Retaining valuable employees from all social groups is quite challenging, but understanding what keeps diverse employees in their organizations can help. Leaders who want to retain diverse employees should understand that employees from distinct social groups become embedded in their work organizations in different ways. According to our research, published in the Journal of Management Studies, employees from distinct (dominant or marginalized) social groups become enmeshed in their organizations differently. Employees from marginalized groups, such as women and people of color, may take longer to become embedded, and usually to lower degrees than employees from dominant groups. This organizational embeddedness depends on their organizations’ diversity and inclusive environments. This means that managers can speed up this process and be more likely to retain valuable diverse talent through inclusive leadership.

Employees’ “organizational embeddedness,” (OE) consists of and is caused by three dimensions – their links (social connections in the workplace), fit (compatibility in terms of values and needed skills), and sacrifice (the resources they would not want to give up by leaving). We complement current diversity research with OE to delineate new ways to motivate and retain employees from all social groups. Prior to our research, organizational embeddedness had rarely been applied to diverse organizations. Our research reconceptualized OE and its three dimensions to be more suitable to organizations that vary in the extent to which they are diverse and inclusive. With our framework, management scholars and practitioners can better analyze the dynamic process through how employees become embedded in the organizations. Specifically, we explain (1) why and how the OE development process varies for employees from dominant and marginalized social groups across organizations that vary in their diversity context (degree of organizational demographic diversity, homogeneous status hierarchies, and inclusion), and (2) how inclusive leaders can manage the OE development process of employees from all social groups and create diverse, equitable, and inclusive workplaces.

Understanding the process of embedding employees from all social groups

OE provides a reason why employees stay and perform in the organization. We argue that the relationships among various social groups in diverse organizations can prevent employees from marginalized groups from developing embeddedness quickly and effectively. In more detail, the organizational factors that promote or inhibit the embedding process differ across a diversity continuum. We use an existing model that describes organizations as stages in terms of their diversity, power and hierarchical dynamics, and inclusion. They are monolithic (largely homogeneous with a small number of marginalized groups and exclusive), pluralistic (coexistence of dominant social groups and a moderate number of marginalized social groups in low hierarchical levels), and multicultural stage (highly diverse in all hierarchical levels and inclusive). Our conceptual paper provides a novel theoretical perspective that explains why employees from distinct social groups become embedded in their organizations in a distinct manner. By this, we mean that they develop the three dimensions of OE – fit, links, and sacrifice – in a distinct nature, order, degree, and speed.

In monolithic organizations, employees from dominant groups become enmeshed in the organization and get embedded faster, whereas employees from marginalized groups (e.g., a Hispanic woman) may struggle to develop OE and may develop OE slowly and to a lower degree. In contrast, employees from dominant groups (e.g., white men) develop links, fit, and sacrifice quickly and to a large degree, making them more likely to stay.

In pluralistic organizations, employees from marginalized groups are still less likely to become embedded, but their context is also problematic for employees from dominant groups. A growing presence of employees from marginalized groups and their increasing power and status may threaten employees from dominant groups, harming the speed and overall degree in their embeddedness process. Although employees from dominant groups become enmeshed more, and faster, than those from marginalized social groups, their OE would be lower relative to monolithic organizations. Pluralistic organizations, however, narrow down the OE gap across social groups.

In multicultural organizations, which are diverse and inclusive, employees from all social groups become embedded in more similar ways. OE development is faster and results in greater embeddedness for all groups. Therefore, it is easier for managers to retain and motivate diverse talent in these organizations.

Inclusive leaders should understand the current diversity context of their organizations to stimulate embeddedness, and the retention of diverse talent. In monolithic organizations, the big challenge is retaining employees from marginalized groups, who may feel they do not belong or fit in. In pluralistic organizations, attending to intergroup conflict and diversity backlash from dominant social groups will be a tough task. However, inclusive leaders can focus on leading their organizations to their next stage (monolithic organizations becoming pluralistic ones, and pluralistic becoming multicultural) by capitalizing on employee embeddedness. While it seems that inclusive leaders have it easier in multicultural organizations, they do have the task of maintaining the organization’s inclusive context.

Managerial takeaways

Our theoretical framework will help managers and scholars to understand that the characteristics of inclusive leadership differ across different types of organizational demographic diversity because the nature of intergroup relations and subsequent OE process differ across the diversity types. This implies that leaders interested in retention should understand how employees from distinct social groups develop organizational links, fit, and sacrifice depending on the degree of diversity and inclusion in their organizations. Leaders should pay attention to diversity-related obstacles, intergroup relations problems, and other hurdles to adapt their roles and behaviors to the diversity and needs of their organizations.