Inclusion in the Workplace: Why Inclusive Workplaces Foster Happier and More Productive Teams

An inclusive workplace attracts and retains top talent – 94% of respondents in the Inclusion Barometer 2024 survey confirm this. Additionally, 73% believe that fostering a diverse and inclusive workplace is even more critical today than it was five years ago.

Discover practical strategies to build a more inclusive workplace that enhances employee engagement and drives organizational success.

What you’ll learn in this article:

• The true meaning of inclusion and its impact on workplace culture.
• Why fostering an inclusive work environment is essential for success.
• Key factors that distinguish companies excelling in diversity and inclusion from those lagging behind.

Inclusive Culture: The Foundation of a Modern Workplace

A modern workplace is an ecosystem where technology, flexible work models, and organizational culture foster innovation while ensuring employee well-being. One of the key pillars of this ecosystem is inclusion.

Inclusion means creating a professional environment built on equal opportunities, mutual respect, and the full utilization of every employee’s potential – regardless of gender, age, ethnicity, sexual orientation, or physical ability. In such a workplace, employees:

• Feel valued for their unique identities.
• Experience a sense of belonging and mutual respect from colleagues.
• Can actively share diverse perspectives that add value to the organization.
• Have equal opportunities for growth and advancement, supported by transparent and fair talent management processes.

The Inclusion Model by Diversity Council Australia

The Importance of Inclusion in the Workplace

Similar to diversity, inclusivity is not just a passing trend – it’s a lasting value that translates into tangible business benefits.

Positive Impact on Financial Performance

Research by the Drucker Institute shows that companies investing in Diversity, Equity, and Inclusion (DE&I) initiatives achieve stronger business results compared to those that do not. A study analyzing 512 companies with leadership roles dedicated to DE&I and 190 companies without such initiatives found that organizations actively engaging in DE&I outperform others in several key areas:

• Customer satisfaction – 51.9 vs. 47.7
• Employee engagement and development – 53.4 vs. 47.7
• Innovation – 53.0 vs. 46.9
• Social responsibility – 54.0 vs. 46.1
• Overall organizational effectiveness – 54.1 vs. 46.4

Investing in inclusivity is not just about corporate ethics – it’s a proven strategy for driving long-term success.

Benefits of DE&I Initiatives

These results clearly indicate that organizations that deliberately implement DE&I policies achieve higher operational efficiency.

More Effective Talent Acquisition

Companies investing in DE&I attract candidates from diverse age groups and social backgrounds, giving them access to a broader, more diverse talent pool and making it easier to bridge skill gaps. According to an EY survey, 74% of employees stated that a company’s commitment to DE&I influences their choice of workplace, and 63% would prefer to work for an employer that actively implements these values rather than one that does not.

The percentage of individuals who would choose a company that prioritizes DE&I includes:

• 73% of Generation Z
• 68% of Millennials
• 53% of Generation X
• 46% of Baby Boomers.

Better Alignment with Customers

Is your team as diverse as your customers? If not, you could be missing valuable opportunities to build stronger relationships and increase sales. According to a Deloitte survey, 30% of companies report that inclusivity helps them foster deeper customer connections.

As John Berry, CEO of Berry Law, points out, clients working with diverse teams feel better understood and are more likely to establish long-term relationships with a brand. This is further supported by data from the report The Effects of Diversity on Business Performance, which shows that diverse teams are more adept at identifying customer needs. This enables them to create more effective sales campaigns that resonate with various demographic groups, ultimately driving better business outcomes.

Consumers are increasingly choosing brands that align with their values. A great example is Dove, a company that has consistently promoted diversity in its advertising for years, featuring models of various body types, appearances, and ethnic backgrounds. This approach not only helps Dove stand out in the market but also builds trust among its customers.

Building customer relationships through authentic communication and intercultural engagement isn’t just an ethical choice – it also makes it easier for customers to make purchasing decisions. As Janet M. Stovall, Global Head of DE&I at the NeuroLeadership Institute, emphasizes, diverse customers seek products and services that meet their unique needs and want them to be delivered by people who reflect their identity.

Ensuring Legal Compliance

Workplace inclusivity is critical from both an ethical and legal perspective. Many aspects of inclusivity are governed by regulations related to fair treatment, anti-discrimination, and labor rights, including:

• Anti-discrimination laws, which prohibit unequal treatment based on race, gender, age, disability, sexual orientation, or religion.
• Industry regulations, requiring companies to implement gender quotas and adapt workplaces to accommodate employees with disabilities.
• Public procurement and ESG (Environmental, Social, and Governance) requirements, which increasingly consider DE&I policies as evaluation criteria for businesses.

