achieve, and they take a lot of time and effort. The results however, are powerful and well worth it.