Diversity and Employee Retention: Why It’s Important

Did you know that 67% of prospects consider inclusion and diversity in the workplace when searching for a job?

 

Key Points:

• “Diversity is the presence of differences within a given setting.” Diversity is essential to creating and sustaining a successful workplace as it supports the idea that all individuals can succeed and grow both personally and professionally. Diversity is a business strategy that needs to be built into your long-term recruitment, training, and measurement processes.
• Losing an employee can cost an employer 1.5-2.0 times the employee’s salary.
• There are tangible benefits for companies that prioritize diversity in the workplace. In fact, companies who prioritize “racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians.” Companies who prioritize “gender diversity are 15% more likely to have financial returns above their respective national industry medians.”

When it comes to employee retention, desirable benefits packages, employee recognition, bonuses, and even free coffee and tea in the office, can only get you so far. Consider: how do these retention efforts benefit an employee who doesn’t feel comfortable in their work environment to start? Today, diversity in the workplace is crucial. Here’s more on diversity and employee retention: why it’s important.

The Bare Minimum

According to Built In, “Diversity is the presence of differences within a given setting.” This might include differences in gender, religion, race, age, ethnicity, sexual orientation, education, or other attributes. 

Potential Consequences

According to research done by Deloitte University, “75% of employees feel the need to mask their differences or downplay them during work.” This, of course, negatively affects job performance, satisfaction, contribution, and overall confidence in addition to decreased feelings of security and motivation. The result is employees whose loyalties do not lie within the company they work at.

Diversity is essential to creating and sustaining a successful workplace. When employers prioritize diversity, it supports the idea that all individuals can succeed and grow both personally and professionally which in turn, retains employees.

The cost of employee turnover is extremely high—not only in cost but also in time. According to Built In, losing an employee can cost an employer 1.5-2 times the employee’s salary, so retention is key.

Diversity and Employee Retention

In a perfect world, our key executives and CEOs could craft perfect strategies that lead to foolproof employee retention. But the fact of the matter is, most executives are not completely tuned into this frequency and have a million other things on their plates.

Instead of the responsibility falling onto an executive or director alone, we can improve employee retention strategies by implementing processes and tools.

“Diversity is a business strategy that needs to be built into every decision.” -Emma Turner, Partnerships and Outreach Lead at Diversity and Ability

This includes your long-term recruitment, training, and measurement processes.

Through Recruitment 

First and foremost, employee retention begins with recruitment. More specifically, ensuring that your company has a diversified hiring process. This means ensuring your recruitment process knits together the most diverse candidate pool to start with—pooling candidates equitably and fairly. A diverse team brings the widest set of experiences, personalities, skills, and ideas while catering to a larger customer base.

Below, we’ve outlined a small handful of many ways you can ensure your company has a diverse hiring process:

• Use blind resumes: By reviewing applications with numbers instead of names, you can eliminate bias.
• Audit your job ads: As written by Brendan McConnellin, during the hiring process “you may notice that some of the language you use are more geared toward a specific demographic of experience level. If this is the case, find ways to be more inclusive in your language to appeal to candidates from different backgrounds.”
• Create a diverse candidate referral program: Chances are that your diverse employees have friends and colleagues of similar backgrounds to consider.
• Ensure your brand showcases your diversity: If your company is known for its diversity and holds policies that support these values, the right applicants will come naturally.
• Consider where you are sourcing your applicants from: Where are you currently finding your applicants? And is it from the same source every time? Mcconnellin wrote that focusing “only the sources that you know best can result in a talent pool of similar candidates and a lack of diversity. Instead, seek out opportunities to source diverse candidates where they typically hang out. For example, there are many online and offline groups dedicated to women in technology.” Where can you find the best applicants for your business?

Through Training

Your diversity policy cannot be crafted on a whim. It needs to be carefully strategized, including ongoing training and development. Just like fire safety training or sexual harassment training, diversity training is key. 

This increases employee buy-in and ensures team members understand diversity at its core, why it’s important, and how it can be managed in the workplace. Training should be an ongoing, adaptive, and organic process, not only present in one’s onboarding process.

Measurement Processes and Additional Tools

The first step in employee retention is taking advantage of tools that help management measure diversity, employee retention, and engagement. These tools include:

• Exit Interviews
• Customer Surveys
• Staff Surveys
• Employee Statistics
• Turnover Rate
• Employee Engagement Surveys
• Focus Groups
• Personal Conversations

The Benefits

There are tangible benefits for companies that prioritize diversity, equity, and inclusion (DEI) in the workplace. According to a study on workplace diversity, companies who prioritize gender and ethnic diversity are “respectively, 15% and 35% more likely to outperform less diverse organizations.”

Without high employee retention rates, your company will fail. A high turnover rate not only costs you time and money but also damages your company’s reputation and negatively impacts employee morale.

The bottom line: A company with a strong company culture and employees who feel accepted and respected, perform better. According to Deloitte, companies “who lead in diversity and inclusion also report higher rates of employee retention [and job satisfaction]. So why not reap the many rewards of a diverse and inclusive workplace?”

At Newcleus, we believe diversity and employee retention in the workplace is something companies should always prioritize. It is a constantly evolving facet of life and business. While there is no guide on how to perfect your retention strategy, your journey begins when you commit to understanding its importance and the value it can bring to your workplace.