An inclusive culture is crucial to a healthy, happy workforce. Countless workers walk out the door solely because they don’t feel seen, heard, or accepted.
One report found that 66% of employees would quit if they felt unappreciated at work. This number jumps to 76% with millennial workers, who encompass more than a third of the workforce.[1,2]
This is made even more pressing by the fact that inclusivity is a rising movement among companies. This means that if employees don’t feel accepted at one company, they know there are many other options.
Building a culture of inclusion is an employee retention strategy that retains top talent, improves financial performance, and encourages teamwork. It also stirs up innovation and jumpstarts motivation.
This guide discusses the common link between an inclusive culture and employee retention, as well as providing actionable best practices to encourage inclusivity in your company.
An inclusive culture is a work environment that values and appreciates all types of employees, regardless of their backgrounds and personal lives. This type of culture nurtures diversity and psychological safety, encouraging employee satisfaction and retention.
It’s important to note that an inclusive company culture welcomes and values different people; it doesn’t ignore differences in an attempt to create an artificial harmony, like the infamous US military policy “Don’t Ask, Don’t Tell.”
An inclusive company culture is crucial for a healthy, thriving workplace, and it’s rapidly becoming a modern expectation.
This makes it a great way to address modern talent retention trends.
For example, cultural inclusivity can help you boost employee wellbeing across your teams.
Cultural diversity and inclusion are only getting more important year-by-year. The global DE&I market was estimated at $9.4bn in 2022 and is expected to reach $24.4bn by 2030.
Why? Inclusion is drawing attention due to many factors:
The newest work generation is the most diverse yet, which makes inclusion a priority when hiring Gen Z 
Global social issue protests
When companies become more inclusive, they begin to set a standard that employees expect
It has a ripple effect that affects companies, individuals, and society
These points are making inclusion a crucial trend to address.
Beyond these factors, cultural inclusivity also directly impacts organizations that foster it. We’ll dive deeper into the research later on, but first, let’s take a quick look at why inclusivity is important to employers:
Increases job satisfaction and engagement: Employees who feel seen, heard, and accepted are happier with their work and more motivated to come to work.
Boosts employee loyalty: Cultural inclusion in the workplace makes employees respect the company more and reduces your overall employee turnover rate. It also helps people meaningfully bond with colleagues.
Generate more ideas and improve problem-solving: A culture of inclusion not only increases diversity, which naturally boosts creativity, but it also makes people more willing to share their ideas because they feel safe and accepted.
Better financial outcomes: The innovation gained from an inclusive culture highly benefits a company’s performance.
Creating an inclusive culture at work makes your company stronger and more successful. And because it helps each employee feel seen and heard, it holds great importance to your workforce.
An inclusive company culture creates a sense of belonging that workers need to feel connected and committed to their company. It gives people motivation to go to work and do their best, improving the entire employee experience.
It also helps improve mental health. In an exclusive culture, employees have to hide their authentic selves, which causes immense stress and anxiety. For more insights, read our article on how to improve mental health in the workplace.
When you tell your entire workforce that they’re accepted and valued, good things follow.
Here are the top benefits of creating an inclusive workplace, including increasing retention, boosting financial performance, and reducing burnout.
Employees who feel welcomed for their true selves are more likely to stay with your company. An inclusive culture is a wonderful thing to come by, and people aren’t likely to toss it away.
An inclusive workplace culture makes employees 5.4 times more likely to want to stay with their employer for a long time and 9.8 times more likely to look forward to working.
This means an inclusive workplace doesn’t just improve your employee retention rate, it also reduces absenteeism and quiet quitting.
Quiet quitting, the phenomenon where employees only do the bare minimum, is often caused by feeling undervalued and harassed.
Employees don’t feel the need to avoid work when they have a positive, inclusive culture telling them that they’re valuable and respected.
When employees feel included, it leads to more comfortable and confident collaboration between diverse team members. It’s hard to give your all to your team and build proper working relationships when you feel excluded by your organization.
This is especially the case if some team members are accepted, and others aren’t – this can directly contribute to feelings of resentment.
But building an inclusive culture has the opposite effect. An increase in feelings of inclusion has been found to:
Increase team performance by 17%
Increase decision-making quality by 20%
Boost collaboration by 29%
When employees know they’re all on equal footing, it enables them to truly work as a team.
Inclusion boosts diversity, and it isn’t a new idea that diversity increases innovation. It’s one of the most commonly known benefits of diversity.
According to Forbes, a workforce with diverse backgrounds anticipates that there are alternative viewpoints and solutions to every issue and starts to broaden their perspectives to accommodate.
Plus, having a wide range of perspectives and opinions from different backgrounds enables you to tap into creative ideas and new ways to solve problems.
