As India positions itself as a leading destination for global talent, building a diverse and inclusive workplace is the need of the hour. Witnessing a 28% increase in female enrolment in higher education in the last decade, gender diversity has sparked a conversation in support to India’s journey towards inclusivity and empowerment.

This blog explores the best practices, challenges and benefits of cultivating diversity in Indian companies. It also delves into why diversity is essential for long-term organisational growth and how businesses can implement effective diversity hiring strategies to stay ahead in the competitive landscape.  

Building a diverse and inclusive workplace requires implementing policies and practices that support fairness, equity, transparency and respect and safety for all employees.  

Technology, a great leveller today, also has a major role to play in bridging the gender gap. A ManpowerGroup survey shows that 80% of employers acknowledged that technology has allowed them to be more flexible, helping them to promote gender equality and 77% say that overall gender equality is being helped by tech advancements. The firms must provide training and education on diversity and inclusion to raise awareness, challenge biases, foster a culture of respect and belonging and create a frictionless organisation where full potential of the employee is realised.  

From a leadership’s commitment to retaining diverse talent, organisations can drive positive change and advance goals because diversity in the workplace is not a nicety but a necessity today. 

According to an industry survey, 54% of employers in India expressed optimism about their company’s Diversity, Equity, Inclusion and Belonging (DEI&B) initiatives being on track to increase women participation at different levels, way above the global average of 46%.

Whether or not you would be able to attract the right talent and retain them, in the long run, depends on how inclusive your organisation is and what initiatives it takes to promote workplace diversity. 

The Government of India protects minorities and underrepresented communities through acts such as The Equal Remuneration Act, 1976, The Transgender Persons (Protection of Rights) Act, 2019 and The Rights of Persons with Disabilities Act, 2016.  

Therefore, adopting and adhering to internal company policies that promote DE&I to ensure no discrimination among employees at the workplace should be of utmost importance.  

For example, the Companies Act 2013 mandates certain companies to ensure the composition of their board of directors has a good mix of gender diversity. Indian markets regulator, Securities and Exchange Board of India (SEBI), has mandated that all listed companies should have at least one woman director on their board. This ensures that all Indian companies hire more women in the middle and senior management.  

To fulfil the ambitious economic goal of achieving a $30 Tn economy by FY 2047, India must double down in hiring women’s workforce as they will play a very crucial role in taking India to third largest economy of the world. Companies with the most gender-diverse boards are 27% more likely to perform better financially than those with less diversity. Similarly, companies with the most ethnically diverse boards are 13% more likely to outperform those with the least diversity. Hence, hiring diversely is highly crucial when one wants to retain top talent and for the overall long-term productivity of the organisation. 

Implement diversity hiring strategies

Did you know? Companies that incorporate diversity and inclusion in their business strategy have increased their ability to spot and reduce business risks by 30%.

This not only highlights the cultural impact but also the business impact of diversity hiring. To take advantage of diversity hiring, here are a few strategies to implement:

• Build a team of diverse hiring managers 
• Source candidates from diverse groups 
• Re-evaluate your candidate experience criteria 
• Keep away from unconscious bias 
• Get referrals from the company’s existing diverse workforce 
• Invest in diversity and inclusion training 

Diversity is not a one-time goal but an ongoing journey of continuous cultural improvement. By embracing it, you empower the organisation to break barriers, challenge stereotypes, value differences and reward innovation. 

Challenges companies face in recruiting diverse talent 

On the roadmap to recruit top talent in India, talent acquisition specialists and human resource officials face many challenges while hiring for diversity, equity and inclusion. Some of the challenges are: 

