Diversity itself covers a wide range of dimensions that differentiate groups and individuals from one another. There are the aspects of which most employers will be aware – age, race, gender, sexual orientation, religious beliefs and physical ability – however, this list can also extend to other factors such as parental status, geographical location, social class, political beliefs and even hobbies and interests.

In a business context, there are a number of powerful drivers towards embracing a diverse workforce and inclusive culture. These include the increasingly globalised nature of business, with clients, suppliers and competition often coming from overseas; the changing values of today’s workforce, with employees themselves often more attracted to a diverse and inclusive workforce; and the manner in which the organisation is perceived externally, by potential customers and the wider public. More practically, a genuinely diverse workforce can help to tackle issues created by fundamental shifts, including an ageing labour force and talent shortages in certain sectors, giving organisations a competitive edge in today’s economy.

Over the past decade there has been a greater understanding of the business benefits which a diverse workforce can bring, says Nick Tatchell, Director, Employee Surveys, at Towers Watson, and with this a stronger emphasis on the inclusivity aspect of talent management. “The biggest focus for talent management some years ago was exclusivity; the search for the few special people who had the X-factor,” he says. “Now transformative talent management refers to the workforce in its entirety; you can still segment but it’s about enabling the whole workforce to perform to its full potential.”

Despite this, a lot of organisations have considerable work to do. “Too often, the motivation is to do the bare minimum with the focus being on compliance with legislation,” says Tatchell. “While that is necessary, it’s far from sufficient in terms of realising the true opportunity that comes from diversity and inclusion.”

There are, though, still barriers to implementing diversity in practice. At a recent Engagement Network seminar run by Towers Watson, over half of HR specialists (57%) felt traditional structures – including factors such as a fear of change and an unconscious tendency for those in the majority to surround themselves with people of a similar background – were the biggest block to implementation in their business. More than a fifth (22%) felt the biggest barrier to diversity is down to a range of misconceptions, such as the view that diversity can lead to impaired organisational effectiveness, that some groups lack commitment, or that it may drive up the overall cost of employment.

A further danger is that organisations which introduce programmes designed to create a more diverse workforce are often disappointed when business benefits – in the form of greater productivity or higher profits – do not immediately materialise. Commentators and researchers alike are often guilty of making the direct link between diversity and business performance, but this is only likely to happen if they have also taken steps to create a truly inclusive culture which leads to employees being more sustainably engaged.

Where the right processes are in place, however, there is evidence of links to better business performance. Towers Watson’s own client work has revealed that increases in inclusion lead to a rise in employee engagement, which is directly linked to performance. However, managers and boards need to be aware there is no silver bullet, and that some aspects of performance can even dip before bouncing back.

The starting point for any evaluation of how and where an organisation can improve the diversity of its workforce is data: analysing the composition of the workforce as a whole across different levels of seniority, length of service and other demographic groups.

For example, one organisation found that a gender gap emerges with length of service; Towers Watson analysed their data and found a relatively equal split of 53:47 male/female ratio among staff who have served less than six months, but this widened over time to stand at 61:39 for those with between 10 and 15 years’ service. For those who had been with the organisation for more than 15 years, the gap was even more significant, with a 73:27 split in favour of men. There are underlying demographic reasons for this – many women give up work or move jobs after having children – but such analysis can be a useful means of identifying potential problems and solutions.

More in-depth analysis can be conducted into employee attitudes, which again can be segmented by particular groups or sections of the workforce, to identify trends or anomalies. This data can then be compared with external benchmarks to provide context. For example, this can reveal a gradual disillusionment creeping in with age; morale often decreases among workers in their mid-30s, for instance, and rises again around the age of 50.1 Such understanding of wider trends can be important in identifying and understanding where genuine issues with diversity may lie. However, organisations must also be careful to act on the findings of any such employee research if the entire exercise is not to be counterproductive and only serve to alienate those who already feel less included.

There are signs that diversity is being taken more seriously by organisations in general. At the recent Engagement Network seminar on diversity and inclusion, 80% of delegates agreed that the management of their organisation supported diversity in the workforce.

Having senior leaders support the concept of diversity and inclusion, alongside efforts to put it into practice is essential, and can go a long way to building a more loyal and engaged workforce. Gonzalo Shoobridge, Senior Consultant, Organisational Surveys and Insights, at Towers Watson, gives the example of a retail organisation where those from ethnic minority backgrounds would often find themselves subject to targeted abuse from customers. “The chief executive said this was unacceptable,” he says. “They looked into it and found that all those shops with higher levels of bullying and harassment by customers were located near pubs: it was decided to implement a zero tolerance approach, put in extra staff and security cameras with a link through to the police. Through these actions, the company’s leadership and respect for corporate values really came across and was appreciated by employees.”

Often, it is not just about what organisations can do to improve diversity and inclusion – it is important for employees to be involved too. Employee networks and communities can be a good way to achieve this. Emma Palfreyman, co-chair of Towers Watson’s own Women and Supporters Associate Community, says being a part of a community is an opportunity for associates from different parts of the business to get to know each other, leading to a better connected workforce and more engaged employees. “For us, we see involvement in running the community as a valuable development opportunity for the volunteers.”

Having commitment from the organisation and fellow employees is also vital, says Palfreyman. “To make our community sustainable in the long run, we have worked hard from the outset to get the governance set up right – ensuring we are connected with the business and reporting back regularly on progress being made,” she says. “We also have strong support from leadership and that is key to the success of any community.”

In some cases, there may also be a need for incentives to encourage organisations to address this issue. Fiona Hathorn is Managing Director of Women on Boards UK; an organisation that supports women to navigate their pathway to the boardroom. She gives an example from Australia. “There they have changed the law so if you employ more than 100 people and you don’t display data around diversity you can’t bid for government contracts,” she says. “That’s what we need here in the UK.”

While issues of diversity and inclusion in the workplace can be highly political and complex, the business benefits to organisations that create a genuinely inclusive culture are becoming clearer in terms of improved engagement, greater innovation, enhanced reputation as an employer, and ultimately stronger more sustainable business performance. “This link to performance is vital,” says Shoobridge.“However, we can’t lose sight of the moral case for promoting diversity and inclusion in the workplace – it is simply the right thing to do.