Business Leadership Today

How Workplace Diversity and Inclusion Improve Employee Satisfaction and Employee Engagement


Matt Tenney, Author of Inspire Greatness: How to Motivate Employees with a Simple, Repeatable, Scalable Process

Despite countless studies and surveys on employee satisfaction and hundreds of millions of dollars spent on employee engagement each year, many organizations still struggle to substantially improve satisfaction and engagement. 

What we have come to learn is that the key to affecting real improvements in these areas is creating a positive employee experience, but this too is challenging. The pandemic further complicated this challenge by profoundly altering the employee experience for many workers throughout the world.

In the aftermath of the pandemic, in light of the Great Resignation, and with the looming threat of more labor shortages in some professions, ensuring a positive employee experience should be at the top of the to-do list for all organizations looking to re-energize, re-engage, and retain talented employees and boost employee satisfaction. 

This is especially important for organizations that are mandating a return to the office, which many employees who’ve been enjoying the improvements in their work-life balance are reluctant to do.

While many factors play a role in shaping the employee experience, diverse and inclusive work environments are emerging as a major component of a positive employee experience because of the many ways the work environment and the relationships employees forge with each other impact it.

Workplace diversity and inclusion can improve employee satisfaction and employee engagement by fostering a positive employee experience and supporting a psychologically safe work environment where all employees feel a strong sense of belonging and are empowered to consistently perform well. 

In this article, I’ll discuss how workplace diversity and inclusion can positively impact the employee experience in ways that lead to greater employee satisfaction and employee engagement, improving everything from employee retention to long-term profitability.

Diversity and Inclusion in the Workplace

Diversity and inclusion provide a conceptual framework for supporting the full participation of all, particularly underrepresented members of society who have been the target of discrimination historically.

Diversity encompasses the range of similarities and differences each individual brings to the workplace, including (but not limited to) language, race, national origin, ethnicity, gender, age, religion, sexual orientation, disability, and socioeconomic status. To build a diverse team though, an organization must first provide an inclusive work environment in which everyone can thrive. 

Inclusion is defined as “the policy of providing equal access to opportunities and resources for people who might otherwise be excluded or marginalized.” Inclusion is about creating an environment where all team members, regardless of their differences, can thrive and fully participate. 

Diversity and inclusion initiatives and strategies function together in ways that support fair and respectful work environments for all and promote diverse backgrounds, experiences, and expertise to improve business sustainability and recruitment processes.

How Diversity and Inclusion Support a Positive Employee Experience

Employee experience is the sum of all the interactions that happen during the employee lifecycle. An employee’s role, work environment, workplace culture, leaders, and how their leaders demonstrate a commitment to their growth, success, and well-being are all part of the employee experience journey.

Employee experience encompasses how an employee feels during all their interactions with their employer throughout their professional relationship with them and the impact those interactions have on their attitudes toward their job. 

Employee experience plays a significant role in employee motivation, engagement, satisfaction, and retention, but that’s not all. Employee experience is also strongly linked to customer experience. In fact, the link between the two is so strong, many are declaring that the employee experience is the new customer experience

As I’ve mentioned, there are many factors that influence the employee experience, but the most important one, as Business Leadership Today contributors Mark S. Babbitt and S. Chris Edmonds point out, is the quality of interactions and relationships employees have at work:

“It is safe to say, though, that at the core of the employee experience is the quality of relationships an employee has with their boss and peers. Yes, other factors (personal and professional growth, the quality of an employee’s workplace support systems, etc.) also influence employee experience. Still, the quality of workplace relationships has the most powerful impact.”

Since it has the most powerful impact, this is the area where we should be focusing our efforts when it comes to increasing the employee experience. Creating an employee experience that is truly inclusive and fosters positive relationships requires leaders to establish an inclusive culture that supports diversity.

Organizations with inclusive cultures embrace differences in backgrounds and experiences and build high-performing teams of employees who are engaged with their work and invested in the organization’s success.

Having an inclusive manager that is invested in helping their team members build authentic connections that foster belonging and a psychologically safe work environment can improve the chances that an employee will engage with their work, perform well, and stay with the organization.

The strong connections employees build with one another foster collaboration and spur innovation. Being able to bring their whole selves to work every day helps employees feel comfortable giving their whole selves to team efforts. This can supercharge teams and boost business outcomes.

How Diversity and Inclusion Affect Employee Satisfaction

Employee satisfaction is impacted by the employee experience and affects employee engagement, performance, retention, and a company’s bottom line. How organizations implement diversity and inclusion both shapes the employee experience and affects their overall job satisfaction. 

Employees care about diversity and inclusion and want employers to demonstrate a commitment, backed up by actions, to social responsibility. Research shows that 78 percent of workers say it’s important to work for a company that prioritizes diversity and inclusion, with 58 percent saying it is “very important.”

Working in diverse, inclusive work environments provides opportunities for employees to utilize their unique experiences and backgrounds. 

Diversity acknowledges the ways in which people differ, but diversity in the workplace also refers to diversity in how people think. When we bring team members together from diverse backgrounds, their diverse experiences can inform decision-making and fuel innovation.

Diversity and inclusion function together to empower employees to bring their best selves to work every day so they can build confidence and stay motivated to contribute and fully participate. 

How Diversity and Inclusion Affect Employee Engagement

Diverse and inclusive work environments can improve engagement, which can profoundly impact employee and team performance and increase cultural alignment. This is because of the role both play in the employee experience. 

When employees are satisfied that their employer is truly committed to fostering a diverse and inclusive workplace, they are twice as engaged as those who are dissatisfied. Not only that, they work 12 percent harder, are 57 percent more effective at collaborating with co-workers, and are 19 percent more likely to stay with the organization.

There are several ways inclusion improves the employee experience. Letting all employees have a voice in the organization and the permission to speak up without fear of retaliation creates an environment where employees are comfortable sharing ideas with each other, which helps teams brainstorm and identify creative solutions. 

It also demonstrates to employees that leadership is interested in what they have to say, the ideas they share, and the unique perspectives and experiences each brings to the table. This enhances their satisfaction and builds loyalty. 

When all employees are treated like valued members of the team, it builds trust and commitment. This helps employees engage with their work, commit to goal achievement, and stay motivated to perform at their best. 

Matt Tenney has been working to help organizations develop leaders who improve employee engagement and performance since 2012. He is the author of three leadership books, including the groundbreaking, highly acclaimed book Inspire Greatness: How to Motivate Employees with a Simple, Repeatable, Scalable Process.

Matt’s ideas have been featured in major media outlets and his clients include numerous national associations and Fortune 500 companies.

He is often invited to deliver keynote speeches at conferences and leadership meetings, and is known for delivering valuable, actionable insights in a way that is memorable and deeply inspiring.

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