Diversity Management: Overview & Strategies for Any Business

Diversity management has been important for businesses of all sizes for several decades now.

Early on, many organizations may have addressed the concept of diversity as an obligation to comply with legal frameworks put in place to respond to societal changes and demands. However, as time has passed, many recognize that a diverse workforce benefits an organization beyond meeting legal requirements, enriching companies and their employees in countless ways.

Recently, diversity, equity, inclusion, and access have come to the forefront of societal discussions in new and urgent ways, and this renewed conversation compels employers to take a more meaningful look at their programs and how they approach their workforces. Diversity management is the vehicle by which they undertake this review and redress issues.

But how can businesses actually begin to develop or refine their own diversity practices in tangible, impactful ways? What is the connection between diversity management and other concepts like equity, inclusion, and access? This guide will cover the following essentials:

• Diversity Management FAQ
• How to Audit Your Current Diversity Practices
• How to Improve Your Diversity Management Practices
• How HR Experts Can Help with Diversity Management

Diversity Management FAQ

To start, we will provide additional context by answering more common questions about diversity management and related topics:

What is diversity management?

In the broadest sense, diversity management is the set of internal practices and ongoing initiatives that an organization implements to promote, achieve, and maintain diversity in its workplace.

It extends beyond human resources policies and practices such as hiring, compensation, or employee development, although diversity management often informs these practices. This structure or set of business protocols and values touches on all areas of the organization and is not a one-shot implementation. Rather, it is executed over time.

Whatever an organization’s specific diversity-related goals, diversity management is the process by which it achieves and maintains them.

How do organizations define diversity?

State and federal governments protect certain classes of individuals by enacting anti-discrimination laws. On the national level, Title VII of the federal Civil Rights Act of 1964 and other federal anti-discrimination laws set the minimum standards that must be met. Many states add to this list of protected categories.

With an eye on creating as inclusive a culture as possible, many companies extend their diversity programs beyond legally recognized protected categories. Although not an exhaustive list, the diversity of any given group of people can include individual qualities such as:

• Race
• Ethnicity/national origin
• Age
• Disability
• Family status

• Sex
• Sexual orientation
• Gender identity or expression
• Religion, belief, and spirituality

• Neurodiversity
• Generation
• Life experiences
• Veteran status
• Language

Organizations can then define their diversity goals in a number of ways. For example, a company may seek to foster and retain a racially-diverse workforce that resembles the demographics of its actual community and/or customer base.

From there, a diversity management strategy would include a range of practices and exercises aimed not just at achieving that goal but also ensuring that it is maintained and actively valued over the long run.

Why does diversity management matter?

Simply put, organizations today have an increased obligation to be socially-conscious employers.

We see this is in the prevalence of company mission statements and corporate social responsibility programs, but employees and consumers alike are interested in seeing companies do more than talk the talk—they must also walk the walk by taking an authentic interest in diversity and making it a reality through diversity management. 

A demonstrated effort to foster and maintain diversity shows employees that you truly value the range of perspectives they bring to the table. This can then drive increased engagement and retention, which are critical in today’s labor landscape. As a recent Gartner survey reveals:

Organizations that are able to enact sustainable D&I (diversity and inclusion) strategies can achieve meaningful results, including 20% increases in organizational inclusion, which translates into a 6.2% increase in on-the-job effort, a 5% increase in employees’ intent to stay with the organization, and a nearly 3% increase in individual employee performance.

Projected across your entire workforce over time, these benefits can be quite substantial. Effective diversity management can help organizations with recruitment, engagement, retention, creative decision making, and their public image, all of which can drive real business results in the forms of healthier bottom lines and more agile, innovative teams.

What are the origins of the concept of diversity management?

The concepts of diversity management and diversity, equity, and inclusion (DEI) were initially born out of the history of equal opportunity and affirmative action at the national level. Federal legislation that explicitly requires some level of fair hiring practices and establishes the notion of “affirmative action” reaches back to the New Deal era of the 1930s.

Our present understanding of diversity in the workplace was then broadened and largely shaped by the Civil Rights Act of 1964 and the establishment of the Equal Employment Opportunity Commission (EEOC). Congress has taken steps to eliminate discrimination and level the playing field by crafting legislation prohibiting discrimination based on a broad spectrum of protected categories, from race and ethnicity to disabilities and religion.

Most states have also implemented nondiscrimination schemes, many extending protections and rights beyond what is required at the federal level. Whether federal or state, the one thing that is predictable about this area of the law is that it is always evolving.

Regardless of what is happening in the legal arena, many businesses see the value in actively promoting and fostering diversity among their employees. Diversity, inclusion, and access instill deeper employee satisfaction and engagement, strengthen employee retention rates, encourage creativity and productivity, and drive business growth through improved profitability. These results often prompt C-suites to recognize DEI’s value and pursue diversity-related goals beyond legal requirements by implementing diversity management programs.

How does diversity management relate to DEI initiatives?

