The Surprisingly Powerful Role of Senior Leaders in Employee Inclusion

The demand for workers in the US greatly exceeds supply, with almost two job openings for every unemployed person, according to Bloomberg. Globally, the labor market is also tight, even by historical standards, according to the World Economic Forum.

This job growth has been great for employees, giving job seekers options and leading to strong wage growth in certain markets. But for business leaders, attracting and keeping workers, especially diverse ones, has become a top concern.

However, business leaders have a powerful tool to retain workers: improving employees’ feelings of inclusion leads to higher retention. BCG’s BLISS Index, which is based on a survey of 27,800 employees across 16 countries, reveals that senior leadership and direct manager behavior as well as the diversity of the leadership team are deciding factors in whether employees choose to stay or leave a company.

Senior leadership diversity and behavior, together with direct manager behavior, are the most influential factors driving inclusion at work, accounting for two-thirds of employees' overall sense of inclusion, according to this new research from Boston Consulting Group (BCG).

Senior leaders may not fully realize the impact they have on employee inclusion through their own actions as well as through the composition of their leadership teams. Companies with diverse leadership teams are much more likely to have inclusive cultures, directly impacting retention.

Front-line managers also play a significant role in whether employees feel included, which BCG’s BLISS Index demonstrates is a key element in increasing employee retention rates.

"It is astounding how strong the correlations are between aspects of leadership and employees' feelings of inclusion," says Gabrielle Novacek, a Managing Director and Partner at BCG. "When you look at how much of inclusion is driven by the messages senior leaders communicate, the actions they take, and the cultures they nurture, it's a profound call to action."

Here’s how senior leaders and direct managers can create a psychologically safe and supportive workplace:

• Model inclusive behaviors that make employees feel seen and included, which builds inclusivity.
• Build a diverse leadership team that reflects different identities, experiences and backgrounds, which foster authenticity.
• Prioritize a culture where employees feel free to express their authentic selves and make mistakes, which creates psychological safety.
• Promote Diversity, Equity, and Inclusion initiatives and encourage mentorship programs, two of the most effective ways to promote inclusion.
• Be open about your own personal challenges and vulnerabilities to help build a more authentic and inclusive work culture.