1. Introduction
Presently, with the world change, the rise of globalization, technology development, and migration movements, the work environment has become progressively diversified and mixed [
1]. These facts were the main reasons for many changes within the business sector where women, disabled people, and individuals who have different demographic and socio-cultural characteristics were mostly affected [
2]. At the beginning of the 1990s, several managers started to encounter the new tendency of diversity at the workplace, which was raised by the implementation of liberalization, privatization, and globalization policies [
3]. At that time, the topic started to have a huge consideration from researchers’ perspective, where some scholars have mentioned that sooner or later companies’ structures might reach 90% of women and many of them would be migrants. Without forgetting the racial groups that will present the largest part of the companies’ businesses [
4,
5]. According to them, the organizations that will appreciate these changes will be more competitive in the markets and will respond to a vast variety of approaches to managing their diversified workforce [
3].
It was also highly mentioned that diversity management is increasingly important in ensuring the human resource management sustainability, where [
6] confirmed that organizations who guard their diversified workforce by planning a long term diversity management strategies and include them in the companies’ human resource management activities such as recruitment, payroll, mobility, promotion etc., who ensure structured employees’ evaluations and who have the right managers with international and multicultural experiences, flexible and global mindsets, and strong diversified technical and strategical skills are those who succeed in introducing supportive programs for sustainability and a skilled, powerful, and solid work environment. In addition, they reported that diversity implementation with its full requirements incarnated into the firms’ everyday life can ensure the companies’ sustainable prosperity in a very globalized world.
From the Hungarian outlook, researchers pointed out that some of the Hungarian employers started to deliver greater importance to promote diversity in the workplace, by considering the diversity management not only from recruiting diversified employees’ but also from ensuring them the feeling of organizational involvement and equity in the management policies [
7], other Hungarian employers still refuse to address this issue because of the lack of trust [
8]. To conclude, one of the best ways to keep the highest competitiveness is then to admit that today’s liveware is progressively mixed and diverse. That is why huge efforts in promoting policies and practices are needed to ensure individuals’ inclusion from all backgrounds and push them to reach some positive outcomes such as profitability, creativity, flexibility, organizational growth, organizational trust, and employee engagement [
9]. These positive outcomes also need some other fundamental measures and changes in the organizational structure such as human resource policies, operational procedures, style of leadership, and well-structured organizational culture [
3].
Earlier, from a theoretical stance, the institutional theory was basically used to state that diversity management is about the rules and norms settled by the company to influence the employees’ behaviors [
10]. In the same line, some other studies have mentioned that corporate ethics enhancing peoples’ sense of respect towards each other ensures organizational commitment [
11,
12]. In addition, social exchange theory shaped that exchange is the best way to show appropriate behaviors valuable to their organization [
13]. Hence, our study will focus on exploring this effect in the Hungarian context, as in some of the local companies the concept of diversity acceptance is still frozen out. We would like to see how the actual changes (migrants’ movement, technology development, openness) impacted the diversified Hungarian work environment and how Hungarian managers in service companies started to deal with this issue to ensure their employees’ engagement. According to Guadagno [
14], the foreigner employees’ segment was the most vulnerable and intensely affected during crisis time (COVID-19 pandemic for instance) due to different reasons, such as the difficult living circumstances, different working conditions, inadequate health services, limited local knowledge, and shortage of government foreigners’ support, etc. These facts have pushed us to focus on this type of employees, in order to understand the effectiveness of diversity management policies implementation in boosting their engagement at work.
Correspondingly, Karatepe has mentioned in his study, that employees retain a lower work engagement, in an environment full of job loss fear and lack of great management. Contrarily, employees who are full of energetic and enthusiastic feelings towards their job are usually up to show greater attitudinal and behavioral outcomes [
15]. Consequently, these studies have reported that job insecurity, which is considered as a sensation felt by employees when there is a risk of job loss [
16], is the reason for lack of engagement and engenders detrimental outcomes such as nonattendance behaviors and counterproductive work behaviors [
17]. Because of the lack of studies dealing with this issue, our study will try to investigate on reporting the mediation effect of job insecurity in the relationship between diversity management and employee engagement.
Even though employee engagement was linked to many job outcomes as we mentioned before, there are few studies that point to the antecedents of engagement such as leadership and trust [
18]. That is why understanding the role of trust is a key point to generate positive job attitudes. From this standpoint, Ugwu et al. [
18] confirmed that trust is a key factor for any organization to ensure their employees’ wellbeing because trust maintains social exchange and ensures positive job attitudes such as being more engaged at work. Hence, the current study will try to explore the mediation role of organizational trust in the relationship between diversity management and employees’ engagement. In addition, the researchers truly consider the current study as an important contribution, bringing an additional value to the literature, as no earlier studies were conducted in Hungary linking diversity management, organizational trust, job insecurity, and employee engagement variables all together.
