Please select your preferred region.
Please select your preferred region.

What is Diversity and Inclusion In The Workplace?

Diversity and inclusion (D&I) has become an essential part of the workplace. But what does it mean, and why is it so important?
Published 15 Jul 2020
Updated 1 Dec 2022
12 min read
What is Diversity and Inclusion (D&I)?

It’s safe to say we all know diversity and inclusion (D&I) matters. McKinsey research has shown that companies with greater gender diversity are 21% more likely to outperform others and those that are ethnically diverse are 33% more likely to outperform others. Why is this?

With an increase in migrant workers pursuing careers overseas, coupled with the jump in demand for skilled workers, diversity has now become a key driver for economic growth.

The benefits of a diverse workforce help to increase productivity for businesses wishing to succeed in the global market. And yet, according to SurveyMonkey, 26% of employees don’t feel like they belong at their current company. This is an alarmingly high percentage of people.

Although company intentions may be well, it often takes significant work to implement a culture that truly embraces and encourages diversity and inclusion.

What can you do as a business leader to enact change? Although as a society we arguably have a long way to go, businesses can do their part by committing to not only embracing diversity but to also actively encourage inclusion within their teams.

So why is it important to build a culture that champions diversity and inclusion in the workplace? Let’s start with a few definitions first.

What is diversity and inclusion (D&I)?

Although the two go hand in hand, diversity and inclusion are two separate concepts with equal importance.


Diversity refers to any element that can be used to differentiate groups or individuals. In essence, it’s all about empowering people to respect and appreciate their differences such as gender, age, ethnicity, sexual orientation, religion, disability and education.

Diversity provides a safe environment for these differences to be celebrated and nurtured. It focuses on understanding what makes us unique and why that is important.

This allows us to explore how such valuable dimensions of diversity can be leveraged both in the community and the workplace. Each unique individual within a business provides an enriched and diverse set of experiences, perspectives and ideas.

The benefits of diversity can only be reaped once we acknowledge how important these differences are to a person’s identity. Once a person feels they’re respected and valued regardless of their background, they’re far more likely to work productively.

All in all, businesses who embrace diversity are better equipped for success.


Now, a lot of Australian companies can probably say they’re doing reasonably well at diversity, it’d be hard not to with our nation’s remarkable multiculturalism.

In fact, Australia is the most ethnically diverse country in the world with the 2016 census showing that 26% of us were born overseas and 49% have at least one parent born overseas.

But, it’s not enough to have workplace diversity, you have to ensure that these diverse voices are seen and heard across the business. In fact, Deloitte argues diversity without inclusion is not enough.

For a business to be successful, the two must be combined. As mentioned earlier, there are a number of rich dimensions of diversity. Many are self-evident while others can be more inherent, such as educational training or personality types like extroverts and introverts.

An inclusive workplace model is an integral part of making employees feel valued and respected as individuals.

While diversity is about appreciating differences, inclusion focuses on encouraging those differences to work collaboratively.

In a business context, inclusion involves a team effort in which various backgrounds and levels of experience are socially and culturally accepted. It’s important for businesses to extend beyond just acceptance, to also embrace and treat such differences equally.

Participation in meetings, office layouts, access to information and open invitations to social events are all factors of an inclusive culture.

The process of inclusion helps to engage people in their work and make them feel like an important member of an organisation. This kind of culture can help to create higher-performing teams with strong motivation and morale.

The great ‘inclusion’ debate

The definition of inclusion is often up to individual interpretation. There is significant debate around what this word means (especially in the context of a business), as a person may be included within a group but not necessarily feel a sense of belonging. Inclusion without belonging can be perceived as tokenism, which can have a negative effect on diversity.

Employees from underrepresented communities or backgrounds may feel like a token hire for businesses wishing to enhance their diversity profile. Here minorities often end up feeling as though they’re ‘on the team’ but not necessarily ‘a part of the team’.

You’ll find retention quickly becomes an issue as people seek places they’ll feel respected and appreciated.

A more holistic definition of inclusion means to treat people equitably and with respect. The term brings about a feeling of connectedness, without fear of embarrassment or rejection. In a nutshell, inclusion is about belonging.

What is inclusive leadership?

Fostering a diverse and inclusive workplace culture starts with leadership. Each employee wants to feel as though their unique attributes and experiences are valuable to the team, so it is up to leaders to ensure this.

Deloitte identified six signature traits of an inclusive leader, all of which are interrelated:

  1. Commitment: Inclusive leaders are dedicated to D&I as it aligns with their own personal values. They are committed to articulating their beliefs and feel responsible for change.
  2. Courage: they are humble by nature, not afraid to speak out and encourage others to contribute their unique ideas.
  3. Cognizance of bias: they are aware of their own blind spots and work hard to quash any internal biases. They also work hard to prevent bias within others.
  4. Curiosity: they are open-minded, curious about others, listen without judgement and always seek to understand.
  5. Culturally intelligent: they learn and recognise the importance of other cultures.
  6. Collaboration: they empower people to bring their differences together and work collaboratively. They create a safe space for diversity of thought.