An organization mindful of DEI seeks to be a diverse workplace that recognizes the uniqueness of individuals and provides equitable access to resources and opportunities by actively combatting structural barriers to success.

Diversity, equity, and inclusion (DEI) refers to several key concepts:

• All of the qualities, experiences, and work styles that make an organization’s employees unique
• How the organization recognizes, fosters, and leverages that diversity
• The access to resources and equitable opportunities that the organization provides to its employees
• The organization’s recognition and handling of barriers that might prevent employees from fully contributing to the organization’s success

Diversity management involves the on-the-ground practices an organization implements to achieve its diversity-related objectives. It is an ongoing process that continually reviews DEI initiatives, always seeking to improve an organization’s diversity status.

How does diversity management relate to equal employment opportunity (EEO) regulations?

A robust diversity management approach enriches the work environment and drives business results. Just as importantly, it also ensures that a company stays legally compliant. Failure to abide by state and federal nondiscrimination guidelines can result in lawsuits, fines, hefty settlements or judgments, and tarnished reputations.

Regulations relating to diversity management fall into two general categories:

Equal Employment Opportunity (EEO) Regulations

Legislatures at the federal and state levels have enacted legal frameworks addressing fairness and equal treatment for specifically designated classes in hiring and all aspects of employment.

Federal law specifically protects applicants, employees, and former employees from discrimination based on race, color, religion, age, national origin, disability, sex, sexual orientation, gender identity, genetic information, veteran status, and citizenship. Major examples of such legislation include the Equal Pay Act, the Civil Rights Act, the Americans with Disabilities Act, and the Age Discrimination in Employment Act.

At a minimum, state laws must mirror these protected categories, but some states extend protections beyond federal law by adding classifications.

Affirmative Action

To work with the federal government, businesses must comply with additional legal requirements. Under affirmative action regulations, government contractors or subcontractors must implement proactive plans focused on providing individuals with equal opportunity. These Affirmative Action Plans do not involve rigid hiring quotas but rather benchmark targets monitored by regulating agencies.

DEI initiatives and satisfaction of Affirmative Action requirements work in conjunction to strengthen each other as part of a comprehensive diversity management program. Through this process, organizations pursue, achieve, and foster their diversity-related goals while simultaneously meeting the legal expectations set by state and federal requirements.

EEO and affirmative action regulations pertain primarily to an organization’s compliance practices. Diversity management and DEI are separate concepts that may, when put into practice, overlap with actions that an organization takes to comply with labor regulations.

This means that although progress towards one of these areas can help to strengthen the others, these concepts should not be treated synonymously. 

How to Audit Your Current Diversity Management Practices

Before your organization can begin strategically improving your diversity practices, you need to start with a solid understanding of your current practices. HR audits are an effective tool for deeply analyzing your strategies and processes in one or more areas of your operations, and they can be adapted to focus specifically on diversity management.

This process entails reviewing and studying the impact of diversity initiatives across the entire organization. We recommend these steps:

1. Determine the scope and stakeholders of your audit.
   • The scope of a diversity management audit should include legal compliance, recruitment and hiring practices, salary and benefits practices, employee development opportunities, and other employment policies and procedures. These audits are typically conducted by a senior leader, an internal HR or DEI professional, or an external consultant. Also take time to identify the individuals across relevant departments who will need to assist with fact-finding and with conducting employee surveys.
2. Create a diversity survey for your organization.
   • Develop a survey to gauge employee opinions and generate feedback on the organization’s diversity practices in the various scope areas listed above. Are employees aware of the diversity practices already in place? Do they feel that they’ve been effective or meaningful? Do employees feel that you can and/or should go further to foster diversity?
3. Collect relevant internal data and questionnaire responses.
   • Collect employee survey responses and begin compiling your findings. At the same time, work with relevant departments to collect data on the real impact of any current diversity practices.
4. Benchmark your findings against external data.
   • Once your audit’s findings come into focus, you need external data to compare them against. In many cases, this means comparing your findings to data from organizations whose diversity practices you wish to emulate. This will give you a stable frame of reference on which to build strategic next steps. External consultants can often assist with sourcing and analyzing benchmark data.
5. Analyze and report your audit’s findings.
   • Taking your audit’s data and benchmark comparisons, report your findings to departmental and organizational leadership. Highlight key takeaways and recommendations by importance and/or urgency.
6. Develop a roadmap for implementing a diversity management plan.
   • Steps for creating a concrete improvement plan will be covered in the next section of this guide.

How to Improve Your Diversity Management Practices

Once you have a clear understanding of the diversity management practices your organization already has in place, how employees feel about them, and how they stack up against those of other organizations, you can outline a concrete diversity management improvement plan. We will start with recommended steps to follow and then cover additional diversity management strategies and tips to keep in mind throughout the process.

