Workplaces around the globe are experiencing a cultural shift. Businesses are not just employers, but also leaders in social movements with whom employees want to align themselves. As a result, companies must consider how their values, strategies, and practices sustain an environment that invites employees (and customers!) to be their full selves, no matter how varied their identities may be.
To do this, the first step is to examine a company's diversity, equity, and inclusion (DEI) policies. Before committing to an action plan, teams must understand exactly what the terms diversity, equity, and inclusion each mean, and how they look in action. DEI is not just a task or HR initiative. It’s a process of transforming a corporate culture that requires a long-term integrated approach, and commitment across all departments and decision makers.
Here’s a breakdown of what DEI means in the workplace to help jumpstart DEI initiatives in your organization.
What does an effective DEI change look like?
DEI is often used erroneously as a synonym for the mere presence of marginalized identities within a company. While today’s employees are demanding to see more diversity across departments and leadership levels (48% of Gen Zers identify as BIPOC — and if they're not in the workplace yet, they soon will be), emphasizing diversity, equity, and inclusion requires a more substantial understanding of representation.
KPMG reports that Gen Z and Millennials — the two most prevalent groups in today's workforce — care more about joining organizations with diverse teams.
But it is not enough to simply hire team members of varying backgrounds and identities. Beyond the number of underrepresented hires made, other factors should be considered when measuring the effectiveness of a company’s DEI initiatives. Such key performance indicators (KPIs) include:
The number of diverse employees in leadership positions. While a company may have a large number of employees representing various races, religions, genders, sexual orientations, and other identities, it is important to examine whether that diversity is reflected in the company’s more senior positions.
The retention of underrepresented groups. Onboarding underrepresented hires is certainly an essential part of an effective DEI initiative. However, if these hires are not eager or able to remain on the team, changes may need to be made.
Survey results of employee experience. Do your employees sense their value to the company? Are they proud to be a part of the team? Are they wary about bringing their full selves to work? Do they feel silenced in any way? These are valuable questions to know the answers to when gauging employees’ experience.
Analysis of compensation across demographics. An unflinching look at pay discrepancies across employee demographics may reveal hidden biases within the company.
What is diversity in DEI and why does it matter?
When speaking about cultural diversity within a workplace, many often think (correctly!) of race and gender. However, cultural diversity can include many other differences in identities as well, such as:
Why is it important to welcome these differences in the workplace?
Substantial research demonstrates how the varying perspectives that come with diversity grant teams with more thorough problem-solving, higher levels of productivity and profitability, and better environments for creativity than organizations that are less diverse.
Ultimately, prioritizing DEI is not just a feel-good exercise that boosts public relations. It is also essential to the success of businesses.
Diversity leads to better decision making
Several studies indicate that diverse teams enjoy improved decision making and problem solving. Decisions made and executed by diverse groups delivered 60% better results, according to Forbes.
Diversity leads to better financials
Ample research suggests that diverse teams experience greater financial outcomes, too. A McKinsey report concluded that "the relationship between diversity on executive teams and the likelihood of financial outperformance has strengthened over time," most recently with 36% of those diverse teams enjoying above-average profits.
Diversity leads to better innovation
A study by the Boston Consulting Group summarized in the Harvard Business Review found "that companies with above-average total diversity had both 19% higher innovation revenues and 9% higher earnings before income and taxes margins, on average. The presence of enabling conditions for diversity — such as fair employment practices, participative leadership, top management support, and open communications — is worth up to 12.9% in innovation revenue."
What is equity in DEI and why does it matter?
Without equity, diversity offers a company little more than an image boost.
Equity is the fair treatment, opportunity, access, and advancement for everyone in the company. It removes bias and makes opportunities available for all. And unlike equality — which ensures that everyone is given the same resources — equity understands how certain identities and communities are confronted with more obstacles and institutional challenges than others, and offers tools and treatments in consideration of those injustices.
Artist Angus Maguire created the following graphic for Interaction Institute for Social Change to visually explain the difference between the equality and equity.
Understanding the context of each employee’s needs helps lead to equity in the workplace.
The federal government suggests the following roadmap to help achieve equity in the workplace:
Reviewing policies and procedures (e.g., assessment tests, vacancy announcements, eligibility criteria, suitability requirements, etc.) to identify and address potential barriers to full participation in the workplace
Regularly conducting pay equity audits to assess whether similarly situated individuals are equitably compensated for similar work
Establishing policies that do not rely solely on prior salary history to set pay and establishing a process to communicate salary bands for job applicants
Seeking opportunities to promote paid internships, fellowships, and apprenticeships
Evaluating leadership and career development programs to increase access to opportunities, including for members of underserved communities
Adopting an approach that maps and assesses the employee experience (i.e., employee journey mapping), as opposed to reviewing data and feedback from a singular time period or experience
Providing employees and their eligible dependents, including LGBTQI+ employees, with equitable access to support services.
It is important to invest in equity, not only because it is an immediate and direct response to long-standing inequalities that exist as a result of discrimination, but also because it’s good for business. A report from Harvard Business Review found that when employees perceive they are being treated with equity, performance improves by 26% and retention improves by 27%.
What is inclusion in DEI and why does it matter?
Without inclusion, efforts to promote diversity and equity may create divisions within a team.
An inclusive culture at work promotes a sense of belonging, of being accepted and needed, and of having one's ideas valued. By prioritizing inclusion, alongside diversity and equity, companies ensure a safe, welcoming place for their employees to thrive. Inclusion is the reflection of a company's valuation of employees as individuals and community members. By being inclusive, a company declares their support for every employee.
Inclusion is an essential key to employee retention. As noted in research by Deloitte that discovered businesses with inclusive cultures had lower turnover rates and higher recruiting success than companies without inclusivity.
In fact, Harvard Business Review reports that when employees feel a strong sense of inclusion, there is a 75% reduction in sick days and 56% increase in job performance.
How do you make a workplace more inclusive? A truly inclusive workplace features leaders who treat their team members impartially and advocate for them. The leaders also make it apparent that they support all DEI organizational systems and practices, including:
Minimizing bias. Companies should be aware of the overt and unconscious biases that can permeate their culture. And they should work to address these biases across departments and within existing processes.
Encouraging employees to be their authentic selves. Mentor team members on how to create a safe space for others to be their authentic selves, while providing opportunities for everyone to celebrate the communities and causes they care about.
Providing opportunities to connect with others. Leverage company events, employee resource groups (ERGs), and corporate social responsibility (CSR) activities to invite employees to interact with others as their authentic selves. By setting the tone through these group interactions, companies will create a day-to-day culture that is welcoming to all.
How to implement workplace DEI programs
Although the implementation of cultural diversity, equity, and inclusion in the workplace isn't the sole province of HR, human resources plays an important role in developing policies, planning strategies, and educating leaders.
Efforts to increase diversity alone are not enough. According to Brian Kropp, chief of research for Gartner HR, a human resources data and insights organization, creating a fairer employee experience should be a top priority for companies of all ilk. “To do this, organizations need to go beyond policies and develop philosophies,” he says.
You can have a culturally diversified employee base, but if you don't have basic policies and ongoing DEI programs established to support them, you'll increase turnover, decrease motivation, and hinder the success of your business.
Reach out to the Visit.org team to learn how our social impact experiences can scale your workplace DEI initiatives.