For the results’ examination, the researchers opted for a quantitative study using a questionnaire as a data collection tool sent to 580 respondents from Marketing, Management consulting, IT, and logistics at local Hungarian service companies. The findings show how important it is for Hungarian managers to ensure a well-structured diversity management strategy in promoting their employees’ work engagement and avoiding sensations of job insecurity. It also shows how trust in the organization could be a significant factor to boost that engagement.
This paper is then structured as follows, it firstly starts with a literature review containing all concepts, definitions, and links between the model variables from which the researchers concluded our hypothesis. Then, the methodology part took place followed by the results, discussion of the data analysis, and as a conclusion, the researchers have tried to summarize all the theoretical and practical contributions and, finally, state the limitations and suggestions for future research.
5. Discussion
This study aimed at investigating the influence of diversity management on employees’ engagement and determine the role of organizational trust and job insecurity in that relationship. To do so, the study used quantitative methods to test the results, and the data was analyzed by using SEM procedures. The results confirmed the initial hypothesis that was suggested by the current research.
First, the results indicated that diversity management boosts employees’ engagement. The direct relationship between the two variables is considered as a very important job outcome for any organization [
98] and is in line with social exchange theory (SET). This explains that when employees perceive diversity management practices from their organizations, they manifest different positive attitudes and behaviors such as organizational commitment [
99] and organizational citizenship behaviors [
100]. In the context of employees’ engagement, SET also suggests that when employees perceive the practices of the management positively, they tend to be more motivated and engaged at their workplace as an exchange toward the positively perceived practices [
29]. Therefore, our results can be explained under the context of SET, where diversity management practices are perceived as a positive intention from the organization towards its employees who, in turn, exchange it with more engagement and more enthusiasm.
The direct effect of diversity management on employees’ engagement in our study was at a moderate level, which comes in line with different previous studies that were taken place in different market segments (e.g., [
9,
38,
39]), which assure the importance of diversity management as a prime factor in creating engaged employees that are full of motivation and enthusiasm toward their work. Especially in the current time where the pandemic’s results are still affecting the organizations and the employees where job insecurities are increasing because of the instability in work conditions especially among the foreign employees who are considered the most vulnerable segment of the employees [
14]. This result comes to support the results in a previous study that indicated the role of perceived organizational support on enhancing employees’ engagement in the context of SET. Indicating the importance of the organization’s management in providing support to the employees to make them more engaged at work [
38] and since diversity management is important to show how the organization support the employees and care about them [
33] from these aspects it can be concluded that the role of diversity management is fundamental in achieving engaged employees at work. The indirect relationship between diversity management and employees’ engagement was tested by using two different variables: organizational trust and job insecurity.
The results showed that diversity management has a direct negative impact on job insecurity indicating the role of diversity management in decreasing job insecurity between the employees and these results are in line with [
68]. In addition, the results are similar to those presented by [
69], who found that the absence of clear diversity management practices and policies has a significant impact on increasing job security. Although the impact of diversity management in decreasing job insecurity was relatively at a low level, it was significantly affecting the feelings of job insecurity among the foreign employees in Hungary, indicating the theory of motivation [
58], which indicates that when employees perceive diversity management practices positively, they will be more motivated at work and hence their levels of job insecurity will decrease.
On the other hand, the results also show that there is a direct relationship between diversity management and organizational trust, indicating that diversity management enhances trust in organization. Our results are consistent with previous studies that shed light on the relationship between diversity management and organizational trust such as [
10], who explained that diversity management practices can increase the perceived fairness among the employees which is translated into organizational trust.
According to Shen et al. [
101], organizational trust is influenced directly by the organizational policies and practices that are performed by HR management, and since diversity management is considered as an important part of the policies and practices of HR management [
102]. Our findings are consistent with these results, indicating on the role of diversity management in predicting organizational trust.
The results also revealed that organizational trust is an important predictor of employees’ engagement. This implies that the more trust in an organization is perceived by the employees, the more they are engaged at work. It is clearly in accordance with SET, which emphasizes that when employees perceive trust in their organization and management, they exchange it with better work outcomes in order to fulfill their responsibilities at work [
103]. The current results are in line with different studies that indicated on the importance of organizational trust in achieving better-engaged employees [
18,
104]. These results are consistent with different recent studies that tried to connect organizational trust with different work outcomes [
105,
106,
107,
108].
The results related to the impact of job insecurity on employees’ engagement showed that job insecurity negatively affected the employees’ engagement however this impact was relatively low. Indicating the importance that having employees with job insecurity can negatively affect their engagement at work these results are in line with [
70,
74]. Yu et al. [
109] explained that when employees perceive job insecurity, they tend to develop negative emotions which in the trust will decrease the levels of work engagement. The current result is inconsistent with different studies that linked having job insecurity with negative work outcomes [
17,
110].
The results also showed that organizational trust positively mediated the relationship between diversity management and employees’ engagement, indicating the positive role of trust as a mediator. This result is in line with [
9], who indicated the effectiveness as a mediator between diversity management and employees’ engagement. This result also indicated the importance of organizational trust as a mediator between diversity management and different work outcomes [
38,
56,
101].
