Cultivating a Culture of Equity and Belonging: Integrating Diversity and Inclusion in Effective Talent Management Strategies (Article 07)

Talent management (TM) represents one of the fastest-growing areas of both academic research and HRD practice. Since the proclamations of a “War for Talent” in the late 1990s, talent management has become one of the most common terms in the managerial and HRD practitioner lexicon (Minbaeva & Collings, 2013 ). Indeed, in many areas, TM remains firmly positioned as a normative and exclusive practice that targets the development—from both external and internal sources—of a small proportion of high-performing and high-potential employees in an organization ( Gallardo-Gallardo, Dries, & González-Cruz, 2013 ).

Diversity”, refers to an employee base that is representative of the differences apparent in the broader society (Wah, 1999). “Inclusion” involves acknowledging and utilizing these individual differences in their work environment, such that the individual is engaged and his/her performance is subsequently enhanced (April et al., 2009; Giovannini, 2004).

The challenge with diversity and inclusion literature is that the definition of diversity and inclusion varies between researchers (Prasad et al., 2006). For example, when Cox and Blake (1991) address diversity management in multicultural organizations, it is clear through their definition of a multicultural organization that inclusion is an implicit outcome of this organization type. Other authors such as Roberson (2006), Ferdman et al. (2010), Davidson and Ferdman (2002), and Pless and Maak (2004) use the terms diversity and inclusion to ensure the explicit understanding of inclusion in their research. 

Diversity and inclusion: components from diversity and inclusion management models

When creating a multicultural organization, top management needs to show their commitment (Allen and Montgomery, 2001; Booysen, 2007; Thomas, 2002) to the change process by clarifying their organization's vision (Allen and Montgomery, 2001; Booysen, 2007; Thomas, 2002) and through communicating the business, moral and legal imperatives for change ( Booysen, 2007; Human, 2005; Thomas, 2002). Human (2005) says that leaders should define what they mean by “diversity” and should be clear about the type of culture they want to create ( Booysen, 2007; Thomas, 2002). Booysen (2007) suggests that a diversity leadership team should be elected, a diversity strategy created, and that employees should be co-opted into the diversity and inclusion journey through clear communication. Cox and Blake (1991) assert that there should be an organizational identity that includes all identity groups present in the organization. 

Further, they recommend that cultural bias in the form of prejudice and discrimination should be systemically addressed and stress that “minority” cultures should be integrated into the organization’s norms and values (Cox and Blake, 1991). Thomas (2002) advocates that organizations should reengineer structures to support their diversity journey. These might include changes to the training and educational programs, affirmative action programs, targeted career development programs, performance appraisals, reward systems, HR policy, and benefit changes, language of job descriptions, and job evaluations (Allen and Montgomery, 2001; Cox and Blake, 1991). Thomas (2002b) further suggests that change should happen at all levels of the organization including organizational, interpersonal, and personal levels ( Louw, 1995; Schultz et al., 2008).

Diversity & Inclusion in the Workplace  

Diversity and Inclusion have become and is currently becoming the main focal point for organizations at present. This is due to the following reasons such as an increasing level of participation from female workers and the growth of employees coming from various ethnic backgrounds, as a result of globalization (Garg and Sangwan, 2021). Furthermore, there has been much greater diversity in the workplace at present, in comparison to previous years, whereby, employees experienced various challenges simply because of their age, gender identity, race, ethnicity, religious belief, and ability (Business Ethics, 2021). According to various studies carried out on the topic of Diversity and Inclusion, it is simply not just about being socially and politically compliant but rather a responsibility that should be embraced and practiced by organizations across all industries (Pepple, 2017). The topic of diversity and inclusion is a work-in-progress for many, whether it be for scholarly or business purposes, as it plays a critical role in the whole area of Human Resource Development (HRD), and this gives focus on adapting to different approaches and understanding different perspectives in the workplace (Pleasant, 2017).

The shift from managing diversity to leveraging it creates an emphasis on the fact that adopting certain practices in order to manage diversity is no longer sufficient but rather taking further actions towards adopting initiatives that will aid organizations in capitalizing on diversity to achieve and sustain employee engagement, which has a direct impact on innovation and performance (Garg and Sangwan, 2021). Organizations are currently hiring individuals from all backgrounds, regardless of age, gender, sexual orientation, race/ethnicity, education, and social status, as a way to diversify their workforce, which reflects the demographics of the country (Sabharwal, 2014). Having diversity management processes in place, which also influences valuing the differences in the workforce, are functional and structural changes that assist in the recruitment and retention of individuals, which affects the creation of an inclusive environment in the workplace (Sabharwal, 2014).

