Workforce diversity in 2025: An employer’s guide
Discover how to create an inclusive environment where all employees can feel they belong and contribute to sustainable success.
An organisation’s strength lies in its people, which is why employers are always looking to cultivate a more productive environment. One effective strategy for achieving this is by fostering a diverse workplace, with research indicating that organisations in the top quartile for diversity are 36% more likely to achieve above-average profitability.
However, despite progress over the past decade, significant barriers to true workforce diversity still exist. For example, 2024 McKinsey report found women from different ethnic minority backgrounds are still unrepresented at higher levels of the workplace, with their gender and race viewed as obstacles.
In this guide, we look to offer employers a practical resource to understand and harness the benefits of workforce diversity. Let’s get started.
What is workforce diversity
At the most basic level, workforce diversity means bringing together employees from a wide range of backgrounds in the workplace. Beyond that, diversity refers to fostering a culture where every employee’s unique background and experience is not just acknowledged but celebrated.
A successful approach to workforce diversity should focus on creating an inclusive environment where people feel they belong and are empowered to contribute. This goes beyond simply having a diverse team—it’s about providing equal opportunities and creating an atmosphere where each employee feels valued and respected.
Types of workforce diversity
Workforce diversity encompasses a wide range of characteristics and experiences, reflecting the varied backgrounds of employees. The Equality Act 2010 outlines nine protected characteristics that contribute to workforce diversity: age, gender, disability, reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation.
However, diversity extends beyond these protected characteristics. Socioeconomic and educational backgrounds, although not officially protected by the Act, play a crucial role in workforce diversity. For example, Totaljobs research reveals that almost half (49%) of people who received Free School Meals believe their background limits their career prospects.
It’s also important to consider intersectionality—the way various identities and experiences overlap and influence each other. This complexity shapes how individuals are perceived and treated in the workplace.
In summary, when discussing workplace diversity, employers should consider:
- Race or ethnicity: Represents racial or geographic origins and shared cultural identity, including traditions, religion, and language.
- Religious, philosophical, or political beliefs: Includes various religious or philosophical views, provided they do not infringe on others’ rights.
- Age: Considers generational groups like Gen Z, Millennials, and Baby Boomers, each with distinct characteristics.
- Gender: Addresses gender identity and expression, including the differing experiences of cisgender and transgender individuals.
- Sexual orientation: Encompasses a person’s romantic or sexual preferences, with an emphasis on LGBTQ+ inclusivity.
- Physical abilities: Recognises disabilities, both visible and invisible, requiring appropriate workplace accommodations.
- Neurodiversity: Describes a range of cognitive and neurological differences, including autism, dyslexia, dyspraxia, and ADHD.
- Mental health and wellbeing: Reflects the impact of mental health issues, with a focus on the intersection with other demographic characteristics.
- Socioeconomic status: Involves factors like occupation, wealth, and education, affecting workforce diversity.
Benefits of diversity in the workforce
Beyond the obvious moral case for embracing diversity in the workplace, there’s also a compelling business case, with a diverse workforce providing significant advantages for employers.
Let’s take a look at the specifics.
A wider talent pool
Embracing workforce diversity opens the door to a broader and more diverse talent pool, allowing organisations to attract a more varied range of candidates. This broader reach increases the likelihood of finding and benefiting from unique:
- Skills
- Experiences
- Perspectives
Committing to diversity not only improves the quality of talent an employer can access but also contributes to a more inclusive and equitable workplace. This can have the added benefit of helping organisations remain competitive in a rapidly changing world.
Improved employee engagement and retention
A diverse workplace plays a significant role in fostering higher levels of employee engagement and retention.
When employees feel included and valued for their unique backgrounds and perspectives, they are more likely to develop a sense of belonging and commitment to the organisation which can be translated into:
- Higher morale
- Increased motivation
- Stronger connection to the organisation’s goals
An inclusive environment with internal diversity also encourages open communication and collaboration, allowing employees to bring their full selves to work without fear of discrimination or prejudice.
As a result, they are more likely to stay with the organisation long-term, reducing turnover and the costs associated with recruiting and training new employees.
Better understanding of customers and markets
A diverse workforce can help provide employers with a more nuanced understanding of their customers and markets, with Harvard Business Review reporting that diverse teams are more likely to re-examine facts and remain objective.
When employees come from a wider range of backgrounds, they are more likely to bring unique insights and experiences that reflect broader society, helping organisations better understand the needs, preferences, and behaviours of their customer base.
By having a workforce that mirrors the demographics of their target markets, organisations are also better positioned to create products and services that resonate with a wider audience. This not only improves customer satisfaction but also builds stronger relationships with clients and consumers.
Increased innovation and productivity
Diversity in the workplace is a powerful driver of innovation and productivity.
When employees with different backgrounds, experiences, and perspectives come together, they bring a wider range of ideas and problem-solving approaches. This variety can lead to more creative solutions and breakthroughs, as team members challenge conventional thinking and explore new possibilities.
In a diverse environment, there’s a greater likelihood of cross-pollination of ideas, resulting in more dynamic discussions and a culture of continuous improvement. This can contribute to higher levels of engagement, as employees feel empowered to voice their unique insights. As a result, teams become more:
- Agile
- Adaptable
- Willing to embrace change
Moreover, diverse teams tend to be more collaborative, promoting a stronger sense of teamwork and shared responsibility. This, in turn, can lead to improved productivity, as employees work more effectively towards common goals.