While inclusivity may not always be a formal legal requirement, adopting inclusive practices goes beyond merely avoiding penalties – it fosters a fair, ethical, and supportive workplace where all employees can thrive. By proactively aligning with legal and ethical standards, organizations not only mitigate risks but also build a culture of trust, equity, and long-term success.

More Effective Business Decision-Making

Poor communication, language barriers, and oversimplified assumptions can negatively impact decision-making processes in the workplace. Inclusive teams – valuing diverse perspectives, possessing broad knowledge and experience, and excelling in soft skills – are better equipped to avoid the pitfalls of groupthink and bias in decision-making. By fostering a culture of inclusion, organizations can make more informed, balanced, and strategic business choices.

Higher Employee Engagement

In many companies, low employee engagement stems from a lack of clear consequences for discrimination and the persistence of harmful stereotypes. Stereotypes arise from psychological mechanisms designed to simplify information processing but often lead to damaging oversimplifications.

According to Gallup’s State of the Global Workplace: 2024 report, low employee engagement costs the global economy $8.9 trillion – equivalent to 9% of the world’s GDP. More than 15% of the global workforce is actively disengaged, meaning these employees oppose their employer’s goals, experience lower well-being, feel less respected, and are less likely to experience daily satisfaction and joy at work.

Inclusivity is one of the five key factors influencing employees’ mental health and overall well-being. Creating an inclusive workplace fosters higher engagement because it:

• Promotes core values such as respect and empathy.
• Strengthens a positive organizational culture.
• Encourages open communication.
• Ensures equal pay and access to many benefits.
• Supports the development of specific skills and behaviors, such as active listening.

According to Diversity Council Australia data, employees in inclusive teams:

• Are 8 times more likely to report high job satisfaction compared to those in non-inclusive teams.
• Are 6 times more likely to experience a positive impact on their mental health.
• Are 3 times less likely to leave the organization.

Prioritizing inclusivity enhances employees' sense of belonging and engagement, leading to higher productivity, lower turnover, and improved business performance.

Greater Innovation and Creativity

Data from Diversity Council Australia also highlights another significant connection – inclusive teams are 10 times more innovative than those that do not actively manage diversity.

Why? Because inclusive environments foster adaptability, creativity, and fresh perspectives. Diverse teams bring together a wide range of experiences, skills, and viewpoints, enabling them to develop groundbreaking ideas and respond more effectively to market shifts. By embracing inclusivity, organizations enhance their ability to innovate, stay competitive, and drive long-term success.

Diverse Thinking Fuels Creativity, But…

While research clearly shows that diverse teams are smarter and more innovative than homogeneous ones, many organizations still hesitate to embrace them. Resistance to change, reluctance to engage with different perspectives, and the fear of the unfamiliar are among the biggest barriers to fostering workplace diversity.

Where do these challenges stem from? In part, from a lack of awareness about the benefits of diversity, concerns about losing certain privileges, and the misconception that working with like-minded individuals leads to easier collaboration and faster goal achievement.

In reality, while homogeneous teams may streamline decision-making, they also limit perspective, making it harder to identify potential risks and new opportunities. Without the healthy friction of diverse viewpoints, decisions may be made quickly – but often lack depth, resulting in missed insights and costly mistakes.

…Diversity Without Inclusivity Falls Short

Introducing diversity into an organization is an important step. While it requires commitment and effort, in the long run, it leads to better, more well-thought-out solutions. This happens through elaboration – a process of deeper information processing that integrates multiple perspectives. Employees in diverse teams:

• Think more multidimensionally.
• Consider alternative solutions.
• Develop a forward-thinking mindset.
• Challenge conventional patterns.
• Generate more ideas and better identify gaps in their assumptions.

However, diversity alone won’t drive success without inclusivity. An inclusive work environment encourages open idea exchange, creates space for challenging existing norms, and allows every team member to contribute unique value.

A great way to illustrate this concept comes from Verna Myers, who compares diversity to being invited to a party, while inclusivity is being asked to dance. In practice, this means that simply hiring a diverse workforce isn’t enough – what truly matters is creating an environment where every team member feels heard, valued, and actively engaged in the organization.

Diversity alone is not enough. Without inclusivity, even a diverse workforce may fail to reach its full potential. It is inclusivity that transforms diversity from a concept into a real asset for the organization.

Practical Guidelines: Building a Diverse and Inclusive Workplace Culture

Now that we've established the importance of inclusivity, let's explore how organizations can foster a truly diverse and inclusive culture.