Deloitte diversity and inclusion

Source: Deloitte

What are the benefits of D&I?

There are endless benefits to investing in D&I, so we’ve handpicked our top four to help inspire and motivate change:

1. Diversity of thought and perspective 💭

Different backgrounds bring different perspectives. Each individual has their own unique characteristics with a diverse set of skills and lived experiences. These differences in opinion, values and beliefs are useful for any business discussion.

When it comes to making decisions, you want your teams to provide ideas, feedback and suggestions. Diverse perspectives are highly beneficial for innovation as it allows for a greater understanding of how different people think and feel.

When designing a product or service you want your team to be able to put themselves in the customers’ shoes to provide the best possible solution for a problem. If you have a largely homogenous team that think alike, you lack the ability to experiment and empathise with various customer profiles.

All in all, diversity of thought leads to better decision making and design.

2. Increased creativity and innovation 🚀

Exposure to a variety of diverse perspectives and worldviews has been linked to greater creativity. When you put a group of people together who can view the same problem from multiple angles, you have a range of creative ideas to choose from.

Diverse teams take a collaborative approach to creativity. Homogenous teams are less likely to experiment and innovate quickly or creatively as opposed to a heterogeneous team of people. This is because diverse ways of thinking provide a safe space for positive conflict to flourish.

By bringing various different expertise to the table, ideas can freely bounce off one another to help get those creative juices flowing. This also leads to faster problem-solving.

The quicker you can provide new and exciting solutions to the market, the stronger your competitive advantage becomes. While it may feel comfortable to work with people who share the same ideas, values and experiences as you, this can be extremely counterproductive when brainstorming innovative solutions.

Conformity has been known to discourage innovative thinking. Enriching your team with representatives of different genders, races, and skills is key for boosting your intellectual potential.

3. Higher employee engagement 💡

This point is definitely one of our favourites. At Employment Hero, we are all about creating an engaging and welcoming workplace for employees. There is no hiding the fact that a more diverse and inclusive workforce leads to higher staff engagement.

The link is pretty straightforward – when people feel included, they are also more motivated to work hard.

You want your teams to take pride in where they work and be excited about working for a business who values their uniqueness. A sense of belonging is crucial for engagement. Every staff member wants to know they have equal opportunity and access to information and support.

Let’s not forget that the more engaged, happy and motivated an employee is, the more likely they are to stay.

When businesses commit to diversity and inclusion initiatives, their employees are 80% more likely to rank their employer as high performing. It’s safe to say that companies with rich D&I initiatives experience greater profits and reduced turnover.

4. Strong brand reputation 🏆

As a business, your brand is everything. It’s how your customers and employees see and perceive you within the market. Companies dedicated to building a more diverse and inclusive workforce are considered to be socially responsible.

For customers, this means they can better relate to your brand and develop a sense of loyalty.

Prospective candidates are also more likely to join the team if they feel like their unique qualities are valued. This helps to bolster your retention and recruitment efforts. It’s easy to understand why top talent would choose a company which showcases high levels of diversity and inclusivity.

Job seekers are more able to see something within your company that resonates with them, making it more enticing to apply. A survey conducted by Glassdoor found 67% of job seekers believed a diverse workforce to be one of the most important factors when evaluating companies and job offers.

Why is D&I important?

As Australia grapples with the economic fallout caused by the COVID-19 pandemic, research highlights the importance of implementing D&I initiatives to bolster business performance.

A new report released by the Bankwest Curtin Economics Centre (BCEC) and the Workplace Gender Equality Agency (WGEA) in June this year suggests women in senior leadership can help drive better company profitability.

In fact, the report found a 6.6% increase in the market value of ASX-listed companies – the equivalent of AUD 104.7 million. However, women currently represent only 17.1% of company CEOs. Not to mention 29.8% of companies have zero female representation on their Board.

Report author and BCEC Principal Research Fellow Associate Professor Rebecca Cassells believes “When businesses are looking to a post COVID-19 world, our research shows that having a female CEO has the potential to help companies navigate through the crisis”.

McKinsey also conducted several year-long studies on diversity in the workplace. Their latest report, Diversity Matters, focuses on 366 publicly listed companies across multiple industries within Canada, Latin America, the United Kingdom and the United States.

The data suggests companies in the bottom quartile both for gender, ethnicity and race are less likely to achieve above-average financial returns.

McKinsey diversity database

Source: McKinsey diversity database

The numbers and statistics highlight the ongoing D&I work that needs to be done, even as D&I programs continue to gain traction. It’s not surprising that businesses with strong diversity initiatives are outperforming those without.

The majority of organisations today recognise the opportunity diverse and inclusive leadership provides and represents. This also rings true for your talent pipelines which involve attracting, mentoring and retaining top talent.

With the numerous benefits D&I provide, we believe now is the time to invest.

What is the purpose D&I strategies?

Now that we understand more about diversity and inclusion, we can start to do the work.

The most important question to ask is: what are we trying to achieve when we’re putting together our D&I strategies?

1. Remove unfair barriers

Everyone should have access to fair employment, and feel safe when they are at the workplace. Unfortunately, for many groups of people, there are a lot of barriers that stop this from happening.

