As demographic and generational changes transform the workplace with a younger and more diverse workforce, diversity, equity and inclusion (DE&I) initiatives are both desired by employees and recognized by organizations as vital components of a thriving, innovative and sustainable company culture.
In this article, we will take a close look at the objectives of diversity, equity and inclusion initiatives, the evidence for whether they produce tangible benefits and some of the practical strategies being used by industry leaders to foster a more diverse, equitable and inclusive workplace.
What is diversity, equity and inclusion (DE&I)?
Although all three are closely related, diversity, equity and inclusion are discrete values that may or may not be present in the workplace culture of an organization, although diversity, equity, inclusion and belonging (DEIB) has continued to evolve in 2023.
- Diversity refers to who’s represented in the workforce. Diversity and inclusion initiatives seek to achieve a workforce with varied perspectives through practices that encourage diversity of gender, age, ethnicity, religion, national origin, sexual orientation and physical ability.
- Equity refers to the development of workplace policies and practices that ensure all workers are treated fairly and that identities are not predictive of outcomes. Equity is not the same thing as equality. Equality means treating all employees the same, while equity considers the individual circumstances of underrepresented groups and seeks to achieve balanced outcomes.
- Inclusion refers to the subjective experience of a worker, namely the degree to which the organization reaches out to an employee and empowers him or her to take an active role on the team. Every employee lives a multi-dimensional life that includes work, love, friendship, family and community. Inclusive workplaces are those in which all employees feel seen, heard and able to express themselves.
When an organization seeks to provide a more supportive atmosphere for individuals of different races, genders, religions, abilities or sexual orientations, diversity and inclusion initiatives have a strong track record of strengthening organizations through enhanced employee engagement, retention, innovation and performance – all of which translates into a stronger bottom line.
How does DE&I make a company stronger?
A study by the McKinsey consulting group showed that companies with highly developed diversity and inclusion programs were 25 percent more likely to have above-average profitability. Conversely, companies with the lowest level of investment in DE&I were less likely to achieve strong financial results. And, this study also found a solid linear relationship between diverse talent and financial performance. For every 10 percent increase in racial and ethnic diversity on the management team, there was an increase of 0.8 percent in earnings before interest and taxes (EBIT).
Organizations that are diverse, equitable and inclusive benefit from having many points of view. They are more flexible in responding to customer needs, more resilient in responding to challenges and more attractive to the youngest generations of talent.
In a recent LinkedIn study, 60 percent of respondents said that efforts to improve diversity within their sales team had contributed to team success. The same study showed that inclusive teams are up to 35 percent more productive, and more diverse companies earn 2.5 times higher cash flow per employee.
More Benefits from Diversity and Inclusion
Beyond the financial results, a commitment to invest in diversity and inclusion can yield benefits in other areas of performance, including employee engagement, customer insight, executive decision-making, talent acquisition, product and service innovation and brand reputation.
When employees feel valued and included, they are more likely to be engaged and motivated to contribute their best work. Employee engagement results in higher job satisfaction, increased productivity and reduced turnover rates.
Multiple workplace surveys show that most employees regard diversity and inclusion initiatives as important. By demonstrating the company’s genuine desire to be more diverse, equitable and inclusive, workers respond with more engagement, motivation and job satisfaction.
A sales, marketing or engineering team with diverse backgrounds is better equipped to anticipate new trends, identify shifting preferences and develop innovative solutions based on a broader range of potential customer perspectives.
Diverse teams engage in more thorough discussions and consider a wider array of perspectives before making decisions. This leads to well-rounded choices that consider a variety of potential outcomes.
When an organization’s leadership team is challenged to respond to a crisis, manage dynamic change or choose a path based on vision and elevated problem-solving, diversity in the leadership team provides multiple perspectives, allowing them to examine old problems in new ways and foster innovative solutions.
Inclusive organizations with diverse talent pipelines attract top-tier people. Employees are more likely to stay with a company that values their unique contributions and offers opportunities for career growth.
A LinkedIn survey found that 76 percent of employees and job seekers said diversity was important when considering job offers. Sixty percent wanted to hear business leaders speak up on diversity issues, and 80 percent said they wanted to work for a company that values diversity and inclusion initiatives.
Product and Service Innovation
A diverse workforce brings together individuals with different experiences and backgrounds, fostering a rich exchange of ideas. This diversity of thought leads to innovative solutions and products that cater to a broader range of customers. An individual with a unique background can often see things in a unique way. A Bloomberg study reported that foreign-born inventors are responsible for 36 percent of U.S. innovations, including patents and startups. Adding diversity helps teams see problems from a fresh perspective.
In today’s global marketplace, most potential customers and employees regard efforts to be diverse, equitable and inclusive as strongly positive qualities, with which they prefer to be associated when they choose a product or an employer. While studies show that many organizations are struggling to achieve DE&I results that match their aspirations, potential customers and employees are ready to reward the effort with brand preference and loyalty.
How to Develop Strategic DE&I Objectives
In order to successfully establish a diverse, equitable and inclusive workplace, the work of building a culture based on diversity and inclusion must proceed from a strategic foundation that rests on core company values.
Below are some examples of how an organization can go from vision to business strategy to practical diversity and inclusion objectives.