Candidates, employees, clients, and investors increasingly seek to collaborate with companies they perceive as ethical and socially responsible. So how can organizations effectively promote equity, diversity, and inclusion? Here are some practical strategies to help guide your approach.

Setting a Clear and Strategic Path Forward

Begin by assessing your organization’s current stage of DE&I implementation. A useful framework is Deloitte’s DE&I Maturity Model, which categorizes organizations into five levels:

• Compliant Organization – Focuses primarily on minimizing legal risks. It has a basic understanding of diversity and inclusion but lacks a formal DE&I strategy.
• Emergent Organization – Has implemented diversity and inclusion initiatives, but in an inconsistent manner. While a DE&I strategy exists, it is not yet integrated with broader strategic goals.
• Embracing Organization – Employs a diverse workforce, and its DE&I strategy is aligned with business objectives. At this stage, the company begins optimizing diversity efforts.
• Integrated Organization – Recognizes the value of a diverse and inclusive workforce and actively engages employees from different backgrounds in talent and business initiatives. Employees feel that their opinions are valued.
• Equitable Organization – Leverages diverse experiences to drive measurable outcomes. Leaders and employees alike see diversity and inclusion as integral to business success.

Develop a Strategy for Promoting and Managing Diversity

Creating an effective diversity strategy requires a series of tailored initiatives that align with the unique characteristics of your organization while addressing the needs of your employees. Focus on removing barriers and fostering cognitive processes within individual teams.

Below are some examples of strategies for eliminating social inequalities that can serve as inspiration:

Transparent Hiring Practices

Accenture has implemented an AI-supported recruitment system based on the “blind hiring” principle, which removes information related to gender, age, or background during the initial selection stages.

Flexible Work Models

Spotify introduced the “Work from Anywhere” policy, allowing employees from diverse backgrounds to choose the most suitable work model. This initiative has contributed to increased employment among individuals with disabilities and a higher representation of women in technology teams.

Pay Equity

Salesforce regularly conducts pay audits to identify and eliminate wage gaps caused by gender or other factors.

Mentoring Programs for Underrepresented Groups

Microsoft launched the “Women in Cloud” initiative, providing women in the tech industry with mentorship and training opportunities to support their advancement into leadership roles.

What else should you keep in mind?

• When developing a diversity strategy, avoid direct comparisons with organizations at a more advanced stage of DE&I maturity. Such comparisons often lead to unrealistic expectations and misaligned priorities, making it difficult to implement effective initiatives.
• An organization at the compliance stage should define a specific, measurable tactical goal – such as improving brand reputation. At this level, implementing broad strategic initiatives carries the risk of failing to meet objectives, which could further marginalize certain employee groups.

Supporting Employees

Select methods and tools that will help you support your employees. Promoting overall equality cannot be achieved without actively listening to employees' needs. Open dialogue is essential for identifying challenges that hinder the implementation of an inclusive organizational culture. You can facilitate this dialogue through individual conversations, surveys, or mentoring programs.

Efforts to promote equality should also be continuously assessed using specific metrics and feedback mechanisms.

Providing Training

Develop a practical training plan that fosters growth for both employees and the organization as a whole. Many individuals experience intolerance or bias in various aspects of social life, which can impact their well-being and performance in the workplace. Such experiences often lead to decreased engagement, a diminished sense of security, and difficulties in building relationships within teams.

It is the responsibility of business leaders and HR teams to identify these challenges and equip employees with the tools and new skills needed to navigate them effectively. This can be achieved through education and training in DE&I (e.g., unconscious bias training), coaching programs, and the implementation of safe mechanisms for reporting concerns.

Final Thoughts: Why Workplace Inclusion Matters

Can inclusivity help build a happier and more effective team? Absolutely! Equity, diversity, and inclusion are not just values that foster a positive workplace atmosphere – they also have a tangible impact on business performance. Teams where every employee feels valued and accepted experience higher levels of satisfaction, creativity, and loyalty to the organization. An inclusive organizational culture maximizes team potential, enhances decision-making, fosters innovation, and facilitates effective collaboration.

However, simply declaring a commitment to DE&I is not enough – real action is required. These efforts should be continuously assessed and adapted to meet the evolving needs of the team and market conditions. As a result, organizations not only cultivate a more motivated and engaged workforce but also become more attractive employers, drawing top talent and gaining a competitive edge.

📖 At PeopleForce, diversity is our strength! Discover key insights in our article: “Diversity in the Workplace: A Necessity, Not a Trend – 5 Strategies to Transform Your Company’s Culture”.

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