Diversity and Talent Management: What is the Connection?

The relationship between diversity and talent management has never been under heavier observation than today. 

Many companies are moving away from diversity equity and inclusion in talent management while others are doubling down on their diversity and inclusion initiatives.

While diversity initiatives in talent management come in all shapes and forms, we are firm believers that being able to create an inclusive workplace should be a part of every organization’s talent management strategy.

So in this article, we will be exploring:

• The State of DEI in Talent Management
• The Relationship between Talent Management and Diversity
• Case Studies on Diversity Initiatives in Talent Management
• The Benefits of Building a Diverse Workforce

We will support our findings with real-world cases, recent news stories, and comments from experts in the HR world. 

Related Reading: 5 Best Diversity Statement Examples for 2025!

The State of DEI in Talent Management in 2025

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Let’s start things off by examining just where we currently are when it comes to diversity and inclusion in digital talent management today.

What better way to start than looking at the talent management practices of one of the largest companies in the world today, Google.

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"Diversity is being invited to the party; inclusion is being asked to dance."

- Sundar Pichai, CEO of Google

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For the longest time, Google as an organization alongside fellow tech giant Meta used be one of the leading voices in DEI practices. 

In 2020, they announced aspirational strategic goals around DEI and a spokesperson from Google stated in a message to CNET: "Diversity, equity, and inclusion remains a company-wide commitment and our programs are continuing to scale up."

Throughout, 2024, articles were published reiterating that Google remained committed to its goal of fostering diversity.

So it came as a shock to all when Google announced they will be rolling back their DEI initiatives and scrapping their diversity goals. And they aren’t the only ones.

The list of giant companies announcing they would be rolling back their DEI initiatives include:

• Amazon: The e-commerce giant has cut back on its DEI initiatives, revising hiring objectives and lowering diversity-related spending.
• Walmart: The retail powerhouse has scaled down its diversity efforts, making adjustments to employee training programs and supplier inclusion policies.
• Meta: As part of a broader shift in strategy, the Facebook parent company has pulled back on various DEI programs, reshaping its stance on workplace diversity and inclusion.
• McDonald's: The global fast-food chain has discontinued certain diversity-focused initiatives, making changes to its company-wide inclusion policies.
• Target: The major retailer has rolled back key DEI measures, including a reduction in its diversity-driven training programs.

That being said, there are some organizations that have pushed back against the major trend in canceling diversity initiatives in talent management:

• Delta Air Lines: Delta Air Lines has maintained its DEI programs, emphasizing their importance to the company's talent acquisition and business strategy. Peter Carter, Delta's Chief External Affairs Officer, stated that DEI efforts are vital for the airline's operations.
• European Investment Banks: Major European banks, including BNP Paribas, Barclays, UBS, and Deutsche Bank, continue to uphold their DEI policies.
• Apple: Apple has sustained its DEI programs, recognizing the business benefits such as innovation and employee motivation that arise from a diverse workforce.
• Costco: Despite political scrutiny, Costco has maintained its DEI policies. The company continues to support diversity and inclusion initiatives, recognizing their value in promoting a positive corporate culture.

The real question here is, what are the effects of these stances on talent management? 

• Are companies that continue DEI seeing better retention rates?
• Are those rolling back facing backlash from employees or consumers?

These are the questions we will be answering.

How Are Diversity and Talent Management Connected?

With the current state of diversity and talent management firmly established, let’s analyze just how effective talent management is connected to diversity.

What is Diversity in Talent Management?

Simply put, diversity in talent management means ensuring equal opportunities across all aspects of the talent management lifecycle, from hiring and onboarding to talent development and leadership progression. 

While including demographics like race, gender, or age is key here, diversity in talent management also refers to having diverse skill sets, perspectives, backgrounds, and experiences that contribute to a company’s success.

A diverse talent management strategy includes:

• Recruitment processes that  eliminate bias and attract candidates from a wide range of backgrounds.
• A workplace where employees have equal access to leadership and career growth opportunities.
• Inclusion that is embedded in company culture, making all employees feel valued, respected, and empowered to contribute.

Research suggests that:

• Organizations identified as more diverse and inclusive are 35% more likely to outperform their competitors.
• Companies with inclusive cultures experience 22% lower turnover rates and 83% higher employee engagement.

These key statistics around diversity in talent management strongly point to this conclusion:

The rolling back of diversity initiatives such as bias training and strategic DEI goals is not based on data.

Why is Diversity Crucial in Talent Management?

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"A diverse mix of voices leads to better discussions, decisions, and outcomes for everyone."

- Vernā Myers, Vice President of Inclusion Strategy at Netflix

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From creating a workplace that fosters a sense of belonging to, improving overall team performance, there is a multitude of reasons for many of the top voices in the world of work today to say that diversity is absolutely crucial in talent management. 

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A study conducted by Rand Corporation that included a qualitative review of DEI practices in the private sector, and interviews with representatives from DEI offices of select organizations concludes:

• A positive diversity climate increases job satisfaction and organizational commitment, making employees feel more content and loyal when they perceive their workplace as inclusive and supportive.
• A strong correlation exists between diversity, employee engagement, and performance, meaning inclusive workplaces don’t just make employees happier, they also lead to higher investment in their work and better overall outcomes.

