The Connection Between Diversity In The Workplace & Employee Retention

By Gena Cox - October 24, 2019

In a previous article, we looked at the benefits of inclusion and diversity in the workplace from the standpoint of productivity and profitability. But the benefits don’t stop there; diversity is also strongly correlated to employee retention, and for the same reason: Employees perform better when they feel accepted and respected, and when they see their co-workers treated with respect.

As noted in the previous article, diversity and inclusion are separate concepts —it’s possible for a company to be diverse but not inclusive, or to be inclusive but not diverse. For the purposes of this article, we’ll be focusing exclusively on the benefits of diversity in the workplace.

Diversity Applies To The Full Range Of Human Attributes

When we use the word diversity in relation to the workplace, many people think only in terms of race, religion, and gender, a holdover from an era when companies discussed diversity primarily within the context of legal protections for traditionally disadvantaged groups. But diversity applies to the entire range of human attributes, including, but not limited to:

  • Personality
  • Race
  • Thinking style
  • Ethnicity
  • Working style
  • Nationality
  • Worldview
  • Gender
  • Religion
  • Age
  • Socioeconomic background
  • Disability
  • Sexual orientation
  • Language

A successful workplace is one in which peoples’ differences are viewed as an advantage that can both drive business performance and help individuals thrive.

Benefits Of Diversity In The Workplace

There are many benefits to diversity in the workplace. From the organization’s perspective, it allows access to the widest range of talent, not just talent reflective of a particular worldview or segment of society—and it helps provide insight into the needs and motivations of the organization’s entire universe of potential clients. These benefits result in documented higher profitability.

But workplace diversity also delivers benefits to employees. In the Houston Chronicle, HR expert Ruth Mayhew outlined the various ways employees benefit from a diverse workplace:

  1. Diversity promotes an environment of mutual respect—Through their working relationships with people of different backgrounds, abilities, and cultures, employees gain respect for the unique talents and ideas their coworkers bring to the table.
  2. Marginalized groups gain economic empowerment through workplace diversity—When employees who have previously been shut out of the workplace due to overt or unintentional bias have access to well-paying jobs, they can fully participate in the local economy and everyone benefits.
  3. Mutual respect reduces conflict—When people with diverse backgrounds work together and get to know and respect one another, the potential for conflict is reduced and conflict resolution is easier. Less conflict results in a more positive work environment for all employees.
  4. Diversity enhances business reputation and opportunity—Businesses known for ethical behavior, fair employment practices, and appreciation of diversity are better able to attract talent—and customers. Building a great business reputation benefits both the organization and its employees, through increased profitability and opportunity.
  5. Diversity increases opportunities for globalization of business and careers—A diverse workforce is a huge advantage for reaching markets in foreign countries. Employees benefit through additional development and promotion opportunities.
  6. Employees learn from one another in diverse workplaces—Exposure to different kinds of people allows not only greater understanding, but can also help employees pick up new skills and knowledge. Older workers can benefit from the technological savvy of younger workers, for example, while younger workers benefit from older workers’ years of experience.

Each of these benefits has a positive impact on retention, in addition to the other benefits organizations realize as a result of having a diverse workforce.

It’s also important to keep in mind that a lack of diversity in the workplace can have a negative impact. Not only will the organization and its employees miss out on the benefits enumerated above; a lack of diversity may drive higher attrition—and not just due to employees who feel like the “odd man out” departing. The bystander experience, where employees are turned off by observing inequities against others, can generate discomfort and lead to a decision to leave the organization. This impact may be more pronounced among younger workers, who place a very high value on corporate social responsibility in all its forms.

Learn what you should be asking your employees about diversity and inclusion—and every aspect of the employee experience—with our free guide, Using Employee Survey Questions In A People Analytics Practice.

Achieving Diversity In The Workplace

The data is clear: Diverse organizations perform better and are more profitable. Corporate leaders have taken notice and are taking steps to diversify their organizations. But achieving diversity is an ongoing process—and a difficult one, because it requires changes in business culture, as well as recognizing and confronting the inherent or unconscious biases of both the organization and individual employees.

While HR may play the most prominent role in staffing a diverse workplace, creating a diverse and inclusive work environment relies on everyone in the organization. Leaders have the most important role in modeling behavior for the rest of the company. Recognizing the challenges that leaders and businesses face in creating diverse organizations, the CEO Action for Diversity and Inclusion initiative has enlisted more than 700 CEOs representing the world’s leading companies to advance workplace diversity and inclusion. CEO Action sponsors an ideas exchange for organizations seeking ideas about the actions they can take to advance diversity that are the best fit for their company.

Artificial intelligence has a role to play in achieving diversity in the workplace. Automated recruitment and application processes not only save time for HR; they also can eliminate unconscious biases that get in the way of diversity in hiring. However, it’s important that the algorithms for these processes are built on diverse data sets—otherwise, automated processes can reinforce the problem.


Ultimately, there are no one-size-fits-all solutions for creating diversity in the workplace. The steps that an organization may need to take to create a diverse and inclusive workplace will depend on the culture, the current workforce, the current state of the company, and its future business goals. Organizations focusing on enhancing diversity should take advantage of all available best practices to help with this challenge. Artificial intelligence can help eliminate biases in hiring. Leaders can model inclusive behavior for employees and support the practices of organizations like CEO Action that share best practices. Additionally, employee survey data is one of the most effective tools for mapping a path to workplace diversity. Survey data, correlated to demographic data, can provide feedback identifying areas of friction. Effective collaboration is a primary driver of the innovation organizations crave. Barriers to collaboration, related to ineffective workplace interaction, can be identified using employee surveys. Surveys can pinpoint parts of the organization that need help in increasing diversity to create more effective, diverse leadership teams. In addition, surveys are useful for monitoring the effectiveness of actions taken to promote diversity. Surveys can also help organizations understand how day-to-day experience and career mobility relate to diversity attributes.

Creating a diverse and inclusive working environment takes time and commitment—but it yields big dividends for both the organizations and their employees. (Tweet this!) A diverse workforce makes better decisions, and the many points of view in a diverse group of employees promote innovation. Most importantly from the employee standpoint, a diverse workplace is one where people are respected for their skills and for who they are as unique humans. They feel they belong. Employees who feel respected, accepted and valued tend to be highly engaged and productive—and are less likely to leave the organization.

Want to increase diversity in your organization?

At Perceptyx, helping companies identify and overcome barriers to productivity and profitability is our goal. With custom surveys paired to our people analytics platform and expertise in all aspects of survey design, strategy, and communication, we can help you identify barriers to diversity and inclusion in your organization. Get in touch and let us show you how.

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