What is diversity management?

Building a diverse and inclusive workplace isn’t just about hiring people from different backgrounds—it’s about creating an environment where everyone feels valued, respected, and empowered to contribute. When organizations prioritize diversity and inclusion, they benefit from a wider range of perspectives, increased innovation, and stronger team performance.

Effective diversity management goes beyond policies and quotas. It requires a thoughtful approach to hiring, leadership, and company culture to ensure all professionals have equal opportunities to succeed. When people feel valued and supported, businesses thrive, and team engagement grows. Companies that build an inclusive environment can attract top talent, improve retention, and enhance collaboration across teams.

In this article, we’ll look at what diversity management means, why it matters, and actionable ways to implement it in your organization.

What is diversity management?

Diversity management is an organizational process used to promote diversity and inclusion in the workplace. This process involves implementing policies and strategies in hiring, management, training, and more. The goals of diversity management are to promote fairness and equality and leverage the advantages diverse organizations offer.

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Workplace diversity definition

Workplace diversity brings together people with different backgrounds, perspectives, and experiences. It includes factors like race, ethnicity, gender, age, sexual orientation, religion, disability, and socio-economic status. It also encompasses diversity in thought, skills, and professional experiences. 

Why should HR leaders care about diversity management?

Research has repeatedly demonstrated that diversity is a major asset to businesses. Companies identified as more diverse and inclusive are better at making decisions, are more innovative, and are 39 percent more likely to outperform those that aren’t. 

Why? More diverse workforces have a broader range of backgrounds, skills, and areas of expertise, meaning they can bring more and more innovative ideas to the table.

An organization that prioritizes diversity and inclusion also attracts more job candidates: For about 53 percent of U.S. workers, an organization’s DEI&B initiatives play an important role in decisions about where to work and 56 percent say focusing on diversity at work is a good thing. 

What are the different types of diversity management?

There are two types of diversity management:

1. Intranational diversity management: This method refers to managing a workforce within a single national context to provide opportunities for minority groups and recent immigrants
2. Cross-national diversity management: Also called international diversity management, this refers to managing a workforce comprising citizens from different countries and requires an organization to consider the laws, customs, and cultures in the countries in which it operates

Characteristics of diversity management strategies

A diversity management strategy works best when it’s intentional and well-rounded. Here are a few characteristics that make a strategy effective:

• Proactive approach: The best strategies come from a genuine commitment to building diversity in the workplace, not just meeting compliance requirements. Leaders can drive real change by setting measurable diversity goals, embedding inclusive practices into hiring and development, and holding teams accountable for progress.
• A broad perspective on diversity: Successful strategies recognize differences beyond demographics. They include diversity in experiences, viewpoints, and problem-solving approaches to create a workplace where everyone feels valued and alternative perspectives encourage innovation.
• Clear benefits for the business and people: A strong strategy connects directly to measurable outcomes. Organizations with inclusive workplaces often see better collaboration, higher engagement, and stronger decision-making. These outcomes benefit both the team and the organization as a whole.
• Action-oriented programs: A strategy is only as good as the actions behind it. This means implementing inclusive hiring practices, unconscious bias training, mentorship programs, and equitable career advancement opportunities.
• Ongoing review and improvement: Diversity management is not a one-time effort. Regular policy evaluations, feedback from team members, and progress tracking help ensure strategies stay effective and relevant.

What are the challenges of diversity management at work?

While diversity management is critical, it can also be difficult to do well, touching upon sensitive issues and larger systemic problems. Challenges of diversity management in the workplace include:

• Tokenism: The desire for a diverse workforce may lead HR leaders to take a “tokenism” approach. Companies may hire and promote people based on their identity rather than their merits, which misses the point of diversity management. 
• Interpersonal conflicts: People who come from various backgrounds and different life experiences and perspectives, can lead to disagreements and conflicts. This requires careful management and a high degree of empathy and inclusion.
• Challenges with cooperation and communication: Part of having a diverse workforce is having various styles of work and communication, such that facilitating effective collaboration becomes key. 

