The Four Stages of Diversity Management

Diversity management has four stages. What stage of managing diversity in the workplace is your company inDiversityInc has been studying the four stages of diversity management for more than a decade.


Most companies are in the first two stages, with companies that earn spots on the upper portions of The DiversityInc Top 50 Companies for Diversity list in Stage Three. We don’t yet know any companies that are in Stage Four but a handful of very innovative companies are poised to break through to that stage.

Stage One: Celebration Focused

The company has begun to recognize the value of diversity and begins to have celebrations, such as Black History Month and Cinco de Mayo day in the cafeteria. The danger for these companies is in raising expectations with no corresponding gain in opportunities. They have a high level of regrettable loss (loss of talent, particularly from traditionally underrepresented groups) that could have been developed. They also have increasing difficulty in recruiting people from these groups and all younger people, who want a more inclusive environment, according to Pew Research reports.

Stage Two: Workforce Focused

The company has created a diversity planwith actions, objectives and milestones. It has begun to show gains in the diversity of its workforce and has implemented resource groups and, often, a structured mentoring program. The company now has a competitive advantagewith talent and reaching customers/clientsover competitors still in Stage One.

Stage Three: Marketplace Focused

The organization has metrics-driven accountability for its diversity-management efforts, often through its executive diversity council. Its human-capital and supplier-diversity metrics are well above average and it assesses and communicates clearly the value diversity management is bringing to the organization. The company exhibits cutting-edge diversity-management initiatives, such as innovative work/life programs that aid in retention and talent development, or clear linking of supplier-diversity efforts to community building. It is outpacing its competitors in reaching and developing talent and creating marketplace solutions. These companies outpace their competitors in raising cultural competency in marketing and sales efforts.

Stage Four: Out-Thinking Competition

These companies leverage diversity management to create, sponsor and nurture innovation. They provide thought-leadership and integrate cultural competency in all they do, from recruiting to customer service.

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