Diversity vs. Inclusion (Hint: Your Organization Needs Both)

Is it easy to create a company culture that’s inclusive of people from all backgrounds, identities, beliefs and experiences? Diversity and inclusion are things many businesses like to think they can achieve and maintain across their entire organization––from the warehouse to the C-suite. In many instances, a business might use the two terms interchangeably. However, the two words don’t mean the same thing. Combined, they work together to provide powerful benefits that help organizations, no matter their industry or area of expertise, outpace their competitors in several key areas.

What is diversity?

Before we dive into how and why businesses should prioritize and combine diversity and inclusion, let’s take a look at the meaning of each term.

At CoachHub, we use the Society For Human Resource Management (SHRM) definition of diversity, which describes diversity as “the collective mixture of differences and similarities that includes, for example, individual and organizational characteristics, values, beliefs, experiences, backgrounds, preferences and behaviors.” Many companies tend to focus on visible diversity traits, things such as: 

• Size
• Height
• Body type
• Gender
• Skin color
• Age
• Behaviors
• Physical abilities

These are surface-level characteristics. Diversity does include traits that are easy to see. However, it also refers to the characteristics beneath the surface. These invisible diversity traits can include individual experiences and beliefs, such as:

• Socio-economic, marital and/or parental status
• Sexual orientation
• Religion, beliefs and/or values
• Military experience
• Level in the organization
• Geographic location
• Culture
• Ethnicity
• Native-born vs. non-native
• Personality, communication and/or thinking styles
• Education
• Physical abilities

It’s easy for organizations to fall into a false sense of diversity when they focus on the surface diversity traits or on diversity in hiring to meet quotas around gender, skin color, age, etc. However, by focusing on visible diversity, the business runs into problems––problems that we’ll go into in the section on how diversity without inclusion doesn’t work.

What is inclusion?

Is inclusion similar to diversity? Not really. While the two can go hand in hand, it’s possible to have a diverse workforce that isn’t inclusive and vice versa. Diversity refers to hiring and promoting based on visible and invisible traits. Inclusion, on the other hand, refers to how an organization integrates an individual into a group––how leadership and colleagues include employees within the business. Inclusiveness is an active choice and not about filling your business with people who have different characteristics. It involves treating everyone equally and in ways that allow them to participate in the organization and feel at home regardless of their differences––hidden or visible.

How diversity without inclusion impacts businesses

By uniting diversity and inclusion, an organization can achieve advances over those that don’t. But what can happen when a company confuses the two concepts and winds up practicing one but not the other? When businesses favor diversity over inclusion and/or hire based on superficial characteristics a detrimental phenomenon––tokenism––occurs.

Tokenism is the practice of diversity for the sake of appearing diverse and is not true inclusion. Tokenism practices, for example, involve including one woman, one person of color and one LGBTQAI+ person in a company, leadership team, department, or project. Look at most movies, television shows and advertisements to find obvious examples of the practice. Another aspect of tokenism occurs when an organization refers to an employee by their identity when the business does not refer to other employees by identity. For example, when a company introduces the chief financial officer as “our Black CFO, Steve Rogers,” or refers to their single Southeast Asian employee as “our Southeast Asian female account manager.” 

Tokenism doesn’t actually help make workplaces more diverse. Instead, the practice can create a toxic culture where any tokenized individuals feel isolated with nowhere to turn for support when microaggressions or overt aggression occurs. Furthermore, the stressors lead to increased anxiety, imposter syndrome and lower self-esteem.

What companies gain when diversity and inclusion are priorities

According to a Boston Consulting Group survey in the Harvard Business Review, companies who scored above average in multiple facets of diversity and inclusion increased their innovation revenue by as much as 12.9%. However, when the same research looked at diversity standards such as equal pay, management support for diversity, open communication, etc., less than 40% of companies practiced them. Furthermore, other organizations’ surveys discovered that 61% of employees feel negative about how inclusive their work cultures were. 

When organizations gain a true understanding of the differences between diversity and inclusion, they can achieve advantages in multiple areas.

• Improves company culture – In firms that hire, promote and create a welcoming culture for individuals from diverse backgrounds, experiences, beliefs, etc., there isn’t pressure to conform to a dominant “in group.” As a result, their employees feel psychologically safe and supported. They express opinions––even dissenting ones––and collaborate more. 

• Improves performance – Employees who work in more inclusive and diverse organizations are more engaged, feel comfortable asking for help and take risks. 

• Increases innovation – The diversity of thought that occurs in a diverse and inclusive company culture translates into increased innovation, particularly in companies where diversity and inclusion are high priorities.

• Increases profitability – As mentioned above, there is a direct correlation between diversity and inclusion and increases in innovation revenue. Other research from McKinsey & Company discovered that organizations that embrace diversity and inclusion exceeded median earnings over companies that did not.

• Improves ability to recruit and retain employees – Employees who feel a strong sense of belonging experienced increased job satisfaction and are more likely to remain in the same firm longer. These same companies have a much easier time recruiting new talent.

How coaching helps

The benefits of fostering and maintaining diversity and inclusion in an organization are multidimensional. But what can companies do to develop and improve their efforts? According to Svenja Haus, our head of coaching, adapting a proactive and strategic approach that includes coaching helps empower workers. With digital coaching and other activities teams welcome diversity and foster inclusion, changes that benefit everyone and help drive a firm’s success.