From Diversity to Engagement: The Mediating Role of Job Satisfaction in the Link Between Diversity Climate and Organizational Withdrawal

Marked by a highly diverse workforce, the Indian construction industry faces ongoing challenges in fostering employee engagement and minimizing organizational withdrawal. This study examines the role of diversity climate in influencing psychological and physical withdrawal behaviors among construction professionals, assessing job satisfaction as a mediating variable. Grounded in Social Exchange Theory, the research employed a quantitative survey approach, gathering responses from 318 professionals across the sector. Partial least squares structural equation modeling (PLS-SEM) was used to test the hypothesized relationships. Results indicate that reduced psychological (β = –0.462, f2 = 0.465, p < 0.01) and physical withdrawal (β = –0.311, f2 = 0.194, p < 0.05) are associated with more positive perceptions of the diversity climate. Furthermore, this relationship is partially mediated by job satisfaction, with diversity climate positively influencing job satisfaction (β = 0.618, p < 0.001), which in turn reduces withdrawal tendencies (indirect effect on psychological withdrawal β = −0.094, p < 0.01 and physical withdrawal β = −0.068, p < 0.01). These results show that encouraging a supportive diversity climate not only helps but is also absolutely necessary for enhancing job satisfaction, lowering withdrawal behavior, and retaining trained talent. The findings offer concrete evidence that construction firms and policymakers should prioritize inclusive human resource strategies that directly improve project outcomes, reduce attrition, and enhance workforce engagement in the Indian construction sector.