Diverse cultures are sources of strength in the workplace. Companies that undervalue diversity in the workplace face consequences ranging from employee burnout and excessive turnover to expensive lawsuits and missed opportunities for profit and innovation.
In contrast, when workplaces create a culture of inclusion and respect, companies become better equipped to harness the creativity, grit, and productivity of their employees. The result? Elevated employee satisfaction metrics, streamlined processes, fewer barriers to meeting deadlines — and, ultimately, higher profit margins.
Diverse Culture in the Workplace: How to Use This Guide
Although most companies want to create an inclusive workplace that empowers employees, many may not know where to start. To help organizations embrace a more diverse work culture, this guide provides specific strategies for building an inclusive company culture.
Understanding Diversity and Inclusion
Diversity and inclusion (D&I) consulting firms, such as the Kaleidoscope Group, emphasize the difference between hiring diverse employees and valuing diversity at every organizational level.
Diversity Versus Inclusion
- Diversity is a variety of skills, experiences, values, and cultures. All employees and stakeholders contribute to the diversity of an organization.
- Inclusion is a state of valuing and leveraging employees’ diversity to create an environment that empowers employees to do their best work.
When companies empower workers to bring their full selves to work, that’s inclusion. Organizations should strive not just to hire a diverse labor force but also to create structures that allow all employees to experience the benefits of workplace diversity.
Dimensions of Diversity
Diversity and inclusion consulting firms address many different dimensions of diversity:
- Geographic location
- Sexual orientation
- Veteran status
- Role/job classification
- Performance expectations
- Work experience
- Work location
- Communication style
- Leadership style
- Learning style
- Work habits
Quick Diversity and Inclusion Statistics
To gain a better understanding of just how important workplace inclusion really is, here are some diversity and inclusion statistics from workplaces across the U.S.:
Workplace Diversity Statistics
- Over 67% of job seekers consider workplace diversity an important factor when looking at employment opportunities, according to Glassdoor. Plus, more than 50% of current employees want their workplace to do more to increase diversity.
- Companies with more diverse management teams report 19% higher revenue. Embracing diversity translates to higher profit margins, according to Boston Consulting Group.
- Gender-diverse companies are 15% more likely to outperform their peers, according to human resources adviser Josh Bersin, and ethnically diverse companies are 35% more likely to do the same.
- Catalyst research shows that companies with more women on their boards statistically outperform peers over time.
- The International Labour Organization reports that organizations with gender inclusive cultures and equal employment opportunity policies were more than 60% more likely to show improved profits and productivity.
- The same 2019 report also found that companies that prioritize inclusion were almost 60% more likely to experience greater ease in attracting and retaining talent and enjoy greater innovation than competitors.
U.S. Demographic Statistics Relevant to Diversity Initiatives
- Black and Hispanic workers continue to have higher unemployment rates relative to white workers. The Economic Policy Institute finds that African American unemployment is twice as high as white unemployment. Although state-by-state improvements differ, people of color still face barriers to finding jobs.
- Pew Research Center projects that no single racial or ethnic majority will exist in the U.S. by 2065. Immigration projections suggest that about 1 in 3 Americans will be an immigrant or have immigrant parents by then (up from 1 in 4 in 2015). The projected ethnic makeup of the country will be more diverse: 46% white, 24% Hispanic, 14% Asian, and 13% Black.
- Women make up 46.9% of the current U.S. workforce. The U.S. Bureau of Labor Statistics collects and aggregates data on the current labor force, including the age, sex, and race of American workers. And that statistic does not account for women’s unpaid work.
- Women still earn only 85 cents on the dollar compared to men. The Pew Research Center finds that in 2020, the gender pay gap persisted.
- Women still only make up less than 7% of CEOs of Fortune 500 companies. The number was 37 out of 500 companies with nonmale CEOs in 2020. Although women increased their presence in higher-paying jobs traditionally dominated by men, women continue to be overrepresented in lower-paying jobs relative to their share of the workforce.
- Gender discrimination still holds women back at work. A 2017 Pew Research Center survey found that about 4 out of every 10 working women (42%) experienced gender discrimination at work. Only around 2 out of every 10 men (22%) said the same. The most common form of discrimination? Earnings inequality.