Diversity management best practices for HR leaders

Embedding diversity into an organization’s values and daily practices allows companies to create a workplace where everyone feels respected, valued, and empowered to contribute. Let’s explore how HR leaders can take actionable steps to improve diversity management.

1. Seek commitment from stakeholders and appoint a DEI initiative leader

Diversity efforts need support from leadership to succeed. Encourage senior leaders, from the board to the C-suite, to actively champion diversity and inclusion initiatives. Appointing a dedicated DEI leader or building a task force creates accountability and structure. Leadership buy-in and active participation ensures teams prioritize and track progress effectively.

2. Distinguish between diversity and affirmative action in company objectives and policies

Recognize the difference between diversity and affirmative action. While affirmative action often addresses historical inequities with specific policies, diversity focuses on building an inclusive and collaborative workplace. 

Companies may focus on addressing deeper issues of unconscious biases rather than filling hiring quotas. They can clearly define how diversity aligns with company values and objectives to guide policies and practices that support long-term organizational goals and create meaningful change.

3. Audit your current diversity management practices and collect data

Start with a clear picture of where your organization stands. Effective diversity management begins at the roots of an organization’s culture, values, and leadership, influencing every aspect of the company. 

Review existing diversity policies, workplace demographics, and inclusion practices through a structured audit. Use employee surveys, focus groups, and workforce data to better understand gaps and opportunities. This process sets the stage for meaningful, measurable improvements.

4. Put empathy first

Empathy is a powerful tool for building trust and transparency. Leaders who show empathy create a more open and inclusive workplace, and 50 percent of people with empathetic leaders report their workplace is inclusive (compared to only 17 percent among those with less empathetic leadership). Train leaders to listen closely, respond thoughtfully, and create an environment where everyone feels heard.

5. Focus on belonging

It isn’t enough to hire a diverse workforce. Once you’ve brought people into your organization, it becomes your responsibility to meet their needs and provide a positive employee experience. This requires actively creating spaces for marginalized individuals to speak up, create community, and have meaningful conversations about the reality of their experience with your company.

6. Establish goals and metrics

Set clear goals that align with your company’s diversity vision. Focus on measurable outcomes and KPIs, like increasing representation in leadership roles or improving inclusion scores in team member surveys. Regularly track and evaluate HR metrics to see what’s working and where your team can make productive adjustments. This data-driven approach keeps efforts focused and effective.

7. Identify new talent pools

Expand your reach by looking for talent in new places. Partner with organizations that connect companies with underrepresented groups or tap into alternative networks like community programs and diversity-focused job boards. Broadening your hiring talent pool helps you connect with skilled professionals who bring fresh perspectives and experiences to your team.

8. Look past hiring and offer leadership training opportunities

Diversity management isn’t just about recruitment. Focus on supporting team members throughout their employee lifecycle. Inclusive practices like unbiased performance reviews, equitable promotions, and meaningful recognition can make a difference. 

Mentorship programs also help underrepresented professionals grow their skills and prepare for leadership roles. Investing in leadership training ensures diverse voices are represented at every level of the company.

9. Provide diversity and inclusion training and safe channels of communication

Offer regular diversity and inclusion training that addresses unconscious bias and promotes inclusive practices. Make training interactive and relevant to your teams’ unique needs to promote buy-in. Create safe and confidential channels for team members to share feedback or concerns. Open communication shows your commitment to building a workplace where everyone feels supported, valued, and safe to voice their needs and concerns.

