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Diversity versus inclusion: Why the difference matters

November 18, 2021 - 16 min read


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What is diversity?

What is inclusion?

Key differences between diversity and inclusion

4 benefits of diversity and inclusion

5 activities to build diversity and inclusion 

How do you create an inclusive workplace?

The terms “diversity and inclusion” are so often used together that it’s easy to think that they mean the same thing. However, diversity and inclusion are distinct concepts, and they are not interchangeable. It’s possible for an environment to be diverse, but not inclusive. Conversely, there are many workplaces that are inclusive, but not diverse — which can undermine company culture. This article explores the meaning of diversity vs. inclusion, their main differences and benefits, and ways to create an inclusive environment at work.

What is diversity?

In order to understand the difference between diversity and inclusion, we have to look at the meaning of each term. 

Diversity is the characteristics, experiences, and other distinctions that make one person different from another. Most people understand diversity on a surface-level — that is, characteristics that are easy to see. Diversity does mean people of different races, ethnicities, gender identities, and sexual orientations, but it’s more than that. The term represents a broad range of experiences, including socioeconomic background, upbringing, religion, marital status, education, sexual orientation, neurodiversity, disability, and life experience.

A diverse workplace is one that hires and promotes people from a variety of backgrounds. These distinct perspectives enrich the pool of talent at work. Diverse companies tend to be considered innovators in their field, enjoying higher retention and increased revenue.


What is inclusion?

Inclusion is the “secret sauce” that makes a diverse workplace more innovative, profitable, and engaging. It means creating an environment where people — regardless of surface or hidden level differences — feel welcome and valued. That means no individual is denied access to education, resources, opportunities, or any other treatment based on the qualities that make them unique, whether intentionally or inadvertently.

Building an inclusive environment requires thoughtfulness and intention. Technically speaking, companies aren’t required to make their workplaces inclusive. But every organization benefits from doing so. Inclusion is vital to both the workplace and to society. It’s much more than just hiring people that look different. It’s about rewriting implicit bias and challenging the idea that different means inferior. 


Key differences between diversity and inclusion

How can an environment be diverse but not inclusive? Companies looking to “check the diversity box” might fall into the trap of recruiting individuals based on surface characteristics. If a person feels “othered” or “tokenized” at their work environment, they’re unlikely to contribute to their fullest potential — or stick around for very long.

Tokenism is the practice of including one member of a minority group in a majority. For example, that may mean having one Black employee in a predominantly white group, or one woman on an all-male team. Not all instances of having one member of an underrepresented group present are examples of tokenism. But, as clinical psychologist Jo Eckler tells Health, certain things may “give it away.” A female employee constantly being asked to speak about being a woman in their field is a notable — and common — example.

Tokenism doesn’t help diversity, and it’s detrimental to inclusivity. It also has a profound negative impact on mental health. Individuals who feel tokenized often suffer from extreme pressure and anxiety at work. Eckler explains, “This visibility can come with scrutiny and pressure to represent an entire group.” They may be asked to speak up on issues of diversity or deal with insensitive comments from coworkers. This can cause (or exacerbate) impostor syndrome, negatively impact self-esteem, and reduce a sense of belonging.

Most organizations don’t seek to leave others out or make them feel unwelcome. As social justice issues become more prevalent, companies are under pressure to “quickly ramp up diversity.” However, building an inclusive environment can’t be done overnight. Counterfeiting diversity with shortcuts can actually harm company culture over time. As Sandra Robinson and Kira Schabram explain in Harvard Business Review, even and unintentional snub or careless comment “signals that we are socially worthless and a bad fit for that very community that we depend on.”

4 benefits of diversity and inclusion

When diversity and inclusion are in sync, companies, individuals, and teams benefit in several important ways. In order for that to occur, diversity and inclusion must be key organizational values. Here are 4 benefits of inclusion and diversity for people and workplaces: 

1. Increases profitability

Companies that are leaders in diversity and inclusion are more profitable and experience higher revenue. A 2015 McKinsey report found that the most culturally diverse organizations were more 35% more likely to exceed median earnings in their industry. Companies with strong gender diversity were 15% more likely to be exceptionally profitable. 

The same report also found that when companies in the United States increase racial and ethnic diversity on senior boards, they see a 0.8% increase in earnings before interest and tax (EBIT). Companies based in the United Kingdom realize an impressive uptick of around 3.5%.

2. Improves company culture and image

When companies have a largely homogeneous environment, they tend to only feel comfortable for employees that fit in. That can lead to them being “inclusive” for one group and hostile for diverse employees.

Companies that welcome, hire, and promote employees from different backgrounds  have a more collaborative, inclusive, and diverse workplace. This positively impact on how the company is perceived by employees, leaders, investors, and the general public. 

Additionally, people tend to feel more rooted in their prejudices when they are in the cultural majority. That leaves people in the minority little choice but to assimilate with the dominant culture. This kind of pressure increases anxiety, groupthink, and has a detrimental impact on innovation and collaboration. 

3. Better performance

When people feel safe and welcome at work, they are far more open and engaged. They’re better able to take risks and ask for help, which has a positive impact on collaboration, productivity, and problem solving.

One of the key benefits of workforce diversity is diversity of thought. People learn more, become better, more agile thinkers, and relate to one another differently on diverse teams. BetterUp found that teams with a diverse group of leaders had 90% higher team innovation, 50% higher team performance, and 140% higher team engagement.

