In numerous industries, workforce diversity has become the prevailing norm. Its impact can be twofold, presenting both opportunities and challenges depending on how it is managed. Leading companies go beyond laws and regulations to create a truly inclusive culture where diversity flourishes and brings forth its best outcomes.

How to gain the benefits of diversity?

Skilled-Labor shortage is reality in global market, also in Finland. As the workforce is aging at an accelerating speed, all available workforce is needed both locally and internationally. This will increase the diversity of workforce. Diversity, defined as “the representation of multiple identity groups and their cultures in a particular organization or workgroup” (Ferdman 2013, 4) can bring many benefits to an organization beyond simply maintaining workforce headcount. Research has shown that diversity can for example increase creativity, innovation and enhance better decision making (Georgiadou, Gonzalez-Perez & Olivas-Luján Miguel 2019, 12; Greenberg 2003, 122) and thus create better chances for organizations to survive in the world of increasing change and complexity.

However, diversity alone does not guarantee positive outcomes. In reality, diversity can result in frustrations, reduced workgroup cohesion, conflicts, mistrust, and communication challenges (Ferdman 2013, 4).

While diversity in organizations can bring both positive and negative results, efforts to manage diversity by creating an inclusive environment consistently lead to positive outcomes. Inclusion means “the deliberate act of welcoming diversity and creating an environment where different kinds of people can thrive and succeed”. (Armstrong 2020, 165). To summarize, a diverse workforce merely offers the potential for increased innovation and other benefits, but without inclusion, realizing such benefits are unlikely to happen. (Shore & al. 2018, 178; Ferdman 2013, 4).

Diversity management as foundation

Organizations are often focusing on diversity management actions in their DEI (diversity, inclusion & equity) journey. Diversity management is built on laws, regulations and actions that prevent exclusion. Practices and policies such as recruiting from protected social categories, managing harassment and discrimination claims, and conducting diversity trainings establish the groundwork for fostering an inclusive organization, but alone are not enough to create a feeling of inclusion. Although organization is following strictly diversity management principles, employee might not feel included.

Shore et al. (2018, 185) suggest that companies, in addition to continuing diversity management actions, needs to focus on actively promoting practices and processes that increase the degree of inclusion in organizations. This is important because, for example, Nishii and Rich (2013, 339) state that based on studies, employees working in “inclusive organizations” report higher levels of commitment, satisfaction, perceived organizational support, and are less inclined to leave the organization compared to those working in teams with lower levels of inclusivity.

How to enhance the feeling of inclusion?

Shore, Cleveland & Sanchez (2018) say, that the level of inclusion can be advanced in organization by focusing on following themes:

• Recognizing, honoring, and advancing of diversity
• Authenticity
• Influence on decision making
• Feeling respected and valued
• Involvement in the work group
• Psychological safety

Corner stone of organizational inclusion is recognizing, honoring, and advancing of diversity, which occurs when people are treated fairly, when the diversity of the workforce is utilized to promote learning and growth, and when top management shows value for diversity. The theme of authenticity describes organization’s support for openness and enables employees to express their valued identities that might diverge from the dominant organizational culture or employee lifestyles, all with-out facing negative consequences. Influence on decision-making is an important aspect of fostering inclusivity and comes true when employees feel that their ideas and perspectives are heard, and they can influence decision making. (Shore & al 2018, 182, 185.)

Theme of feeling respected and valued involves receiving appreciation as a valued member of both the group and the organization, whether that appreciation is directed at the individual or individuals’ important identity group (Shore & al 2018, 182). The theme of work group involvement centers around the sense of being an insider with access to crucial workplace information and resources, and it has been identified as an important factor for the success of diverse teams. It includes an individual’s participation in tasks like sharing information and making collaborative decisions, as well as their feeling of being valued and heard. (Shore & al. 2018, 182; Hobman, Bordia & Gallois, 2004, 564-565.)

Lastly, psychological safety is defined as “people’s perceptions of the consequences of taking interpersonal risks in a particular context such as a workplace”. Psychological safety in teams is experienced in group level, and is a blend of trust, respect of each-others competence and caring about each-other as people. (Edmondson 1999, 354, 375.)

As mentioned above, laws and regulations provide the foundation for DEI by preventing exclusion and discrimination. This step is crucial as it establishes the “hygiene level” for diversity management, but it does not alone create a sense of inclusion. To achieve truly inclusive organization, the focus must be on concrete actions related to inclusion themes presented above. This means strategic work with clear targets and metrics, training to raise awareness, and, of course, day-to-day actions from each individual, as it is all of us who build the culture.

As summarized below by Chan (2020), inclusion is always about concrete actions that can lead to a feeling of inclusion and belonging.

“Diversity is a fact.
Equity is a choice.
Inclusion is an action.
Belonging is an outcome.”
Chan (2020)

This blog is based on the Master’s thesis by Sari Engen titled “Exploring Perceptions of Inclusion”.