• Sourcing diverse candidates: As many as 71% of hiring managers have reported that they struggle to achieve gender parity and that bridging the gender gap is their top priority while leading hiring initiatives. However, many employers struggle to attract female candidates due to the lack of female candidates. According to a LinkedIn survey, women apply to fewer jobs than men as women feel they need to meet 100% of the criteria of the listed qualifications, while men typically apply after meeting ~60%. 
• Unconscious hiring bias: Unconscious biases are built-in biases that can impact the hiring process and influence an aspirant, leading to unfair judgements and a lack of diversity during recruitment. We all have inherent biases, but it is our responsibility to challenge the same and lead a bias-free hiring process to recruit diverse talent.
• Lack of diverse leadership: Most leadership positions lack diversity, hindering the trickle-down effect of initiatives that lead to diversity hiring throughout the organisation. However interestingly, here’s a fun fact: teams that are diverse lead to 19% higher revenue.
• Lack of intersectionality: Studies show that millennials from diverse backgrounds are 83% more likely to be engaged at work in companies that provide an inclusive environment. A significant challenge is the failure to consider various layers of diversity—such as race, gender, age and sexual orientation—in recruitment efforts, leading to a lack of acknowledgement and integration of intersectionality in the hiring process.

Key benefits of workforce diversity in India 

India is becoming a top destination for global talent, with a 60% rise in job searches from abroad since June 2021. The nation’s rapidly growing technology, engineering and digital services sectors are driving the shift in job search, making the nation’s workforce more diverse and bringing a wide range of perspectives and experiences.  

Interestingly, outbound job searches from India declined 17% between June 2021 and June 2024. Indian job seekers are now prioritising local opportunities over international positions — a shift that showcases India’s economic stability, growth potential and work culture, which job seekers nowadays prioritise. 

Apart from the above, here’s a Randstad list of benefits of workforce diversity: 

• A group of people with diverse backgrounds, experiences and insights may be more adept at developing innovative solutions to challenges, leading to more robust business performance.
• A diverse workforce helps companies attract top talent, as a potential candidate who sees people with similar backgrounds succeeding at your company is more likely to accept your offer.
• A company succeeding with its DE&I efforts will gain a competitive edge as a diverse workforce becomes paramount in driving growth. 
• Companies are more likely to retain and nurture internal talent by making the workplace and work culture more inclusive. With the workforce getting younger, it becomes clearer that employees want to feel represented, respected and included. 
• Diversity and inclusion in leadership are crucial for retaining and developing talent. When employees see diverse individuals making decisions at the top, they are likelier to stay with the company.

How can businesses improve D&I? 

Referencing a variety of proven sources, here are some interesting points: 

• Organising sensitisation workplaces: Unsupportive language and attitudes of co-workers can hinder efforts to make employees feel inclusive and diverse at work. Sensitising people through various resources and tools and helping them understand how to operate in a diverse community helps negate this obstacle. From organising engaging workshops to a Q&A session, these exercises can help create a diversity-sensitive space for organisations.
• Employee resource groups: Creating a forum for employees from diverse backgrounds to advocate change, share experiences and network can enable and enhance inclusion. Here allies are folks who support and advocate for diversity and inclusion play an essential role in amplifying marginalised voices, challenging stereotypes and fostering an inclusive culture of belonging.
• Provide learning and development opportunities: Organising learning and development workshops will help workers enhance their skills and perform their best. Focusing on knowledge enhancement attracts an inclusive workforce. For example, the Karmayogi Bharat initiative by the government.
• Internal leadership development programmes: According to a survey of 3,150 Indian employers, internal programmes that involve leadership development proved to be most effective in retaining diverse talent.18 Hence, having trained leadership at the top can help improve diversity and inclusion by employers. 

As many as 57% of employees believe organisations should aim to be more diverse and work harder to meet these goals. This includes gender and racial diversity and inclusivity of people with disabilities.

In today’s business landscape, building a diverse workforce is not just a moral imperative but also a strategic advantage. As India grows as a global talent hub, organisations focusing on diversity and inclusion are better positioned to attract top talent, foster innovation and drive long-term business success.  

By implementing thoughtful diversity hiring strategies, addressing challenges head-on and creating an inclusive workplace culture, Indian businesses can unlock the full potential of their workforce.  

Diversity is an ongoing journey that requires continuous effort and commitment from the top, but the rewards—enhanced performance, better team synergies, Novel Ideas and Innovations, stronger employee engagement, Retention and a more resilient future ready organisation—are worth the investment.