However, you can’t unlock the values of diversity without an inclusive culture.
Even with a wide range of diverse employees, an inclusive culture is essential to see their innovation thrive. Otherwise, your employees don’t feel motivated, supported, or included enough to use these skills.
Diversity isn’t a one-and-done deal. Active work is required to foster constructive innovation and teamwork.
When employees feel that they are seen, heard, and accepted, it boosts mental health.
There are three main ways it helps mental health:
Employees who feel included naturally feel more relaxed and accepted
Employees feel like they’re allowed to be themselves and stop “masking”
Employees who feel that they are seen and heard are genuinely being listened to, which means they don’t just shoulder toxic behavior and unrealistic workloads – they talk to management and improve their situations
This feeling of inclusion helps give people strong motivation to do their work, increasing employee engagement and decreasing the chances of burnout.
One study found that millennials are 83% more engaged when working in an inclusive company.
What happens when employees are collaborative, innovative, and engaged? They perform their jobs better and improve business outcomes.
Organizations with inclusive cultures are:
Two times as likely to meet or exceed financial targets
Three times as likely to be high-performing
Eight times as likely to achieve better business outcomes
Inclusive companies naturally come up with more innovative ideas and solutions that help their business thrive. This helps organizations stay financially competitive.
Plus, you can add increased retention to this argument because it directly impacts finances. Replacing an employee is expensive, and keeping one longer helps your bottom line.
Our tactics below cover seven actionable ways you can encourage inclusivity and acceptance in your organization, such as promoting your company as a safe space and adopting inclusive hiring practices.
Let’s get to work building an inclusive culture.
1. Make your workplace a safe place
Take steps to ensure people feel safe and accepted at work, such as providing gender-neutral bathrooms for trans people
2. Recognize and value employees for their talents
Focus on employee skills rather than recognizing people for their connections and tenure
3. Adopt inclusive hiring practices
Get retention started early by removing barriers to entry from the hiring process
4. Encourage compassionate leadership
Encourage management to lead from the top so people know where they stand
5. Promote diversity training opportunities
Initiate opportunities for your workforce to learn more about inclusivity and expand their perspectives
6. Mentor and coach employees
Provide employee coaching so marginalized groups have more opportunities to reach management positions
7. Value employee feedback and act on it
Ask employees their opinions on the workplace and what you could do to improve inclusivity
Promote your workplace as a safe, accepting place and take steps to make it happen. Both employees and candidates need to know your company is a safe place to work.
For instance, gender-neutral bathrooms tell trans employees that your company is a safe space.
Here are a few tips:
Ensure both in-person and virtual workspaces are inclusive, safe spaces
Foster an environment of psychological safety by letting employees know they can ask questions and make mistakes
Create employee resource groups
Take steps to address a negative environment and crack down on workplace bullying
Encourage employees to open up during one on one meetings by opening up yourself
Let’s go a little more deeply into this last point.
Opening up yourself encourages people to talk and share things with you, which is important for anyone who thinks they’re too different to be accepted.
For example, talking about your significant other by using terms like “spouse” or “partner” may encourage LGBTQ+ employees to talk about their partners.
For more tips on building a safe, positive atmosphere, read our article on workplace negativity.
Too often, a workplace recognizes employees based on their backgrounds and personal lives. This tells workers that they need to have a certain work history, hobbies, or education to be accepted.
This also happens with companies that value connections and tenure. This gathers unsavory comments like:
“Brian only got the promotion because he knows the manager’s brother.”
This isn’t a great corporate reputation to have – but there are ways to avoid it.
Promote the practice of recognizing and valuing employees for their skills, talents, and contributions. This tells employees that hard work and results are appreciated, which encourages employee engagement and effort.
It also shows that even brand-new hires are uplifted and valued, which benefits your talent acquisition strategy.
Any company can give employee recognition based on skills and accomplishments, but it’s common and natural in a skills-based environment.
This is because it starts from day one. When you hire employees using talent assessment tests, it starts the entire employee experience with an appreciation of their skill sets.
This is one of the reasons why skills-based hiring builds a culture of belonging.
Related to our last point – an inclusive culture starts before the employee’s first day, so inclusive hiring practices are a key point in building the right environment.
And yes, the hiring process definitely affects employee retention.
Recruitment practices impact retention because they not only help with hiring the right people for the job but also get new employees started right.
Here are a few inclusive hiring practices to try:
Gauge candidate skills using talent assessments
Conduct structured interviews to evaluate people fairly
Be careful with DE&I targets and the problems they can present, such as tokenism
Use inclusive language in job descriptions
One more tip for that last idea: Inclusive language should extend to daily workplace use, like using gender-neutral terms for employee benefits, such as “parental leave.” It’s also a good idea to include preferred pronouns in email signatures.