The commitment towards Diversity and Inclusion initiatives in the workplace should be prioritized by management, as through this, employees will feel that their organization is truly committed to representing and involving all the employees, regardless of their age, gender identity, sexual orientation, race, ethnicity, beliefs and other factors, which will have an impact on employee engagement, organizational performance, and profitability, as well as the employee retention (Hayes et al, 2020). 

Diversity and inclusion are ongoing topical issues in the workplace, across all industries due to the fact that it impacts organizational competitiveness, performance, and profitability. Therefore, the following section will discuss the significance of diversity and inclusion in the workplace when properly managed.

Significance of Diversity and Inclusion

In the last number of years, the topic of diversity and inclusion has become an indivisible part of conversations due to its significant impact on organizational culture, performance, and success (Fazal, 2020). The concept of diversity and inclusion may be separate but are related simultaneously, due to the fact that it aids in shaping and defining an organizational culture, which places the company at a competitive advantage (Davis, 2018). Despite the connection between diversity and inclusion, it is imperative for the organization to understand them individually in order to assess their level of importance and impact on one another, as having a diverse workforce does not necessarily mean it is inclusive, nor does having an inclusive environment automatically indicate a sense of belonging, because that is not the case. In spite of the organizational efforts in fully embrace diversity and inclusion, it is still a debatable topic due to the inconsistencies, whereby in some cases, it is only implemented verbally but not physically put into practice (Phillips, 2008).

Despite the clear benefits of diversity and inclusion on organizational performance and profitability, many still suffer from the difficulty in implementing it correctly, due to the lack of connection between senior management and employees, and their perceptions of diversity and inclusion (Bourke and Dillon, 2018). As mentioned in previous sections, leveraging diversity and inclusion is a necessity for organizations as this is beneficial in promoting employee engagement. Valuing the differing contributions of input from employees not only encourages engagement but also fosters innovation, as a result of the combination of diverse inputs, which places the organization at a competitive advantage (Derven et al, 2014). 

Managing diversity is inevitable in an organization due to the fact that it reflects the demographic changes, which are also impacted by globalization and the constant innovation in technology, where a clear understanding of the importance of diversity and inclusion in the workplace will have a positive impact on the business (Personio, 2021). When diversity and inclusion are understood and implemented correctly, in a way that words are turned into action, it creates a domino effect from its impact on job satisfaction, which increases the level of engagement, which then affects performance positively (Ohunakin et al, 2019).

The ability to recognize and promote the uniqueness of the various groups within a diverse workforce is simply not just an instrument used to improve organizational performance, but its inevitability, meaning that it can no longer be ignored or set aside, as this is crucial for attracting talent to meet and exceed the demands of the industry (Vohra et al, 2015). The effective implementation and maintenance of diversity and inclusion practices build a positive attitude and behavior of employees toward their roles and the organization (Itam and Bagali, 2018). Furthermore, when organizations commit to fostering an inclusive environment based on trust, where the presence of connection and support is felt between employees and management, this directly impacts employee engagement and organizational performance, which greatly contributes to innovation, as this is a critical attribute in the current global business markets (Korn Ferry, 2015).

Integration of Diversity & Inclusion with Talent Management

In the current changing economy, there has been a heightened focus on diversity and inclusion strategies, as this greatly impacts talent management, which is an essential ingredient for the success of organizations globally (Jenkins, 2021). As a result of globalization, organizations have been adapting to the trend of creating a diverse and inclusive environment in the workplace, however, it is still work-in-progress for a majority of companies (Polonskaia and Royal, 2019). The integration of diversity and inclusion with talent management is imperative, due to the importance of leveraging diversity in skills and perspectives, whilst valuing every employee equally, which creates an equitable opportunity for growth and development in the organization, as well as respecting them regardless of any difference (Derven, 2015). Diversity and Inclusion is simply no longer just about compliance or meeting the expectations of the public, but rather an organizational culture where the uniqueness of every employee's needs, perspectives, and potential are equally provided, understood, and seen, which results in higher performance, commitment, innovation and trust (Great Place to Work, 2021).

As a result of demographic changes and the increasing competition in business and for talent, the integration of diversity and inclusion with talent management is of greater importance. A workplace that creates an adaptive culture through organizational identity, stimulates individual judgments on how to steer through some of the conflicts in the company, which results in flexibility, innovation and openness to the various working styles employees of various backgrounds may have (Hutt and Gopalakrishnan, 2020). Downey et al (2015) found that integrating D&I with organizational talent management practices portrays the commitment the company has to support employees from various backgrounds, the level of skills, and the knowledge they have.

