Benefits of hiring for diversity and inclusivity

Businesses are responsible for creating recruitment processes that provide equal opportunities for everyone.

Adopting business practices that prioritise diversity and foster an inclusive work environment can help attract the best applicants for a role, resulting in more effective and productive teams.

Diversity and inclusion (D&I) are terms often used in tandem though they are different concepts.


Diversity in the workplace refers to a workforce that is reflective of the wider society in which it exists and operates.

A diverse workforce will consists of people from different ages, genders, cultural backgrounds, physical abilities and disabilities, religions, and sexual orientation.

Moreover, diversity in the workplace is about recognising, valuing and taking into account differences, be they different experiences, skills, or backgrounds.


Inclusivity refers to granting all employees equal opportunities to participate, contribute and succeed in their roles and ensuring that everybody is treated fairly and respectfully.

It is not about practice of ‘including’ diverse groups in the workplace.

Instead it concerns individual experience, where everyone feels a valued part of an organisation without the need to conform in any way.

The Equality Act 2010 safeguards employees against discrimination both when applying for a job and as an employee.

The Act makes it unlawful for employers to discriminate against job applicants (and existing workers) because of one of the nine protected characteristics; age, disability, gender reassignment, race, religion or belief, sex, sexual orientation, marriage and civil partnership, pregnancy and maternity.

When recruiting staff, employers are responsible for considering all job applicants equally, without prejudice or bias influencing decision-making.

Research by the CIPD found that while improvements have been made in building more inclusive workplaces throughout the UK, there's still progress to be made.

Professional standards organisations such as the CIPD and ACAS provide advice, support and templates to help smaller businesses ensure fair hiring practices, and develop staff learning and development.

The benefits of hiring for diversity and inclusivity

Adopting a diverse and inclusive hiring strategy can benefit employees and businesses, including:

Attract better qualified staff

A D&I focused recruitment process may help a business hire better qualified and more motivated employees, which can in turn deliver genuine business benefits.

Research by Robert Walters found that widening a talent pool gives businesses a greater chance of attracting the best and brightest into their organisation.

It found that 51% of employers believe that diversity policies can help attract employees with unique skills into their workplace.

Boost brand reputation

Promoting diversity and inclusivity in your workplace can enhance your business reputation with both new and current employees, customers and investors.

Diversity can also broadens your customer base. Many customers prefer inclusive companies and, if your business does not have a strong D&I recruitment policy, you may miss out on sales and customer relationships that ultimately enhance your profitability.

Increase staff retention

With a diverse and inclusive hiring process, businesses could increase their staff retention figures.

Research by the CIPD found that women and people in the LGBTQ+ community are more likely than others to be disproportionately subject to discrimination, exclusion and barriers at work.

A high staff turnover can lead to increased recruitment costs.

Research by the CIPD found that staff want to work with businesses that demonstrate good employment practices.

This may include embracing employees' values, backgrounds, expertise and consulting staff on business strategies, policies or workplace improvements.

Harvard Business Review recommends businesses use tools such as segmented engagement surveys and focus groups to find out how to keep their employees engaged and committed to their organisation.

Open up new markets

Smaller businesses that champion diversity and inclusivity could expand their reach into new consumer markets by capitalising on the insights and knowledge of a diverse workforce.

According to the UK health and safety organisation CHAS, employees from different backgrounds may have unique knowledge of other markets and customers.

Businesses can develop new strategies tailored to these markets built on market expertise from existing employees.

A diverse workforce may make it easier to forge partnerships with international companies, allowing greater opportunities to win contracts and tenders in other countries.

Boost productivity and staff morale

Hiring for diversity and inclusivity can boost staff productivity and morale.

For example, analysis by McKinsey found that executive teams with more than 30% women are more likely to outperform those with either fewer or no women.

A boost in performance and productivity could lead to diverse businesses generating innovations, strategies and more effective marketing campaigns.

Employees may feel more comfortable expressing ideas and being themselves, knowing that they are employed by an inclusive and welcoming business full of diverse identities, ideas and talent.

Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.

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