How Can Workplace Diversity Impact Employee Retention?

Posted by Ashley Halsey on Jul 31, 2020 9:04:51 AM

For a number of years, diversity in the workplace has been a goal of many businesses across a wide variety of industries. The growing recognition that organizations with a diverse workforce tend to be more profitable has meant that hiring across the spectrum has meant keeping an eye on the bottom line. Further, workplace diversity is strongly associated with improved productivity, better innovation and customers report better interactions from diverse businesses. Diverse hiring is a no brainer.


An additional perceived benefit of a diverse workplace is that it improves employee retention, reducing the need for costly rehiring processes. Nailing employee retention can be essential to an organization’s success. However, the connection between diversity and retention is complicated and assumptions about diversity often lead to quick turnover of staff as this relationship is misunderstood. How exactly does diversity impact employee retention and what are the ingredients that go into the melting pot of a diverse workplace?


Overcoming Bias


Diversity in an organization usually begins in the hiring process - by making meaningful efforts to reach out to a wider pool of candidates and recruit a diverse workforce an organization's potential is greatly expanded.


However, when efforts at fulfilling a diverse quota end with the hiring process, organizations fail to capitalise on that potential. Despite revolutionizing their recruitment processes, organizations often ignore the institutional biases and cultural microaggressions that serve to create an environment that undermines efforts towards diversity.


Assessing and addressing these biases is a challenging process that entails structural change in an institution. These biases often operate unconsciously and implicitly and can be profoundly difficult to root out. Alysia Christiansen, blogger at and proposes that “identifying the internalized biases in an organization can begin with introspection at the highest levels. Analyzing the preconceptions that are interfering with your day to day decision making is challenging, but can be the first step to reconfiguring your organization for better employee retention.”


Understanding Inclusion


Employers place a great deal of focus on building a recruiting process that builds diversity, assuming that inclusivity is something that naturally follows from having a diverse organizational environment. This common mistake often serves to undermine employee retention, and thus undermine those recruitment processes so highly valued.


Diversity and inclusions are bedfellows, but crucially distinct. Diversity deals with the identity - sexual orientation, race, age, etc. Ingrid Myles, freelance writer at and explains that “inclusion seeks to understand the lived experience of diversity, and promote ways in which those experiences are accepted, valued and understood. Inclusion is therefore a key principle to be tackled by any organization seeking to extend the impact of diversity on to employee retention.”


Simply hiring employees from a diverse background and then ignoring the way that, say, a black woman experiences the workplace differs from her gay white colleague is a process that’s destined to fail. The benefits of a diverse workplace on productivity, profit and employee retention emerge when diversity and inclusion are combined so that the varying experiences of a diverse workplace can begin to impact organizational outcomes.


Change For Good


A recruitment process that emphasises diversity is the first step to building a smarter, more innovative and effectively productive workforce. Getting the best out of that workforce depends on creating an environment where diversity can thrive. By applying principles of inclusion and working to understand the way that implicit biases affect decision making in an organization are essential steps to take. And further, it’s crucial to recognize that this is a continual process, one which is renewed each day.


Diversity and inclusion aren’t generated by static behaviour, they require a dynamic approach that consists of entrenched perspectives being challenged daily. Employee retention is impacted most significantly when employees are empowered to speak honestly and openly about the way that organizational structure affects them.


Translating diversity in the workplace into profound cultural change that enables its impact to be felt on employee retention can be a daunting task, but the work involved is transformational on both individual perspectives and organizational culture. Diversity can have a valuable impact on employee retention - if the background work around biases and inclusivity is done.

Topics: Inclusion, Workplace Culture, staff retention, overcoming bias, understanding inclusion, change for good

VERCIDA Group is a global inclusion consultancy and talent attraction organisation. We specialise in diversity onboarding, leadership development programmes, and creating inclusive work cultures. VERCIDA group consists of and VERCIDA Consulting

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