Building Inclusive Workplaces: Understanding the Different Types of Diversity

Establishing a healthy company culture is integral to business success. Strong company cultures have an incredible impact on employee engagement, motivation, and creativity levels.

One of the primary aspects of a healthy corporate culture is building a diverse workforce and maintaining an inclusive environment. A diverse workplace is one in which various types of diversity are included and accepted for their unique perspectives. 

Workplace diversity comes to life in numerous ways. In today’s guide, you’ll find a brief overview of the different types of diversity to help you understand them and cultivate a more diverse workforce.

Establishing organizational diversity is becoming more essential for companies around the world. This is because data shows that newer generations in the workplace are far more diverse in terms of ethnicities, races, and cultural backgrounds, as highlighted in the articleDiversity Defines the Millennial GenerationOpens in a new tab by The Brookings Institution. Diversity is the present and future of work.

Nurturing diversity in the workplace will better position the organization to benefit from all the different perspectives, experiences, and skill sets that come along.

Better teamwork

Besides creativity, a recent report by Harvard Business School found that cognitively diverse teams are better at solving problemsOpens in a new tab, and therefore, make better business decisions. 

Overall, valuing diversity in a workplace will encourage team members to be more inclusive and create an environment where everyone will feel more valued, appreciated, and respected. 

Better business outcomes

A recent study published in the Academy of ManagementOpens in a new tab also found that companies with improved diversity outperform their less diverse competitors by a decent margin.

According to FortuneOpens in a new tab, this improves various metrics within the workplace, such as engagement, productivity, and even employee retention. Moreover, the positive social reputation of the company will improve its chances of hiring new talent.

However, to fully realize the advantages of workplace diversity, companies shouldn’t only hire a diverse workforce but also work on fostering an inclusive culture that respects and values diverse perspectives.

Ideally, workplace diversity can be classified into three main types (internal, external, and organizational), each with its own subtypes. Here’s a quick look at each:

Internal Diversity

Internal diversity relates to the variations that represent the core identity of an employee. These types of diversity include:

Race

Racial diversity encompasses all the different social constructs associated with certain groups of people, including physical traits and social and cultural backgrounds.

A company with healthy racial diversity will have employees from different races represented in the organization’s community.

Gender and sexual orientation

Gender diversity is being redefined from the traditional gender identity sense of males and females. This also applies to sexual orientation, both of which are becoming more understood as fluid spectrums in the push for gender equality.

Embracing gender diversity as well as diversity in sexual orientation brings many advantages, as it exposes the employer to a larger talent pool and encourages employees to collaborate and bring in different perspectives.

Mental/physical abilities

Embracing neurodivergent employees, such as those on the autism spectrum, and providing them with the assistance necessary to do their jobs is a sign of a healthy workplace.

The same goes for employees with limited physical capabilities, such as wheelchair-bound employees. This is a reminder that embracing diversity in physical abilities may require you to ensure your workspace is inclusive and accessible. 

Age

Age diversity represents the variation in age groups within the working teams in a company. 

People of various ages have different backgrounds and unique experiences related to their age groupsOpens in a new tab that can provide a broader range of ideas while working on projects. Additionally, they help in eliminating unconscious bias while designing products and services.

External

External diversity represents all the aspects of identify that are not intrinsic to a person’s being. Examples with help you understand how they are different from internal diversity, so let’s check them out:

Geographic location

The geographic location of a person can heavily influence how they think and act, whether they’re potential customers or employees.

For that reason, including employees from different geographical backgrounds is a must for any multinational business. 

Similarly, hiring employees from a specific location can provide you with great insight if you’re planning to expand to that local market.

Income

Income diversity is often regarded as a double-edged sword within a company. On one hand, a person from a particular socioeconomic background can bring in a unique perspective, especially if you target a certain economic demographic while designing products and services.

On the other hand, variations in current socioeconomic status can create rifts and tension between employees within the same team if the differences are too vast or inequitable.

Habits

Diversity in habits can take a variety of forms, including personal and recreational habits. Personal habits describe personal preferences and lifestyle choices, but they can also include professional aspects and how they handle work and daily tasks.

Recreational habits usually describe how employees like to spend their free time. While this may not sound related to work, creating an environment that embraces these habits can massively improve their overall performance and job satisfaction.

Religion

Employees’ spiritual beliefs are something that they hold sacred and will have a major impact on many other aspects, including how they handle work.

For that reason, creating a workplace that embraces all different spiritual and religious diversity is critical for establishing a more accepting environmentOpens in a new tab. 