Managing diversity and inclusion in the workplace is so much more than just hiring talents from various backgrounds with various skills, but the importance of creating transparency, where the policies published in the company handbook is visible in practice, whereby the employee perspectives and contributions are truly valued by the organization (Glassdoor, 2021). 

Impacts of Diversity & Inclusion on Employee Engagement

Studies have found that diversity and inclusion are interlinked, and the connection is visible in the perceptions of the employees towards the actions and policies of the organization, which are highly influenced by their belonging to various social identity groups (Goswami and Goswami, 2018). The social identity of an individual indicates who they are with regards to the various groups they belong to and is usually defined by physical, social, and mental characteristics, such as their gender, race/ethnicity, sexual orientation, socio-economic status, and (dis)abilities (Northwestern, 2021). Employees all come with various social and personal identities, as a result of diversity, therefore highlighting the significance of an inclusive work environment, in consideration of the fact that this influences employee engagement (Du et al, 2020).

The term ‘Employee Engagement’ has been defined in various ways but the one that stood out during this research was that it is simply the degree where employees are conscientious and engrossed in their performance, as well as the affirmative feelings and motivation they have towards their jobs in the roles they are in, in their organization (Saks, 2019). The efforts that organizations make in understanding the personal interests of their employees, in addition to the differences in social and personal identities, create a connection between the organization and the employees, which impacts employee engagement (Pleasant, 2017). Furthermore, hiring employees from various backgrounds is simply inadequate, as in order to drive results in organizational performance, innovation, competitiveness, and profitability, it is inevitable to focus on creating an inclusive work environment that gains employee trust and involvement, as a result of an engaged workforce (Riffkin and Harter, 2016). 

There is a significant need for the existence of effective leadership as in order to achieve an inclusive and highly engaged workforce, there must be a strong presence of clear communication between the organization and the employees, to fully achieve the organizational objectives towards diversity, inclusivity, and engagement (Leonard, 2012). As diversity thrives in organizations, this emphasizes the value of fully committing to building a sense of belonging among the employees, which results in higher productivity and retention, due to an engaged workplace environment (Huang, 2020).

In the current climate where leaders are viewed as the enablers of change, creating an inclusive environment where there is a presence of belonging and cohesion, where employees are valued and recognized for their uniqueness, greatly results in increased engagement, performance, and collaboration (Dillon and Bourke, 2016). Organizational inclusion not only results in an engaged workforce but greatly attracts diverse talents that possess the knowledge, skills, and experience that will foster creativity and innovation, which places the company at a competitive advantage (Tapia, 2021).

Psychological Contract

The quality of a psychological contract is greatly influenced by employee behavior, as the mentioned contract is based on the employee’s view of fairness and trust, therefore, when their contributions to the organization are recognized and rewarded, it results in positive outcomes, such as higher level of engagement and commitment (CIPD, 2021). The recognition of individual differences is beneficial for developing a psychological contract, as this highlights the employee’s value and role in the organization, therefore avoiding unrealistic expectations, which puts an emphasis on the importance of transparency and communication (Tucker, 2017).

Psychological contract is reflective of the employees’ feelings and cognition of the organization, therefore putting an emphasis on the exchange theories, mainly equity and social exchange theories (Du and Liu, 2020). Adam’s equity theory focuses on striking a balance between the employee’s input and output within the workplace, as finding that balance leads to employee satisfaction, which will impact motivation, engagement, and productivity (The Economic Times, 2021). Whilst social exchange theory is the relationship formed based on a cost-benefit analysis, which means that when employees are rewarded or recognized for their work, it becomes beneficial for the organizations as this will increase employee engagement, which will impact productivity (Chernyak-Hai, and Rabenu, 2018).

However, when an employee perceives that the employer has failed to attain its obligations, results in a breach of the psychological contract, which can cause disengagement and a decreased level of performance (Jones, 2017). Avoiding a breach in the psychological contract is dependent on the social exchange theory, as this portrays the importance of a psychological contract in the workplace, in order to achieve and sustain a high level of engagement (Soares and Mosquera, 2019).

It is evident that diversity in the workplace is of great importance, however, without inclusion, the full potential of a diverse workforce simply cannot be embraced, as there is an increasing demand for the development of inclusion in the workplace, which results in an inclusive environment where employees feel a sense of belonging.

However, in order to reach success, a focus on creating an inclusive environment is critical simply due to reason being, that in order to attract and retain talents, organizations must cultivate a culture, where people feel protected and accepted regardless of their background, which has a positive psychological impact on the employee, resulting in an increased level of employee engagement.

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