Remember, although inclusive hiring is crucial, inclusion doesn’t end at the hiring stage. It requires active work throughout an employee’s time with the company.
Inclusive recruitment is simply one of the many steps you can take to improve the entire employee experience.
Leadership helps shape an organization's reputation, culture, and employer branding, so it isn’t surprising to hear that it has a massive influence on your company’s inclusion.
The behavior of leadership can drive up to 70 percentage points of difference between the proportion of employees who feel included and those who don’t.
Your leaders convey your company’s overall attitude and perspective to your employees. So if they appreciate each worker, it lets people know that your company appreciates each worker.
Promote inclusive leadership by encouraging senior leaders and management to lead from the top. Showing that they value and support inclusivity with actions is much more impactful than simply saying it.
It’s also a good idea for leaders to communicate with their people – show their humanity, discuss important issues, and ensure employees don’t think their leaders are ignoring important events.
For more information on this topic, read our piece on leadership communication.
A truly inclusive culture is only possible when your entire organization understands what it is and commits to making it happen.
Set up diversity training opportunities for your workers. Much of the time, exclusionary acts only happen by accident.
For instance, a working parent’s colleagues might give them a hard time about never coming to lunch outings because they don’t understand how tight their schedule is with their children.
Here are a few examples of diversity training:
Encouraging positive group interactions
Actively reducing discrimination
Teaching people about different cultures and workstyles
Acknowledging and managing unconscious bias
Reducing microaggressions in the workplace
Conducting religious sensitivity training
Giving concrete examples of an inclusive culture so your employees understand what they’re aiming for
Providing disability awareness training
Diversity training not only encourages a more positive, inclusive work environment, it also shows employees that you care enough to set them up.
For more insights, read our blog on diversity training.
Marginalized groups are underrepresented in higher positions, which can harm inclusivity. Many people can get stuck in junior levels, unable to reach upper management and executive positions.
Mentoring nurtures workplace diversity by offering equal opportunities to diverse groups of people who could be lacking traditional qualifications. In fact, four-year degree requirements alone eliminate a large pool of diverse candidates.
Implementing employee training programs is an excellent way to foster inclusivity by leveling the playing field and increasing the number of diverse leaders and managers.
Further, this boosts the representation of diverse groups of people, which in turn increases motivation for other workers for internal mobility. For example, if you have women of color in executive positions, it helps empower and encourage other women of color.
There isn’t just one type of “inclusive” or “positive.” This means you can’t put generic programs in place and watch inclusivity flourish.
If you want to improve your organizational culture, you need to know where you stand currently and what your employees think of it. You also need to monitor it as you initiate inclusion efforts.
The easiest way to do this is to ask who your culture impacts the most: your workforce.
Request employee feedback, value it, and put it into action.
Here are a few ways to do it:
Send out anonymous surveys
Ask their opinions during one-on-one meetings
Hold dedicated feedback workshops
Have open commentary sessions during weekly huddles
Encourage upward feedback, the concept of employees speaking their minds about leaders and management
Remember, listening to your people and putting their suggestions into action is an inclusive practice, but it’s especially important to request feedback about inclusion specifically.
Ask diverse employees about the support they need, such as childcare for working parents or special accommodations for disabled employees. The needs of your workforce may vary widely from person to person.
Here are some excellent inclusive culture examples from three different companies.
They show that a culture of inclusion makes an organization an attractive place to work.
Why it’s successful
Makes new employees feel welcome and has a large number of diverse employees
Openly embraces that sometimes its employees won’t see eye to eye
Provides a variety of employee networks as an inclusive resource
Visa, a multinational payment services company, places great importance on diversity, inclusion, and equity.
In fact, 94% of people say you’re made to feel welcome when you join Visa.
This company has been recognized for its inclusion on many fronts, such as being included in the Bloomberg Gender-Equality Index and the Hispanic Association on Corporate Responsibility.
It also scored 100% on the Human Rights Campaign's Corporate Equality Index and Best Place to Work for LGBT Equality.
As for diverse demographics, 41.4% of the staff is female, and 53% are ethnic minorities. Overall, Visa has a diversity score of 9.8 out of 10.
Leidos, an engineering company, made inclusivity a core value in 2020.
This company wants to bring people with different customs, morals, and values into a “big tent” together, making room for diverse opinions and accepting that workers won’t see eye to eye 100% of the time.
Leidos fosters this inclusivity by offering employee resource groups that provide workers with support for onboarding, networking, and upskilling opportunities.
Equality in career growth is an essential part of cultural inclusion in the workplace.
This organization has been recognized by the Human Rights Campaign, The Best Employers for Veterans, and the Best Place to Work for Disability Inclusion.