How to set goals and metrics for managing diversity

Diversity management programs can be qualitative, but tracking success with goals and metrics is just as important. Establishing measurable benchmarks helps HR leaders assess their progress, identify areas for improvement, and demonstrate the impact of their initiatives. Some useful diversity management KPIs to track include:

• Diversity across the organization: Review how well different demographic groups—such as race, ethnicity, gender, age, and disability—are represented throughout your workforce. Compare these numbers to industry standards or broader benchmarks to highlight where your organization is thriving and where there’s room to improve.
• Candidate demographics: Track the diversity of your applicant pool, those who make it to interviews, and the professionals who join your organization. This will help assess whether your hiring practices are fair and effectively attracting diverse talent.
• Retention and turnover across team member groups: Compare the length of time people from different demographic groups stay with your organization compared to others. Higher turnover in specific groups may indicate issues like lack of inclusion, insufficient support, or limited opportunities for growth.
• Employee net promoter score (eNPS): Measure how likely your people are to recommend your workplace to others. Breaking this score down by demographic groups can uncover differences in engagement and experiences, helping you make more targeted improvements.
• Advancement and promotion rate: Monitor how often leadership promotes people from underrepresented groups into leadership positions. Frequent promotions across a diverse workforce signal equitable practices, while gaps may highlight barriers that need attention.
• Utilization rates of employee resource groups: Track the number and frequency of participation in team member resource groups and how often. High participation demonstrates that these groups provide value, while lower engagement might point to areas for improvement.
• Metrics related to the success of specific diversity management strategies: Evaluate the outcomes of initiatives like diversity training or inclusive leadership programs. For example, measure the number of people who complete training or whether feedback from team members shows improvements in workplace inclusion.
• Pay equity: Assess whether compensation is fair and consistent across all demographic groups. Regularly reviewing pay structures can help ensure everyone is paid equitably for their work, reducing disparities and building trust.

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Including diversity management in your modern HR strategy

Authentic diversity management is about understanding that diversity is beyond a buzzword. To achieve real diversity and inclusion, you must be proactive, not reactive. That’s where diversity management initiatives come in.

Simply put, diversity management is one of the most important commitments HR departments can make. It can lead to greater employee satisfaction, an enriched company culture, improved employee loyalty, and the ability to attract top talent.

Diversity management FAQs

How do organizations define diversity?

Organizations define diversity as the presence of differences among people in a workplace, including but not limited to race, ethnicity, gender, age, sexual orientation, disability status, socioeconomic background, and cultural identity. However, diversity is more than demographics—it also includes differences in experiences, perspectives, skills, and ways of thinking.

A comprehensive definition of diversity recognizes both visible and invisible characteristics that shape how individuals interact and contribute. Many organizations also consider cognitive diversity, which focuses on different problem-solving approaches and viewpoints, as a key factor in driving innovation and collaboration.

How can HR professionals help with diversity management?

HR professionals are central to building and supporting diversity strategies. They can start by implementing fair hiring practices—like creating bias-free job descriptions and standardizing interview processes—to attract people from varied backgrounds. Beyond hiring, HR can foster inclusivity through training programs, mentorship opportunities, and team member resource groups.

Tracking diversity data is also a key step in diversity management. HR teams can analyze diversity and inclusion metrics, pay structures, and promotion rates to identify areas for improvement. 

How are diversity management and DEI&B initiatives related?

Diversity management sets the stage for successful diversity, equity, inclusion, and belonging (DEI&B) initiatives. While diversity management focuses on building a varied workforce, DEI&B ensures those differences are respected and valued. Equity helps address barriers, inclusion strengthens collaboration, and belonging ensures people feel connected and appreciated at work.

How are diversity management and equal employment opportunity (EEO) regulations related?

Diversity management and equal employment opportunity (EEO) regulations both aim to create fair workplaces but approach it differently. EEO laws require organizations to meet legal standards for preventing discrimination based on characteristics like race, gender, and religion.

Diversity management focuses on building an inclusive workplace rather than just meeting legal requirements. It focuses on building an inclusive and welcoming environment by actively promoting diversity and addressing inequities. When combined, EEO regulations and diversity management create a workplace that’s legally sound and people-focused.