Impact of Workforce Diversity on Employee Retention and Engagement

Mediating Role of Organizational Climate

Bibliographic Data

ID22006803
AuthorsIndradevi Ramasamy (0000-0001-6241-7416, Vellore Institute of Technology University, corresponding author), Sathya Natarajan (Vellore Institute of Technology University), Arun Mittal (0000-0003-0602-8066, Birla Institute of Technology, Mesra)
Year2025
Volume15
Issue4
Publication date2025-10-01
Open AccessYes
TypeARTICLE
VenueSAGE Open (JOURNAL)
Journal identifiersISSN: 2158-2440 • E-ISSN: 2158-2440
PublisherSAGE Publications (PUBLISHER • US)
DOI10.1177/21582440251383043
OpenAlexW4416135138
LanguageEN
Citations received1
References cited71

This study has made an attempt to expand on existing research on workforce diversity by analyzing its effects on employee engagement (EE) and employee retention (ER). It also aims to understand the relationship between job satisfaction and employee performance. The study specifically examines the influence of organizational climate (OC) on the specific outcome. Data was collected from 422 experts working in the IT and ITeS industry. A multi-phase analytical methodology was employed. The variables of workforce diversity were initially discovered using exploratory factor analysis (EFA), which generated five important factors: the benefits of a diverse workforce (BDW), recruitment and selection (RS), orientation, training and development (OTD), and conflict management (CM). To validate the generated factors confirmatory factor analysis (CFA) was used, and structural equation modelling (SEM) was used to evaluate the impact of the identified variables with EE and ER. The results show that RS, OTD, CM, and BDW when considering the importance of diversity, significantly affect the EE and ER. Additionally, the pathways connecting OTD and CM with EE and BDW, OTD, and CM with ER were found to be significantly mediated by OC. This study contributes to both theory and practice by signifying that workforce diversity has an impact that goes beyond traditional indicators of job satisfaction. Inclusive hiring, well-structured training programs, resolving disputes positively, and encouraging more diversity policies can all work together to enhance employee engagement and retention and build a long-lasting workplaces in the IT and ITeS industry. The studies may be expanded in the future by looking at the interaction effects of diversity dimensions, by adding more mediators like knowledge management, and using cutting-edge analytical techniques like artificial neural networks (ANNs). It is also recommend to apply random sampling more widely to improve generalizability across organizational contexts and industries

Employee engagement · Employee retention · Exploratory factor analysis · Job satisfaction · Organisation climate · Structural equation modeling · Workforce · Workforce diversity · AI and HR Technologies · Employer Branding and e-HRM · Gender Diversity and Inequality

Tools

Open DOIOpen Access