Here are a few highlights from its 2021 DE&I report:
36% of its workforce is above 50 years old
31% has no college degree
20% are veterans
This also shows that it considers generational diversity, which is an often overlooked metric.
This focus on cultural inclusion in the workplace makes Leidos an excellent place to work. This company has an impressive retention rating of 73/100.
BlackRock, a multinational investment organization, is committed to maintaining an inclusive work culture.
This company focuses on inclusive hiring practices, such as checking for biased language, focusing on diverse candidates, and using a competency-based model for interviewing.
BlackRock supports its workforce by providing employee networks. These communities are built on intersectionality, allyship, and shared experiences.
Here are a few of its networks:
Asian, Mid-Eastern & allies network
Black professionals & allies network
Families & allies network
Out & allies network
SOMOS Latinx & allies network
Women's initiative & allies network
Michelle Gadsden-Williams, the global head of diversity, equity, and inclusion, has this to say about BlackRock’s dedication to inclusivity:
“BlackRock’s culture is central to our success and defines us as a firm. Part of that culture is creating an inclusive, equitable environment and ensuring everyone is seen, heard, valued, and respected.”
How does this culture shape its retention?
This organization’s employee turnover rate is 11.4%, which is excellent compared to the average employee turnover rate of 26.3% in the finance and insurance industry.[11,12]
There are no two ways around it – an inclusive culture is non-negotiable for a modern company.
Employees need to feel included and accepted at work to stay, and if they are, you're setting the groundwork for a fruitful future together.
This change doesn’t happen overnight. An inclusive company culture is the result of gradual efforts, so adopt a few of our best practices and work from there. Start small by sending out employee surveys and taking steps to make diverse employees feel safe and welcome.
For a deeper look at this topic, read our full guide on diversity in the workplace.
If you’re looking for a way to start appreciating and recognizing your employees for their skills, browse the talent assessments in our test library as the first step to adopting skills-based hiring.
Lipman, Victor. (April 15, 2017). "66% Of Employees Would Quit If They Feel Unappreciated". Forbes. Retrieved October 10, 2023. https://www.forbes.com/sites/victorlipman/2017/04/15/66-of-employees-would-quit-if-they-feel-unappreciated/
Fry, Richard. (April 11, 2018). "Millennials are the largest generation in the U.S. labor force". Pew Research. Retrieved October 10, 2023. https://www.pewresearch.org/short-reads/2018/04/11/millennials-largest-generation-us-labor-force/
Fry, Richard; Parker, Kim. (November 15, 2018). "Early Benchmarks Show ‘Post-Millennials’ on Track to Be Most Diverse, Best-Educated Generation Yet". Pew Research. Retrieved October 10, 2023. https://www.pewresearch.org/social-trends/2018/11/15/early-benchmarks-show-post-millennials-on-track-to-be-most-diverse-best-educated-generation-yet/
Bourke, Juliet; Dillon, Bernadette. (January 2018). "The diversity and inclusion revolution". Deloitte. Retrieved October 11, 2023. https://www2.deloitte.com/content/dam/insights/us/articles/4209_Diversity-and-inclusion-revolution/DI_Diversity-and-inclusion-revolution.pdf
Anderson-Finch, Shannon; Patterson, Nicole. (2018). "Inclusive Mobility: How Mobilizing a Diverse Workforce Can Drive Business Performance". Deloitte. Retrieved October 11, 2023. https://www2.deloitte.com/content/dam/Deloitte/us/Documents/Tax/us-tax-inclusive-mobility-mobilize-diverse-workforce-drive-business-performance.pdf
“Labor Force Statistics from the Current Population Survey”. (2022). Bureau of Labor Statistics. Retrieved October 11, 2023. https://www.bls.gov/cps/cpsaat11.htm
"Working at Visa Inc.". (2023). Great Place To Work. Retrieved October 11, 2023. https://www.greatplacetowork.com/certified-company/1281076
"Working At Visa: Company Overview and Culture". Zippia. Retrieved October 11, 2023. https://www.zippia.com/visa-careers-12486/
"Inclusion is All of Us". (2021). Leidos. Retrieved October 11, 2023. https://leidos.widen.net/s/k7hctcsphs/id-report-2021-pdf-vf-ia
"Leidos Retention Score". Comparably. Retrieved October 11, 2023.b https://www.comparably.com/companies/leidos/retention
"Human Capital - BlackRock Sustainability". BlackRock. Retrieved October 11, 2023. https://www.blackrock.com/corporate/responsibility/human-capital
"Job Openings and Labor Turnover". (January 2022). Bureau of Labor Statistics. Retrieved October 11, 2023. https://www.bls.gov/news.release/archives/jolts_03092022.pdf
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