Diversity Management: definition and importance

Date: 04/10/2022| Category: Best Practices Glossary|

The concept of Diversity Management is not new in the HR environment, but certainly the growing attention to certain topics and the increased awareness also outside the world of HR has now made all professionals aware of this type of topic.

In this article we will elaborate on the concept of Diversity Management and some of its main aspects and explain why it is so important for organisations nowadays to pay attention to inclusiveness.

Diversity Management: definition

The question “What is Diversity Management?” can be answered with this definition:

The practice of addressing and supporting multiple lifestyles and personal characteristics within a defined group. Management activities include educating the group and providing support for acceptance and respect for various ethnic, cultural, social, geographical, economic and political backgrounds.

Diversity Management thus refers to actions taken by companies to promote greater and better inclusion of employees from different backgrounds within the organisational structure through specific policies and programmes.

The importance of Diversity Management: some figures

The younger generation pays much attention to issues of inclusiveness and equal opportunities. This is why authoritative bodies have started to focus on studies and statistics that highlight the need for greater inclusiveness in the world of work.

The Global Diversity Report published by Oxford Economics showed that in the United States, most managerial positions are held by Caucasian men: of the approximately 1.5 million Chief Executives in the US, only a quarter are women and only a tenth are ethnic minorities.

Of course, this reality is not only confined to organisations across the Atlantic, but is also a very present issue in Europe: the European Women on Boards Gender Diversity Index analysed companies on STOXX Europe, a stock index consisting of 600 large, medium and small capitalisation companies in 17 countries of the European region. This showed that out of 600 only 28 companies have a female CEO and only 7% of board chairmen are women.

Going even more specific, a study provided by the German Council of Experts on Integration and Migration states that in Germany, people with German names are more likely to be called for job interviews than people with Turkish-sounding names.

Diversity Management: benefits and objectives

According to a study conducted by McKinsey on the work performance of inclusive teams, it was found that:

  • Inclusive teams perform 35% better than non-inclusive teams
  • Teams composed of 50% women and 50% men generate on average 41% more profit
  • Diverse teams have also proven to be more creative

The objective of Diversity Management is to make the best use of the skilled workforce by integrating backgrounds, cultures and competences into heterogeneous, high-performing teams. This enables companies to pursue different objectives:

  • Decrease the turnover rate: the phenomenon of ‘great resignation’ has made it even more evident how important it is to be able to retain resources. A more inclusive environment contributes to employee satisfaction.
  • Conquering international markets: if companies have not yet been able to acquire an adequate position in the international market, intercultural problems may be one of the causes. Employees from different ethnic backgrounds and with different skills can help to better understand the needs of international customers.
  • Provide skilled labour: the shortage of skilled workers is a well-known issue for companies and will become even more visible in the future due to demographic shifts. Companies will have a competitive advantage if they make sure they hire the best employees today.

Diversity Management Strategies to put in practice

There are several best practices and cautions that need to be taken within all levels of the organisation in order for the company to be able to speak of true Diversity Management:

  • Management buy-in: company policy and culture are closely linked to senior management and depend precisely on the management’s vision. This is why it is essential that the concept of Diversity Management is shared and promoted first and foremost by the management.
  • New ways of recruitment: not only scouting at graduate schools, masters or competitors, but actively looking for talent coming from different contexts is certainly an element that favours the structure of a heterogeneous team.
  • Fostering an open discussion and dialogue on diversity: structured mentoring, networking and socialising helps to increase employee engagement and performance levels. Successful staff members can demonstrate how they have found success within the organisation and mentor new staff members.
  • Setting inclusiveness as a corporate goal: an organisation that values workforce diversity should take pride in promoting its ideals. Both in terms of communication and concrete activities, the company can be a spokesperson for these ideals and support its employees, as well as taking the lead in the field with events, activities and promotions.
  • Clear, structured and up-to-date diversity policies and procedures: having clear diversity policies available to all employees is an extremely effective way of communicating the organisation’s stance on diversity. Documents outlining policies and procedures should be part of the employee handbook and reviewed with each new hire to ensure they are inclusive.


For companies that want to work with the best talents of the new generations and be in line with the expectations of today’s world of work, it is crucial to commit to making inclusivity an integral part of the company values and to promote it at all levels, starting with management.

The benefits for a company that supports Diversity Management are many, and not only in terms of brand reputation but also in terms of quality and quantity of production. Certainly, starting to promote new ways of recruiting and choosing candidates can be an excellent starting point for all organisations that want to concretely begin being inclusive.

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