In a time where Diversity, Equity, and Inclusion (DEI) initiatives are being challenged, it is important to understand how investing in DEI can make organizations more successful and improve employee retention.
All employees deserve to feel respected and valued. Organizations across the United States are increasingly recognizing that DEI initiatives are not just about ethics or compliance– they are strategic tools to improve employee retention, satisfaction, and engagement. On top of that, one crucial update to DEI is adding belonging as a core aspect = Diversity, Equity, Inclusion, and Belonging (DEIB).
Below, we summarize key findings from academic research, consulting firms, and HR industry reports on DEIB’s impact on retention, engagement, and workplace culture. We also outline emerging trends and best practices– Diversity & Inclusion: The Key to Driving Workplace Success.
DEI’s Impact on Employee Retention Rates
Extensive research in the past two years shows a clear link between inclusive practices and improved employee retention. Here are some important research findings to understand:
- About 63% of employees (and 73% of Gen Z, 68% of Millennials) say they consider a company’s DEI efforts when deciding where to work.
- Inclusive companies have employee retention 5.4x higher than that of non-inclusive companies. Conversely, a lack of inclusion corresponds with higher turnover, especially among underrepresented groups who might feel undervalued.
- Similarly, BetterUp’s research indicates robust DEI initiatives can cut turnover risk in half (a 50% reduction).
- In a SHRM survey, only 9% of employees in positive, inclusive cultures considered leaving their job, compared to 42% in cultures perceived as “negative”.
These findings reinforce a key takeaway: DEI initiatives that promote inclusion and belonging directly improve retention rates. Failing to prioritize diversity and equity can seriously damage retention, amongst other things. Across industries, from tech to finance to healthcare, the pattern holds: inclusive workplaces have far lower turnover.
Adding “Belonging” to DEI: DEIB
Notably, belonging (the feeling of being accepted and valued) has emerged as a critical element of retention. When employees feel they truly belong, their loyalty soars. In contrast, if they feel excluded, nearly all will consider leaving.
Source: Diversity, Equity, Inclusion and Belonging At Work: A 2025 Guide
So, what is the difference between inclusion and belonging within DEIB initiatives? While inclusion and belonging are often used interchangeably, they represent two distinct concepts. Inclusion refers to the intentional actions and practices an employer takes, such as implementing fair and transparent policies. It’s about creating an environment where everyone is invited to contribute and participate.
Belonging, on the other hand, is the emotional response employees have as a result of those inclusive efforts. It reflects whether individuals feel accepted, valued, and connected within the workplace. When belonging is present, employees feel seen and heard, leading to stronger team cohesion and deeper engagement with their organization.
Influence on Employee Satisfaction and Engagement
Beyond retention statistics, DEIB plays a vital role in shaping employees’ day-to-day satisfaction and engagement. When organizations foster an environment where all employees feel valued, respected, and heard, job satisfaction rises. This should not be surprising: people who can bring their whole selves to work, without fear of bias or exclusion, are generally happier in their jobs and more committed to their organizations.
Inclusive practices also boost employee engagement. A Harvard Business Review study noted that employees who perceive their leaders are genuinely committed to diversity are more engaged and more likely to stay with the company. When inclusion is lacking at the leadership level, engagement suffers. Simple as that.
Additionally, engagement and retention are interlinked. In general, engaged employees rarely quit. By improving engagement through DEIB, companies create a positive feedback loop that further improves retention.
Best Practices for Retention-Focused DEIB Strategies
A central theme in recent reports is that DEIB efforts must move beyond one-off training sessions or slogans and embed into the employee lifecycle and company DNA.
Below are several proven retention-focused DEIB strategies and trends:
- Inclusive Policies and Work Environment: Companies are revising policies to be more supportive of diverse needs to make employees feel respected. Examples include flexible work arrangements (help for working parents, caregivers, and people with disabilities), robust parental leave for all genders, diverse holiday observances, and inclusive health benefits. Additionally, establishing Employee Resource Groups (ERGs) and safe channels for feedback can reinforce belonging.
- Leadership Commitment and Accountability: Successful organizations start at the top. This means leadership buy-in ensures adequate resources and drives a culture of accountability. McKinsey’s 2023 DEI Lighthouses report found that initiatives with invested, accountable business leaders were far more likely to achieve significant, sustainable impact.
- Career Development and Equity in Advancement: A top reason employees leave (especially from underrepresented groups) is the lack of growth opportunities or fair advancement. Effective DEIB retention programs focus on creating clear pathways for career advancement for all. This includes mentorship programs, sponsorship of diverse high-potentials, unbiased promotion processes, and training that enables upskilling. Likewise, ensuring pay equity and transparency is critical: Schneider Electric implemented a global pay equity framework (covering 99.6% of its workforce) to close wage gaps, which strengthened its reputation as an employer of choice and helped attract and retain more talent.
- Data-Driven Tracking of DEIB Outcomes: Leading organizations measure the impact of their DEIB initiatives rigorously, just as they would other business outcomes. This means defining success metrics and monitoring them over time. By analyzing data, companies can pinpoint where in the employee journey they might be losing talent, and then target interventions there. In short, what gets measured gets improved: organizations that regularly review DEIB impact data are able to refine their strategies and achieve better retention outcomes.
- Fostering Inclusive Day-to-Day Culture: Lastly, best practices emphasize that everyday inclusion behaviors – not just big programs – make a difference in retention. Managers at all levels should be trained in inclusive leadership skills: managing diverse teams, giving equitable feedback, recognizing and mitigating biases, and creating space for all voices in meetings. Over time, this builds the trust, loyalty, and emotional commitment that keep people with the organization for the long haul. As one 2023 study put it, “belonging won’t just happen – you need to be intentional about it”.
Where Equity Begins, Retention Follows
Investing in DEIB directly influences retention and overall workplace success. In today’s workforce, employees want more than just a paycheck; they want purpose, respect, and the sense that they truly belong.
By embracing inclusive policies, equitable advancement, and data-informed leadership, organizations can build cultures where people thrive and choose to stay. If you’re looking for additional insights, tools, or practical resources to support your journey, the Staffing Support Specialists Resource Center is a great place to start.