Developing a Diversity Management Improvement Plan

1. Review relevant findings.
   • Return to your audit’s findings and recommendations. Review the data and familiarize yourself with trends uncovered in employee feedback.
2. Map the areas that require attention and strategic improvement.
   • Dig deeper into your audit’s recommendations. Which areas need improvement? For instance, your audit may have found gaps in or recommended improvements to your recruitment practices, leadership and management styles, employee engagement, or more. These key areas will anchor your diversity management improvement plan.
3. Develop your diversity management goals.
   • Set specific goals for your diversity management improvements. Goals should be KPI-based (key performance indicator), easily measured, and tracked over time. While it may be difficult to measure “diversity” as a broad goal, you can break it down into more tangible targets: specific improvements in diversity questionnaire results, engagement rates with new programs, demographic breakdowns of candidate pools, etc. Clearly communicate these goals to the initiative’s stakeholders.
4. Identify and/or develop diversity management resources.
   • What will you need to improve your diversity management practices in the areas outlined above? Who will need to be involved? This step may entail creating an internal diversity council and employee resource groups, sourcing new workplace training resources, hiring a DEI consultant, conducting secondary audits of your organization’s compensation practices, or any other logistics that need to be handled in order to move forward.
5. Communicate your plans to stakeholders.
   • As your plan takes shape, stay in communication with its various stakeholders and explain how each department will support the overarching diversity management goals. This also involves putting thought into the longevity of the plan; how will HR ensure the long-term adoption and sustainability of new improvements that are implemented?
6. Regularly review progress towards goals.
   • Roll out your diversity management improvement plan and regularly check on its progress. Schedule regular meetings and reports to ensure all stakeholders have a continuous sense of elements that are working well and those that require extra attention, revisions, or resources to be implemented properly. During this process, it is HR’s responsibility to help foster a sense of continuous improvement and optimism about working towards shared goals.

The exact steps that your organization follows may vary based on your unique context and goals. However, following this core structure will help ensure that your approach is organized, goal-driven, and backed up with the clear communication needed for success.

Diversity Management Strategies and Tips

Be authentic and deliberate with implemented changes. Leadership must encourage buy-in and engagement from the top-down and across departments to sustain adoption of your diversity management improvements.

Offer diverse engagement and growth opportunities for staff. Develop new mentorship or coaching initiatives to develop more diverse leadership pools over time.

Prioritize communication and education from the very start of your plan. This will support adoption and enthusiasm. Look for helpful resources and ensure that they and your diversity management goals are easily accessible.

Ensure policies are transparent and built on a foundation of compliance. Work with an outside professional as needed to double-check your EEO and FLSA compliance as it relates to recruitment and other employment practices.

Recruit more diverse talent. If recruitment is an area of focus for your improvements, follow a few diversity recruitment best practices:

• Expand your outbound recruitment efforts to new, diverse sources.
• Ensure inbound recruitment postings are accessible and in diverse digital spaces.
• Publicly highlight your DEI initiatives and goals to show candidates your interest in and dedication to diversity.

Define your organizational values and integrate them across your activities. If diversity, equity, inclusion, respect, and open communication are important to your business’s identity and long-term goals, enshrine them in a set of concrete values. Communicate them across the organization and continually reference them when making and announcing new changes or strategies.

How HR Experts Can Help with Diversity Management

When considering diversity management improvements and weighing your organization’s options, it is important to remember that diversity is not inherently an HR initiative.

It’s a business imperative in which HR plays an integral role in relevant areas, like employee recruitment and retention. HR can certainly help to lead the charge, but diversity management must extend into a wide range of business areas, like leadership, marketing, vendor selection, public relations, and more.

However, HR is often in a unique position to connect the various parts of a business and direct them towards shared internal goals, like diversity management improvements. As such, HR consultants with expertise in this area can give your organization the structure and guidance needed to make meaningful steps forward. HR experts can support your organization in:

• Auditing the effectiveness of past diversity efforts
• Surveying employees and benchmarking data
• Laying out strategic roadmaps for diversity management
• Implementing changes in HR-specific areas like recruitment, workplace training, and retention
• Improving existing HR-related processes, for instance analyzing and reducing recruitment bias

RealHR Solutions is a leading provider of flexible, tailored support drawn from years of experience across all areas of HR. Our experts have the knowledge and resources to help you better understand your diversity management needs, set goals, and begin using your HR functions to pursue them in concrete, impactful ways. To learn more about the role of HR in diversity management and our complete range of services, please get in touch.

And to continue learning about the role of HR in driving meaningful, strategic change, keep exploring with these additional resources:

• How to Hire a DEI Consultant. An expert specialized in DEI can also help you openly address diversity challenges with your team and lay a foundation for concrete strategic changes.
• What, Why, When, and How to Conduct a Pay Equity Audit. Compensation equity is a particularly tricky topic, but it is extremely important for signaling your organization’s dedication to fairness.
• Employee Coaching: Complete Overview and How-To Guide. Mentorship and coaching can be invaluable tools for developing more diverse, engaged leaders at your organization.