Why Inclusive leadership matters more than ever: Insights from DCA’s Inclusion@Work Index 2025–2026

In a time of rising complexity, polarisation, and rapid technological change – with AI reshaping how we work – the role of leaders in creating safe, equitable, high‑performing workplaces has never been more important.

DCA’s latest Inclusion@Work Index 2025–2026  shows encouraging progress: workers reporting being in inclusive teams has risen from 46% in 2023 to 56% in 2025, and those reporting an inclusive organisational climate increased from 52% in 2023 to 59% in 2026.

Yet one result remains stubbornly unchanged: only 1 in 3 Australian workers say their manager is inclusive, a figure that has hardly moved since 2019.

The evidence is clear: if organisations want innovative, productive, safe workplaces, they must invest in building inclusive leadership capability now.

What is an inclusive manager?

So, what do we mean by inclusive leadership? DCA defines an inclusive manager as one who:

• Value differences and see diversity as an asset.
• Treat everyone equitably, with fairness guiding decisions.
• Seek out and use diverse ideas, ensuring all voices inform decisions.
• Address inappropriate behaviour, setting clear expectations for respect and safety.

In other words, inclusive leaders don’t simply “support diversity”, they actively shape the conditions that enable people to thrive.

Why inclusive leadership matters: What the data shows

Inclusive managers matter because they create teams where people feel respected, connected, able to contribute, and able to progress. These are conditions that the Inclusion@Work Index has consistently shown are essential for an inclusive workplace.

Workers with inclusive managers are:

• 7 times more likely to be satisfied with their jobs
• 5 times more likely to feel work has a positive impact on their mental health
• 5 times less likely to leave their organisation
• 5 times more likely to work effectively together
• 7 times more likely to be innovative
• 3 times less likely to provide excellent customer service

Inclusive managers create psychological safety, encourage diverse thinking, and remove barriers to contribution. This builds teams that problem-solve faster, collaborate better, and deliver stronger results. Inclusive managers are therefore a key driver of organisational success.

Without inclusive managers, exclusion persists…

Despite progress, exclusion remains a significant issue.  Our 2025 Index data highlights that in 2025, 24% of workers reported experiencing discrimination and/or harassment at work.  This increased with workers from marginalised backgrounds. First Nations workers (47%), workers with disability (47%), and LGBTIQ+ workers (46%) reported much higher levels of discrimination or harassment, as well as higher levels of everyday exclusion.

This tells a clear story: inclusion isn’t merely a cultural aspiration – it manages organisation risk, fosters psychological safety and encourages productivity. When managers do not model inclusive behaviour, exclusion grows, trust erodes, and the risk of harm increases.

Why leaders must prioritise inclusion now

Workplaces are shifting dramatically, and expectations are rising. Against the backdrop of social division, economic pressure, and AI-driven disruption, employees increasingly look to leaders for cues about fairness, respect, and safety.

Support for D&I remains strong – 76% of workers supporting organisational action, and only 5% of workers oppose their organisations taking action on D&I.

But support also depends heavily on what workers experience at work. Workers with inclusive managers are far more likely to support D&I efforts, while those with non-inclusive managers are more likely to resist or oppose them. This means leaders are the anchor of D&I credibility. Their behaviour determines whether inclusion efforts succeed or stall.

The problem: managers aren’t yet equipped

While inclusive teams and organisations are rising, inclusive management capability has barely moved since 2019, pointing to a capability gap. Many leaders want to be inclusive but lack:

• practical tools
• confidence navigating identity and difference
• skills to address bias, exclusion, or inappropriate behaviour
• time and support to embed inclusive habits

With intentional investment, organisations can equip leaders to create high-performing, equitable workplaces.

How can you become an inclusive manager?

Build your D&I literacy: Understanding your own identity, privilege, and lived experiences is fundamental to effectively engaging with the perspectives of others.

Set the tone for inclusion by role modelling inclusive behaviours, including actively seeking diverse perspectives, listening with curiosity, and ensuring everyone feels valued and safe to contribute. Through transparent communication, demonstrating accountability and consistent fairness, they set the tone for an environment where inclusion is the norm, not the exception.

Ask your team for practical suggestions for making the team’s work, processes, and culture more inclusive.

Be open to different perspectives: reflect on whose opinion you ask for most and reach out for alternative viewpoints

Use DCA resources to build your inclusive leadership capabilities, including:

• Building Inclusion – An Evidence-Based Model of Inclusive Leadership
• Inclusive Teams Toolkit (see Lever 8: Inclusive leadership)
• What Can Leaders Do to Create Class Inclusion? (PDF 342 KB)
• Inclusive Recruitment Quiz for hiring managers
• Cracking the Glass-Cultural Ceiling: Guidelines for Leaders (PDF 601KB)

Book your leaders for our Inclusive Leadership Fundamentals knowledge program. 

The bottom line

DCA’s Inclusion@Work Index 2025–2026 provides compelling evidence that when managers practise inclusion, teams innovate more, collaborate better, and deliver stronger outcomes. Exclusion, whether subtle or overt, harms wellbeing, increases turnover, and undermines organisational culture.

As workplaces navigate economic uncertainty, technological disruption, and societal division, inclusive leadership isn’t just beneficial – it’s essential.