4. Attracts and retains talent 

People enjoy working in environments where they are encouraged to bring their whole selves to work. That vulnerability and authenticity makes us more resilient, adaptable, and driven. On the other hand, people who feel that they have to hide who they are at work are at higher risk for depression and burnout.

Workplaces with a strong culture of belonging and inclusion are attractive to jobseekers, who increasingly prioritize work culture as a deciding factor in choosing a new job. When people feel welcome at work, they perform better and stay put longer. BetterUp found that Members with the highest levels of belonging are 34% more likely to stay at their jobs than those with low levels of belonging. 


5 activities to build diversity and inclusion 

Many of us were taught that it’s “not polite” to talk about our differences with each other, and even fewer of us have had models of productive friction. Contrary to well-meaning advice, however, it’s not helping anyone to stay quiet about inclusion. Fear and silence enable covert racism and implicit bias. To build trust, it’s important to speak up.

As a leader, you can create space for courageous conversations on sensitive topics at work. Here are some ideas for activities you can do with your team:

1. Diversify your calendar

Take a look at your company calendar. Which holidays are you celebrating or taking note of? It may not be possible to offer a day off for every single holiday, but it’s important to at least acknowledge and reflect them on the calendar. Consider offering additional vacation days or unlimited PTO so that people can honor days that are personally meaningful to them.

2. Educate people about diversity

Prioritizing diversity in the workplace has to go deeper than surface-level. In order for your leaders and team to embrace inclusion as a priority, you need to make it a consistent part of workplace conversation. Keep diversity front of mind with education and training. Offer a budget for employees to delve into different concepts that interest them in this area. 

3. Review your content

If your company has been established for some time, you might have content that includes biased or outdated language. Get a team together and educate them on terms that may be offensive or exclusionary, like “differently abled.” You can put this into action by reviewing your existing literature and content for anything that doesn’t represent the direction your company is moving in.

4. Create spaces that celebrate diversity

Connecting with other employees helps to build a culture of belonging at work. One way to foster connection is by creating employee resource groups, or ERGs. These peer-led groups provide safe spaces for team members to connect and share experiences. 

Diversity extends beyond race, so be sure that both your physical and emotional spaces are inclusive. Consider making workplace bathrooms gender-neutral. Avoid arbitrary gender separation or terms like “craftsman” that are inherently binary. Take care not to use slang terms that might be offensive, like “lame” or “crazy.”

5. Encourage people to bring their whole self to work

Getting to know people is a powerful antidote to unconscious bias. Referring to someone by their race, gender, or other surface-level characteristics is generally offensive — not to mention fertile breeding ground for stereotypes. 

Encourage people to showcase who they are. Ask them about their favorite foods, weekend plans, or most fun vacation. Get to know their pets, their coffee orders, or their favorite songs. We all have things that make us unique, but inclusion is about celebrating what brings us together. Prejudice thrives when we don’t look past our differences.

How do you create an inclusive workplace?

As mentioned, an inclusive workplace doesn’t happen overnight. It requires commitment and bravery. If you’re a member of an underrepresented group, you know that the things that make people feel unwelcome are often subtle and covert. In order to change them, people have to be willing to do the work on every level.

Here are some ways to create a more inclusive culture in the workplace:

1. Widen your talent pool

At some point, your recruiting team will need to turn their attention to hiring and recruiting diverse talent. Look at talent from a variety of backgrounds, and emphasize your organization's commitment to inclusive hiring. Avoid barriers to entry, like advanced degrees or expensive certifications, in the hiring process. Hire diverse candidates for both leadership and entry level positions.

2. Appoint a diversity and inclusion officer

Your diversity efforts won’t succeed without the support of your leadership team. For company culture to transform, growth has to be modeled, emphasized, and encouraged. That means having both allies and people from underrepresented backgrounds in the C-suite. Leaders who share their own experiences set the pace for their organizations in more ways than one. 

Hiring a diversity and inclusion officer can help accelerate your DEIB strategy. It can help both the organization and individuals understand what it means to create a welcoming and diverse culture.

3. Use inclusive language

Consider reviewing the language your organization uses — both internally and externally. 

Many terms that were commonplace are now being recognized as insensitive in daily usage. Be intentional about using terms that reflect your commitment to inclusion.

This is especially important when it comes to gender, race, and disability. Use “people first” language and never refer to someone by race or disability status. If someone tells you what their pronouns are, use them as appropriate. Generally speaking, it is always acceptable to refer to someone by name or with the indeterminate pronoun “they.” 

4. Provide resources

Learn about diversity, equity, inclusion, and belonging — both inside and outside of the workplace. Share the benefits of diversity with your team. Offer implicit bias training and talk about stereotypes at work. 

Working with a coach can help you confront biases, challenge assumptions, and continue conversations about deep diversity. Coaching can also facilitate conversations geared towards changing organizational behavior.

Bottom line

Rita Mitjans, chief diversity and social responsibility officer at ADP, describes the difference between diversity and inclusion like this:

Diversity is the "what"; inclusion is the "how." Diversity focuses on the makeup of your workforce — demographics such as gender, race/ethnicity, age, sexual orientation, veteran status, just to name a few, and inclusion is a measure of culture that enables diversity to thrive.

Understanding the distinction of diversity vs. inclusion isn’t about picking one area to focus on over another. Instead, it helps organizations pinpoint where their DEI strategy might be failing. For a company to bridge the gap from diversity to belonging, it has to welcome, honor, and value all kinds of differences. Being vulnerable and authentic as you do this work will encourage your employees to do the same.


Published November 18, 2021

Allaya Cooks-Campbell

BetterUp Staff Writer

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