Higher profits
By embracing diversity, employers can not only create a more inclusive culture but also set the stage for higher profits and sustainable growth. This is evidenced by findings from McKinsey that show companies with more than 30% women executives are more likely to outperform those where this ranges from 10 to 30%, demonstrating how diversity isn’t just a moral imperative, but a strategic advantage.
One reason for this is that diverse teams bring a mix of skills, experiences, and viewpoints which often result in better decision-making. Furthermore, these combinations can drive creativity and allow organisations to adapt more readily to changing market conditions.
Challenges in building a diverse workforce
Creating a diverse workforce that fosters equity and inclusion comes with its share of challenges. Let’s take a quick look at two examples and how you can look to navigate them:
- Educating staff and rethinking ways of working: A diverse workforce may require new approaches to everyday tasks. Staff need to understand and respect the varied backgrounds and experiences of their colleagues. Training and education are therefore important to raise awareness of cultural events, preferred pronouns, disability accommodations, and foster a more inclusive workplace.
- Risk of conflict and discrimination: As diversity increases, there’s a risk of uncovering discriminatory behaviour or prejudice. It’s vital to have a zero-tolerance policy towards offensive actions and clear HR protocols to handle discrimination. Unconscious bias training and cultural awareness can help, but the organisation must ensure confidential channels are available for employees to report any incidents safely.
Strategies to increase workforce diversity
Having examined the benefits of a diverse workforce and the associated challenges, it’s time to explore strategies you can implement to create a more inclusive workplace.
1. Listen to employees to understand the root challenges
The first step of promoting diversity and inclusivity is to listen to the voices of your employees from underrepresented groups to better identify the root causes of diversity issues. You can gather these insights by:
- Holding focus groups
- Conducting employee surveys
- Setting up anonymous feedback channels
Analysing this information can reveal common themes such as discrimination, microaggressions, or a lack of belonging.
Remember, inclusion in the workplace is not just about hearing complaints but understanding and addressing the deeper issues affecting workforce diversity.
2. Identify barriers at all stages of the employee experience
To foster diversity, employers need to examine the entire employee journey to identify potential barriers. This requires a collaborative effort among HR, recruiters, leadership, and line managers.
Key areas to focus on include:
- Reviewing your organisation’s website to ensure diversity is a visible priority
- Tracking demographic data from initial job applicants to final shortlists to detect any biases
- Writing inclusive job descriptions and job adverts so you are encouraging a diverse range of applicants to apply for roles
- Conducting exit interviews to understand why employees leave and identifying any patterns
By scrutinising these stages, you can pinpoint where barriers might be occurring and begin to take proactive steps to address them moving forward.
3. Develop tailored, scalable solutions for unique challenges
A one-size-fits-all approach seldom works when it comes to building a diverse and inclusive workforce. Instead, employers should be looking to develop tailored solutions that can be scaled across an organisation.
One place to start is by reviewing key touchpoints like job adverts to ensure they are free from biased language. For example, using clear, gender-neutral language can help to attract a more diverse range of candidates.
4. Champion accountability and secure leadership buy-in
Getting buy-in from senior leadership is crucial to driving meaningful change in any organisation. Without it, it’s hard to maintain momentum for vital diversity and inclusion initiatives and build an organisation with employees from diverse backgrounds.
As a result, whenever possible senior leaders should be encouraged to take an active role, which can also help to build a culture of accountability at all levels.
This could include sponsoring diversity programmes or hosting ‘open door’ sessions to discuss discrimination or systemic barriers.
5. Foster a company culture based on belonging and inclusion
While support from the C-suite is essential, the wider workforce also needs to embrace the values of belonging and inclusion. ‘Grassroots’ initiatives like employee-led networks or resource groups can foster a sense of ownership among employees and help to create a more inclusive workplace.
A culture focused on belonging and inclusion can then contribute to:
- A more positive work environment
- Stronger teamwork
- Improved collaboration
6. Set meaningful and measurable targets
To build a diverse workplace, organisations can set specific and measurable targets for diversity. This should include both numerical goals and qualitative feedback in order to get a complete picture.
Numerical targets can focus on increasing representation in certain departments, while qualitative measures, like employee feedback and case studies, provide deeper insights into staff experiences.
7. Collect data to inform decision-making
Data collection is key to understanding and measuring progress against an organisation’s diversity goals. Although it’s not legally required, collecting demographic data from job applicants and your workforce can help you identify trends and make well-informed decisions.
However, it’s vital that employers are transparent about why they are collecting this data and work to ensure that they have consent from both candidates and employees. Failure to do so could result in a breakdown of trust and buy-in.
Remember, monitoring diversity within your talent pools and workforce can help you set ambitious yet achievable targets, leading to more effective diversity initiatives.
8. Monitor progress and adjust strategies as needed
After setting diversity goals, employers should ensure that they can regularly monitor progress and then adjust strategies as required.
Flexibility is crucial, as a one-size-fits-all approach may not work across all areas of your organisation. Leadership and HR teams should foster a culture of open communication, sharing updates and encouraging feedback.
Encouraging ongoing dialogue and being open to course correction helps ensure diversity initiatives stay relevant and effective, leading to a more inclusive and adaptive workplace.