How Inclusion Improves Diversity And Company Performance

posted on July 17, 2020

July 13, 2020

By Paolo Gaudiano, Forbes

Although the words “diversity” and “inclusion” have become nearly inseparable in our collective jargon, when it comes to measuring impact or creating initiatives, the vast majority of our attention falls upon diversity.

The main reason for this, as I have argued in an earlier blog, is that diversity is very easy to measure and quantify, whereas inclusion is difficult to define, let alone measure. My colleagues and I have developed a way of defining inclusion that makes it measurable, and we have argued that focusing on inclusion overcomes some of the negative aspects of focusing on diversity.

What I want to emphasize in this blog is that, although diversity is clearly linked to company performance, inclusion in some ways is more fundamental, as it can increase both the level diversity and the performance of a company.

Intuitively, it makes sense that inclusion would influence diversity. We can make a stronger statement, namely, that inclusion is a requirement to establish or grow diversity: if a company fails to be inclusive toward employees, especially those whose characteristics differ from the characteristics of majority employees, the company will find it hard both to recruit and to retain a diverse workforce. On the other hand, if a company has a strong reputation of being inclusive, it’s more likely that someone from a different background will be willing to start working there, even if the company is fairly homogeneous.

Of course, regardless of how inclusive a company may be, increasing its level of diversity is unlikely to happen if the company is completely homogeneous and if it does not actively recruit candidates from outside of its own network. Also, if a company is completely homogeneous, it is less likely that its leaders and employees will be truly inclusive to everyone.

The situation with diversity is different. As the previous sentence would suggest, having some diversity seems like an important ingredient to foster an inclusive culture. However, simply increasing diversity by recruiting candidates from a range of backgrounds will not, by itself, guarantee an increase in the level of inclusion. This is especially true when organizations “hire for diversity” primarily at entry level, because in almost every organization, the overall attitude toward inclusion is set from the top. In fact, what many companies have found out is that trying to increase diversity by hiring for diversity at the entry level often backfires, leading to internal strife and high churn rates, as the new employees face incidents that cause them to leave.

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