Organizations recognize that diversity without inclusion limits their ability to leverage their workforce's full potential. Diversity is important: according to McKinsey, companies in the top quartile for gender and ethnic diversity on their executive teams were 39% more likely to experience above-average profitability versus their bottom-quartile peers.

However, inclusion is required to harness diversity's power in organizational problem-solving. Inclusion is also necessary to retain a diverse workforce or you risk watching your talent walk back out the door. 

"Today's workforce expects organizations to go beyond superficial metrics and assess whether any inclusion gaps exist for different employee segments. Our research shows measuring these seven dimensions provides a comprehensive view of workplace inclusion that drives real change." – [Betsy Bagley, Co-founder]

Let's explore seven key pillars that are the Pulsely framework for measuring workplace inclusion and its business impact.

1. Belonging

At the heart of workplace inclusion is Belonging – the ability for employees to make positive connections with colleagues while feeling valued and socially included. This dimension measures whether employees can authentically express themselves at work.

Research from BGC found that companies with higher levels of diversity get more revenue from new products and services, but this advantage only materializes when employees feel they belong. Belonging goes beyond being present; it's about feeling psychologically safe enough to contribute fully and authentically.

2. Psychological Safety

Psychological Safety, a cornerstone of innovation, measures whether employees feel they can admit and learn from mistakes without fear of negative consequences. This dimension is essential for fostering a learning mindset within organizations.

Whereas belonging relates to dynamics between peers at work, psychological safety relates to team and managerial dynamics. When psychological safety is high, teams are more likely to innovate and solve problems creatively. Conversely, when it's low, avoidable problems increase as employees hesitate to speak up or admit errors.

3. Career Opportunity

Career Opportunity examines whether employees receive the guidance and support needed for career development and whether they believe they have equal opportunities to achieve their career goals. Informal networks, unwritten rules, and social dynamics greatly impact career advancement, but unequal access to these resources—often shaped by affinity bias—creates barriers, as advancement depends not only on competency but also on opportunity, visibility, and access to influential networks.  Receiving equitable support correlates with employee retention and engagement.

The key is ensuring development opportunities and advancement paths are accessible to all demographic groups.

4. Managerial Relationships

This dimension evaluates how effectively managers support their employees' performance, trust their competence, and demonstrate a learning mindset. Strong Managerial Relationships are fundamental to daily workplace experiences and significantly impact employee engagement. Unfortunately, affinity bias (which is not intentional but impacts us all) often dictates who receives more attention and support from their manager. Mitigating this bias requires intentional effort.

"Our data shows that manager behavior is one of the most powerful levers for creating inclusive workplaces. When managers demonstrate trust and support, we see higher performance across all demographic groups." – [Pedro do Carmo Costa, Co-founder]

5. Work-Life Effectiveness

Work-life Effectiveness measures whether employees have the organizational support to integrate their work and life responsibilities according to their values. It’s important to examine if work demands trigger burnout, which can disproportionately affect certain demographic groups. For example, women in opposite-gender dual-career couples are 4 times more likely compared to men to handle household tasks. 

However, achieving work-life effectiveness requires an expansive definition of work-life – it needs to not only include caregiving responsibility but also community engagement, volunteer positions, regular exercise, pet care, etc. The goal is to provide an environment and policies that empower employees to excel both professionally and personally.

6. Appropriate Behavior

The Appropriate Behavior metric helps companies assess whether individuals have witnessed or experienced behavior undermining inclusion, including unintentional microaggressions and intentional bullying. It's crucial to monitor and address these behaviors, as these regular negative messages can cause high levels of stress and have an outsize impact on workplace culture and employee retention.

This dimension helps identify patterns of behavior that might be invisible to leadership, or to employees in the majority group who don’t experience them directly, but deeply affect the employee experience for underrepresented groups.

7. Accountable Leadership

Accountable Leadership measures whether employees believe leaders demonstrate commitment to inclusion through their words, actions, and priorities. It also examines if leaders address non-inclusive behavior or allow it to persist. Since silence is seen as implicit consent, leaders must address rather than tolerate behavior that is not inclusive, even if it happens with a high-performing employee. 

Deloitte research shows that today’s workforce wants organizations to address inclusion's reality meaningfully rather than just its appearance. This should start with accountable leadership.

The Business Impact of Inclusion

The true value of measuring workplace inclusion lies in its impact on key business performance indicators. Through research, we’ve identified three performance metrics influenced by workplace inclusion: Retention, Innovation, and Engagement.

Retention

Employee retention, measured by intent to stay beyond the next 1-2 years, correlates strongly with several inclusion dimensions. The strongest retention drivers are Career, Opportunity, and Accountable Leadership. When employees see clear career paths and witness leaders actively championing inclusion, they're more likely to envision a long-term future with the organization.

Innovation

The Innovation measurement focuses on how effectively employees contribute to and foster new ideas. Psychological Safety shows the strongest correlation with innovation, as employees need to feel safe taking risks and sharing novel ideas. Career Opportunity also plays a crucial role – when employees believe they can grow, they're more likely to invest in innovative thinking and problem-solving.

Engagement

Engagement measures how energetic and motivated employees feel in their roles and work environment. Work-Life Effectiveness and Managerial Relationships strongly correlate with engagement levels. When employees can balance their professional and personal lives and have supportive relationships with their managers, engagement levels soar.

The data clearly show the interconnectedness of these performance indicators. For instance, Career Opportunity emerges as a universal driver impacting all three performance indicators. It suggests that organizations focusing on equitable career development paths may see improvements across multiple metrics.

The impact of inclusion pillars on business performance indicators isn't uniform across all employee segments. Pulsely’s framework analyzes these relationships within different demographic groups to identify where inclusion gaps might impact different aspects of organizational performance. Findings can provide the foundation for an internal business case for inclusion for a specific organization. For example, if certain groups score lower on Psychological Safety, they may show lower innovation scores, indicating a specific focus area that can drive greater innovation.

Final Thoughts

Measuring these dimensions is crucial. Organizations with higher inclusion scores see tangible business benefits. However, measuring is just the first step. It’s important to use this data to identify patterns of experiences and create targeted interventions to address inclusion gaps.

Ready to measure and improve workplace inclusion in your organization? Book a demo with Pulsely to learn how our Workplace Inclusion Diagnostic can help you create a more inclusive work environment that drives business performance.