- African American women participate in the labor force at a higher rate than white women, according to the National Coalition on Black Civic Participation. Yet, African American women are more likely to be in occupations with lower wages. Since African American women are more likely to be breadwinners, that means they face a higher financial burden than any other demographic group.
How to Create an Inclusion Committee
An employer that underpays and overworks women and people of color creates a toxic workplace culture. When workers feel undervalued at work, their work performance can suffer, and so can their mental and physical health. To help prevent a toxic workplace culture, workers, especially those in management positions, need to look out for signs that diversity is being underappreciated.
One meaningful step to take in improving workplace culture is to create an inclusion committee. In the process, managers and company leaders can glean important insights about employee satisfaction, barriers to productivity, and options for moving forward.
Step 1: Start with a Vision
An inclusion committee should define a clear vision for an improved workplace culture. According to Affirm, inclusion committees can provide clear benefits to organizations:
- Implement company-specific goals to recruit, retain, and advance diverse talent
- Operationalize concrete measures to create and sustain an inclusive culture
- Annually publish data and progress metrics on the diversity of the workforce across seniority levels
- Invest in partnerships to build a diverse pipeline of talent, and develop and support talent from all backgrounds
Step 2: Get Executive Buy-In and a Budget
An inclusion committee needs the financial support of the executive team. Diversity and inclusion initiatives need to be employee-led to represent an organization’s demographics, but they also need the support of human resources, legal, and finance departments.
Step 3: Identify Focus Areas
Each organization has specific inclusion needs: diversity metrics, recruitment, retention, community partnerships, and so on. Inclusion committees should prioritize and focus on specific tasks and metrics, according to their organization’s needs.
Step 4: Set Goals
Committees for promoting diversity and inclusion may adopt many different goals. Some tasks for achieving diversity and inclusion goals include:
- Create a diversity and inclusion survey
- Analyze diversity and inclusion data
- Maintain up-to-date employee demographic metrics
- Write a monthly newsletter
- Publish goals and data
- Set recruiting goals for underrepresented groups
- Conduct a historical candidate application and data review
- Seek tools for sourcing underrepresented groups
- Work to eliminate hiring bias
- Implement targeted recruitment events
- Create employee resource groups
- Celebrate diversity awareness months
- Offer a diversity-focused speaker series
- Host workshops
- Engage in community partnerships
- Research local community groups to partner with
- Advertise community activities
Fostering a Culture of Inclusion
Inclusion means valuing diversity. At work, that translates to honoring diverse cultural and religious practices and appreciating diverse thinking.
Workplaces can foster a sense of inclusion by:
- Providing opportunities for employees to share and celebrate their cultural heritage
- Funding diversity initiatives
- Soliciting feedback from employees about what holidays/traditions/customs matter most to them
- Collaborating with community groups to provide enrichment activities around diversity and inclusion topics for employees at all levels
- Allowing time off work for employees to honor cultural and religious traditions
The bottom line: When organizations put effort into developing a diverse and inclusive culture in the workplace, everyone benefits.
- Ideas for how to embed diversity, equity, and inclusion into pandemic plans. This Harvard Business Review article gives suggestions for adapting inclusion efforts in the face of a crisis.
- Why race matters. This accessible graphic includes action steps for discussing race in the workplace, by Korn Ferry.
- Tools and guidance for talking about race. This list from the National Museum of African American History and Culture provides a springboard for beginning or expanding self-reflective journeys on race.
- Set of resources on diversity, equity, and inclusion conversation strategies for remote teams. This is a timely collection given the increase of partially and fully remote workers.
- A framework for engaging in meaningful diversity and inclusion efforts. This Massachusetts Institute of Technology decision tree gives a view of engaging with conflict.
- Quick definitions of diversity, equity, and inclusion. From MIT, this guide concisely explains concepts and their importance.
- What is privilege? This quick fact sheet defines privilege to a general audience.
- Defining stereotype threat. This is a quick guide for organizations that explains stereotype threat and why it matters for the workplace.
Minnesota Center for Diversity in Economics