This can be done by providing a space for practicing different religions and enforcing policies that protect employees’ religious beliefs.

Work experience

This one involves hiring employees with different levels of work experience. Experienced employees can bring in tried-and-true approaches while new employees can bring in fresh and unique perspectives to solving problems.

This combination doesn’t only help in balancing your teams and widening their perspective, but it also creates a healthy cycle of knowledge sharingOpens in a new tab and saves you the hassle and expenses of hiring experienced employees in the future.

Cultural

Cultural diversity should be respected because it encourages employees to feel safe and make the workplace more dynamic and open-minded while abolishing discrimination against certain groups of people.

Embracing and celebrating cultural diversity can be as large as meaningful celebrations of marquee days or in the equally impactful act of not discouraging culturally-valued clothing and hairstyles.

Organizational

While internal and external aspects are more concerned with diversity from the employee’s perspective, organizational diversity is more geared toward company culture and achieving equality and equity between employees.

Classification

Classification diversity describes how companies structure their job and function levels. This includes identifying the roles of each job and hiring qualified employees to handle these tasks.

To manage classification diversity in a workplace, you must promote open communication and respect for different thinking styles by providing training on effective communication. 

This is because employees with different cognitive styles may struggle to understand the perspective of other employees.

Division and department

Department diversity in a workplace refers to the diversity of functional areas within an organization.

Functional diversity can include establishing departments such as marketing, human resources, finance, operations, etc. 

Each one will typically have its unique set of skills, expertise, and roles that contribute to the overall success of the organization.

Seniority

Seniority is a major aspect of an organization and it refers to the duration and tenure of each employee within a company.

Achieving seniority diversity allows your organization to enjoy the advantages of highly experienced veterans within the company without missing out on the fresh ideas that new employees can bring in.

Work location

Slightly different than geographic location, another form of diversity among employees is represented in work location diversity. For instance, some companies can have multiple sections/departments that operate from various facilities.

In that case, you have to make sure that work policies and laws are fair to different employees and inclusive no matter where the team is operating from.

As mentioned earlier, diversity in the workplace has a massive impact on some of the most important business outcomes.

Now that you know more about the different types of diversity in a workplace, here’s a quick look at the benefits of establishing these values in a workplace:

Creative problem-solving

Diversity in the workplace, supported by innovations in DEI and AI, increases the chances of achieving better opportunities for creativity and problem-solvingOpens in a new tab. Diverse perspectives and diverse backgrounds combine to widen the range of ideas and suggestions a team will have to move your business forward.

Better decision-making

No one can tell the future, but with a diverse team, you can peek around more corners and identify more pitfalls to avoid when making key decisions. When every employee is valued and heard, you get a better decision-making processOpens in a new tab.

Increased productivity

A diverse and inclusive workplace leads to more ideas, better decision-making, and an overall feeling of value. It leads to more engaged, connected, and yes,  more productive teamsOpens in a new tab. 

Lower turnover

Diversity in the workplace helps create community, and community is hard to walk away from. If we’ve said it once, we’ve said it a thousand times: diversity is a retention strategyOpens in a new tab. 

Improved company perception

It seems obvious, but it bears repeating how you treat your employees has a pretty significant impact on how they view you. The same goes for customers and every other stakeholder. A company that values a diverse team is more positively perceived than one that does not.

Here are some valuable tips and strategies to create diversity in a workplace:

Foster inclusion 

It’s not enough to have a diverse workforce. To nurture and maintain diversity, you need to create an inclusion-oriented culture, too. This might involve specific training and resources to make sure that all employees are recognized, respected, and accepted as they are.

Recruit with diversity in mind

Decades of discriminatory hiring practices have often left certain employees at a disadvantage. Encourage recruiters to expand the focus of their search to find candidates with various backgrounds, especially internal and external types of diversity.

Educate current employees about diversity

How do you measure diversity in a workplace?

There are various methods to check an organization’s diversity, including monitoring different demographics within a company, such as:

How to integrate inclusivity into the company’s core values?

While integrating diversity into a company may require major changes, here are some quick steps you can take to build momentum internally.

Establishing and maintaining diversity and inclusivity within a workplace is an iterative process. Because there are so many types of diversity and ways in which they intersect, it's likely that you will need to regularly update your diversity policies.

This requires commitment and continuous updating of policies and codes of conduct to make sure that everyone feels heard and included.

Think of these efforts as investments in your employees’ well-being and humanity. Cultivating feelings of belonging encourages them to engage meaningfully, enhances their creativity, and ultimately helps your business.