To discover what barriers exist in our workplaces, we can examine hiring, employee experience and employee growth, begin by asking:

  • Do all groups feel like they are welcome to apply for a position at the company?
  • Are they considered fairly and in an equitable way when they are undergoing the recruitment process?
  • Do employees feel encouraged to share their ideas at work, do they feel rewarded for their achievements and free to be their authentic selves with their colleagues?
  • Do they feel encouraged to grow and be given promotion opportunities?
  • Are they supported in development and urged to pursue leadership roles?

These are often areas where people from diverse groups find themselves encountering barriers.

What can be drivers of these barriers? It can be unconscious bias – where leaders or managers may be making decisions or comments that are discriminatory without intending to. But it could also be conscious bias.

Openly discriminatory discussion and actions can still take place, even within companies that consider themselves to be progressive. This needs to be called out and challenged.

Most people generally assume they aren’t biased, but this doesn’t mean they shouldn’t look deeper into their actions. Research shows that people who believe strongly in their own objectivity – they believe they already take a neutral standpoint – are actually more likely to make discriminatory decisions.

Understanding different needs and experiences

In the Journal of Business Ethics essay ‘Building an Inclusive Diversity Culture: Principles, Practice and Processes’ (2004), Nicola Pless and Thomas Maak explore the essential need for colleagues to listen and understand each others’ experiences.

They suggest this can be made easier when a company has a culture of active listening, consideration and trust. When you have a better understanding of your staff’s perspectives, it will be easier to provide assistance where required and create a fair and welcoming environment.

Implementing feedback sessions through 1:1 meetings can foster a culture of trust, openness and active listening between staff and managers.

Treating everyone with respect

It goes without saying that everyone deserves to be treated with respect and dignity. Every person in a company is an individual with different skill sets, ideas and feelings. This is at the very heart of diverse and inclusive workplaces.

When employees feel engaged and respected by the company and other team members, they’re more likely to have a greater sense of wellbeing and they will want to actively contribute to the company’s success.

When employees feel like they are not being shown respect, their sense of wellbeing can suffer – they often disengage and might even resign.

An atmosphere of inclusion

When you have created a workplace that values diversity, you don’t only implement policies and formal goals – you have a culture of inclusivity. In an inclusive culture, everyone feels welcome at the table.

Ideas are free-flowing between members of your team, each person feels equally valued, and everyone feels nurtured for growth within the workplace.

Pless and Maak speak to this ideal company culture – “In such an environment different voices are respected and heard, diverse viewpoints, perspectives and approaches are valued and everyone is encouraged to make a unique and meaningful contribution.”

Recognise and reward your staff for sharing great ideas. Check out how Employment Hero can help create a culture of peer-to-peer recognition.Diverse recruitment interview

Celebrating difference

When your business is powered by diverse thinking, it has the best chance of succeeding, thriving and growing. Difference is an asset to your business. Diversity should not just be accepted, it should be sought out and celebrated.

What are other businesses doing?

Diversity and inclusion can be a challenge for any business regardless of its size. Inclusion often requires a shift in mindset and culture, especially for those who have previously held a largely homogenous workforce.

If you’re new to the concept of D&I, look at how other industry experts tackle the problem.

To increase the number of women in STEM-related fields such as engineering, Canva recently partnered with Project F, a new initiative targeting female representation in tech. The company commenced ‘Program 50/50′, in November last year.

The initiative transcends traditional diversity and inclusion measures to help bridge the gender gap in tech-related roles within Canva.

“Stronger female representation across all facets of our organisation – from engineering and product management through to operations – the more gender-equal we are helping to ensure we’re able to empathise with our community and build a more inclusive product.” – Crystal Boysen, Head of People at Canva.

At Accenture, diversity training takes place within the organisation. The program is broken into three categories;

1. Diversity Awareness – to help people understand the benefits of a diverse workplace,

2. Diversity Management – to equip leaders with the tools to manage diverse teams and

3. Professional Development – to enable women, LGBT and ethnically diverse employees to build skills for success.

The wrap up

The more diverse and inclusive a company, the more innovative they become. New ideas almost always stem from different ways of thinking. The true value of diversity is diverse thought and perspective for strategy and problem-solving.

Additionally, let’s not forget the power of D&I in establishing a strong brand image. This helps your business acquire customers, attract top talent and retain employees.

A level playing field with fewer obstacles helps to mitigate bias and give everyone the same opportunity to thrive within an organisation.

D&I work isn’t an easy process and it’s not something that can be achieved overnight. But the key is getting started. The earlier you can implement workplace initiatives to foster a more diverse and inclusive environment, the better you will be in the future. The longer your company waits, the harder it will be to implement change.

Ultimately, the growth of your business is largely intertwined with the growth of your people, customers and community. If your company seeks ongoing innovation, look no further than a diverse and inclusive workplace.

Here are more diversity and inclusion resources:

We want to hear from you. Are you a proud D&I champion for your business? Get in touch with us at and tell us your story. We want to showcase the culture game-changers.

Download now

Diversity and inclusion handbook

The Team
Employment Hero -
Explore by industry