Hill, Devon, et al. "Talent Management and Diversity, Equity, and Inclusion in Private-Sector Organizations." RAND Corporation, 2023.

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How Does Workforce Diversity Enhance Talent Management?

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With all the research supporting the importance of diversity in talent management, it’s time to go over the “How?”.

How exactly does workforce diversity enhance talent management.  

Here is a list of how organization’s that foster diversity and inclusion, create an environment that is productive and positive for all involved.

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1. Attracting and Retaining Top Talent

A commitment to diversity enhances an organization's reputation and boosts it’s employer brand, making it more attractive to a broader talent pool.

Inclusive companies are 1.7 times more likely to be innovation leaders in their industry, which appeals to prospective employees seeking dynamic and forward-thinking workplaces. - (InStride)

2. Fostering Innovation and Creativity

Diverse teams bring varied perspectives, leading to more creative problem solving and a better understanding of diverse customer needs.

This very diversity of thought is a catalyst for innovation, enabling companies to capture new markets and respond effectively to changing demands.

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3. Enhancing Company Culture and Employee Engagement

As we’ve seen in the studies mentioned above, including diversity in your talent management strategies results in increased job satisfaction, higher employee engagement rates, and a positive employee experience.

These factors  are some of the key drivers of employee engagement and they result in high employee retention while lowering your attrition rates.

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Case Study: Companies Leading in Diversity-Driven Talent Management

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Now that we’ve gone over the how diversity impacts talent management and the relationship between them, let’s go over some talent management strategy examples that truly support strategic DEI goals.

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1. AltFinance Initiative (2021-Present)

AltFinance, established in 2021 with $90 million from Apollo Global Management, Ares Management, and Oaktree Capital, aims to increase the number of Black students pursuing careers in private equity.

Partnering with Historically Black Colleges and Universities, the program has recruited 200 fellows, providing training in financial modeling, mentorship from industry professionals, and interview opportunities.

As a result, nearly 50 alumni now hold positions at leading Wall Street firms. This initiative demonstrates how targeted diversity programs can effectively expand talent pipelines and promote inclusivity in specialized industries.

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2. Rolls-Royce's "Being Like Me" Initiative (2022-Present)

Since 2022, Rolls-Royce has integrated diversity, inclusion, and belonging into its corporate culture through the "Being Like Me" initiative.

Their monthly program encourages employees to share personal stories on the company's intranet, fostering openness and psychological safety.

In an article published in the Financial Times under their Diversity Leaders series, Sylvia Pfifer states that the initiative has contributed to achieving gender parity on its board and the appointment of its first female chair, Anita Frew.

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3. Cisco's Proximity Initiative (2023-Present)

In 2023, Cisco implemented a "proximity initiative" encouraging leaders to engage with colleagues from diverse backgrounds to better understand their experiences.

As seen in a Financial Times article, the proximity initiative has led to increased empathy, allyship, and tangible changes in behavior, fostering a more inclusive workplace culture.

Despite challenges in the broader political climate, Cisco remains committed to diversity, equity, and inclusion,, implementing measures like pay parity reviews and flexible work arrangements to support diverse talent.

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Best Practices for Integrating Diversity into Talent Management

For diversity initiatives to make a real impact in your workplace, it needs to be woven into every aspect of talent management.

The most effective companies don’t treat it as a separate HR initiative or a talent management trend.

They see it as a fundamental part of how they attract, develop, and retain employees.

There are many different ways to get creative with your diversity related talent management initiatives.

Here are some of best practices that you can takeaway from this article and implement straightaway:

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• Remove bias from hiring by using structured interviews, blind resume screening, and diverse hiring panels.
• Ensure fair career development opportunities through mentorship programs, leadership training, and succession planning that support employees from all backgrounds.
• Create an inclusive culture where employees feel valued, respected, and encouraged to share their perspectives.
• Track progress with measurable goals by monitoring hiring, retention, and promotion data to hold leadership accountable.
• Build a psychologically safe workplace where employees can speak up without fear of bias or exclusion.
• Offer flexible work policies and inclusive benefits such as parental leave, remote work options, and mental health resources to accommodate diverse needs.

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At the end of the day

The conversation around diversity in talent management is far from over. While some companies step away from DEI initiatives, others recognize that an inclusive workforce is an essential aspect of talent management.

The organizations investing in diversity today aren’t doing it for appearances; they’re doing it because it drives innovation, strengthens retention, and builds a culture where employees thrive.

The research is clear. Diverse workplaces create better decision-making, stronger financial performance, and a more engaged workforce. The companies that double down on diversity in their talent strategies will be the ones leading the future of work, not struggling to catch up.

As they lead the future of work, they will need a strong talent management software to assist them. And they will be in luck, because they can try the highest-rated talent management software for Microsoft Teams, Teamflect, for absolutely free!

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