On the other hand, job insecurity was negatively mediating the relationship between diversity management and employees’ engagement, indicating that job insecurity could negatively reduce the effect of diversity management on employees’ engagement. However, this effect is not strong, which indicates that diversity management is an effective tool in decreasing job insecurity among the foreign employees in Hungary in times of uncertainty as the pandemic is still hitting. This result is in line with De Beer et al. [
77], who mentioned that the HR policies and practices related to diversity and discrimination could decrease the levels of job insecurity among the American employees and it reflected directly towards their engagement at work.
6. Conclusions
In our research, we were able to propound several theoretical and managerial implications. With applying the study in the Hungarian context, we managed to go through the up to date conceptualization of diversity management and cover the theoretical and empirical gaps of the forgoing literature that was linking employees’ engagement to job satisfaction, organizational commitment, and leadership styles [
36] and where earlier scholars, despite of the world change and the increase in migration movements, missed out to highlight the importance of diversity management, which is currently absent in most Hungarian companies and in some of the Hungarian managers’ culture. Therefore, with the press on social exchange theory [
26], we were first successfully capable of approving and confirming the significant impact of diversity management, not only on employees’ motivation and satisfaction but also on their engagement. Second, we demonstrated that organizational trust could be considered as a mediating variable between diversity management and employee engagement, as diversity management is the best practice to ensure fairness, respect, and appreciation, which can also contribute to increasing the level of organizational trust, which is examined afterward as an important factor to make the employees concentrate on their work, feel concerned about the whole company’s issues, and feel motivated and highly engaged. In addition to these two theoretical implications, we were also able to highlight and confirm the negative significant effect of job insecurity and its mediating role between diversity management and employees’ engagement. With the help of cognitive appraisal theory [
111], we managed to approve that the absence of diversity management could lead to higher levels of job insecurity, job injustice, and less fair payment, which in turn negatively affects the employees’ organizational citizenship behaviors and their engagement toward their jobs and roles.
In addition to the previously mentioned theoretical contributions, managerial implications were also reachable and are very important to highlight. First, it seems conspicuous that managing diversity in the workplace is of an increasingly significant concern nowadays, and it has widely been mentioned from business perspectives that most employers should hugely consider it in their corporate culture. However, this is less common for Hungarian employers, which is why our study opens a good development area for this issue. We suggest to these managers who are working for service companies to increase their general awareness around workplace diversity by fostering diversity during the recruitment process by hiring people from different backgrounds, ages, gender, and cultures, etc., and boost their employment relationships thereafter. In addition, internal policies should be implemented aiming at minimizing violation and ensuring equal treatment principles. We think that providing proper training around conflict management, teamwork, and cooperation is critical to involving and flourishing a diverse workplace. Second, we pointed out how organizational trust could be important to deal with the diversity in Hungarian service companies and how it could affect the employees’ engagement. It is absolutely, important to know that implementing trust within the organization is not only the managers’ responsibility but also the employees’ responsibility. That is why they should always try to be aware of their changing needs, take care of their own growth, and always try to transfer that to their managers to build a certain trust level and boost their satisfaction, motivation, commitment towards their jobs, and, of course, their engagement. Furthermore, implementing well-structured diversity management strategies is a significant tool to raise trust between the different organizations’ parties that helps in increasing knowledge exchange and positively impacts employees’ engagement. Finally, our study was also engaged in opening another area related to job insecurities. It has been proven that in Hungary, women and foreigners are those who are really facing the most shocking forms of direct and indirect discrimination in the workplace. This fact has generated high levels of job insecurities leading to these workers’ engagement decrease. Consequently, our study is considered as a pillar encouraging companies to favorize diversity management policies implementation to avoid any feeling of job insecurities, inequalities, discrimination, or violation, so that they can be able to provide a great work atmosphere and conditions for better performance and higher engagements.
Despite, the great contributions provided by our research, we were not able to escape some of the limitations that took place. First, as we adopted a causal relationship statistic method, we had to face the risk of bias, which was hard to remove, despite the huge effort made in ensuring a complete approximation of collinearity and an absolute validation of the variables’ connections mentioned in the literature review. To skip this problem, we suggest future studies to adopt longitudinal research in order to investigate the links between the variables and provide well-grounded and solid results. Second, choosing only the Hungarian context to confirm our hypothesis especially from Hungarian managers’ perspective who are working for Hungarian service companies, was a reason for reducing the generalizability of the paper. Consequently, future examinations are advised to go through a probabilistic sampling method and generalize the study model in other countries and in other situational or environmental contexts such as crisis times, where we can have a concrete example the COVID-19 pandemic time and see the changes that may occur in the model. Third, it is highly recommended to use our research model and add some other moderating and mediating variables to see to what extent these variables could affect the relationship between diversity management and employees’ engagement. As an example, future studies could abord these variables as an example: knowledge sharing, communication, and leadership styles, etc. Finally, we also suggest to other researchers to conduct a qualitative study to confirm our results.