Embrace a Foundational DE&I Vision
An effective strategy requires a vision to set a direction, drive a sense of purpose and identify goals. Depending on the organization, a foundational DE&I vision might include an inclusive workplace culture that values and recognizes the unique identities and perspectives of every employee, which contribute to the company’s mission and culture. The vision might also include a workplace environment that provides every employee with equitable access to opportunities for personal growth and career development.
Clarify the Strategic DE&I Goals
Again, the nature of the organization and the workforce will define the specific goals. However, here are several examples of strategic DE&I goals:
- Invest in a DE&I leadership role, such as chief diversity officer
- Embed the DE&I objectives within all departments
- Develop tactics for building inclusion efforts into the company culture
- Build diversity and inclusion into all talent acquisition processes
- Develop systems to gather, analyze and report on DE&I efforts
- Prepare team leaders to be accountable for achieving DE&I goals
- Identify team leaders who are good candidates for mentorship
- Train all employees on diversity initiatives and inclusive language
- Reinforce DE&I awareness throughout the organizational culture
- Define objectives and establish metrics to track progress
- Schedule quarterly reviews to refine DE&I efforts and objectives
Tactics for Achieving a Diverse, Equitable and Inclusive Culture
Below are some of the most effective tactics for generating DE&I programs, gaining commitment to DE&I objectives and achieving a more diverse, equitable and inclusive culture.
Get Leadership Commitment
Diversity and inclusion initiatives must start from the top. Leadership commitment sets the tone for the entire organization. Executives should openly endorse DE&I goals, allocate resources to and actively participate in DE&I-related activities.
Train for DE&I Awareness
Offering diversity training to all employees can help raise awareness and foster understanding of different perspectives. This training should cover topics like unconscious bias in the hiring process, microaggressions, inclusive language and cultural competency.
Require Inclusive Hiring Practices
Implement blind recruitment processes to eliminate unconscious bias during the initial stages of the hiring process. Create diverse interview panels to ensure the balanced evaluation of candidates. Train team leaders to recognize and avoid biased policies and practices.
Establish Employee Resource Groups
Employee Resource Groups (ERGs) provide a platform for employees with shared backgrounds or experiences to connect, build relationships and share insights. ERGs can also contribute to a sense of belonging and offer a channel for feedback to inform DE&I strategies.
Develop Equitable Policies
Regularly review and update company policies and the employee handbook to ensure they are unbiased and promote inclusivity. This includes policies related to pay equity, promotions and flexible work arrangements. Underrepresented groups generally refer to those who have in the past been culturally or institutionally disadvantaged in the workplace, such as people of color, women, indigenous peoples and more.
Equity should also focus on economic origins. For example, even an intern program may be biased toward candidates who are economically advantaged enough to take a job that often pays nothing. Equitable policies consider these factors when job openings and promotions are made available.
Establish Mentorship and Sponsorship Programs
Establish formal programs that pair employees from underrepresented groups with more experienced colleagues. Sponsorship programs can go a step further, actively advocating for employees’ advancement within the organization and helping sponsored candidates answer skill gaps with special training.
Design an Accessible Work Environment
Make sure that physical and digital workspaces are accessible to employees with disabilities. This includes providing appropriate accommodations and ensuring that in-person conferences, online meetings and digital content are all designed with accessibility in mind.
Seek Regular Employee Feedback
Create mechanisms for employees to provide feedback, including anonymous feedback if they wish. Acknowledge and act on this valuable input and communicate the actions taken to demonstrate the organization’s commitment to listening, understanding and improvement.
Track and Report DE&I Performance
Set measurable goals for DE&I progress and hold team leaders accountable for meeting these goals. Regularly track and report on diversity and inclusion metrics to ensure transparency and progress.
Extend Sourcing to Diverse Suppliers
Partnering with diverse suppliers can extend a company’s diverse talent pool beyond the organization. Partnerships such as these can contribute to a more inclusive environment and showcase an organization’s commitment to supporting businesses from various backgrounds.
Diversity, equity and inclusion is an ongoing journey. Stay up-to-date on the latest research, trends and best practices in the field to modify your policies and refine your strategies over time.
Challenges to Diversity, Equity and Inclusion
Implementing effective DE&I strategies comes with a unique set of challenges. Resistance to change, lack of leadership buy-in, unconscious bias, lack of resources and fear of making mistakes are some of the most common obstacles. Below are some effective strategies for answering those challenges.
Lack of Leadership Buy-In
When the executive team is reluctant to commit or regards diversity and inclusion initiatives as a form of public relations, the solution is to engage skeptical leaders through data-driven discussions on the hard-nosed business benefits of DE&I. Human resource leaders can demonstrate the alignment of DE&I improvement strategy with the company’s mission, values and long-term goals.
Training must be engaging and repetitive to be effective. Find examples of unconscious bias. Teach the use of inclusive language. Demonstrate the human and business value of diversity in teamwork, problem-solving, decision-making and other business skills that are universally understood.
Reluctant Resource Allocation
Highlight the return on investment of diversity and inclusion efforts. Show the positive impact on productivity, retention, innovation, employee engagement and other metrics that impact financial performance. Show what best practices will cost the company, and weigh this cost against potential gains.
Fear of Failure
Develop a culture that learns from mistakes and does not punish failure. Acknowledge that diversity and inclusion initiatives are a challenging learning process. Emphasize the organization’s commitment to continuous improvement. Keeping a culture of continuous learning can help reduce reluctance from employees to engage with the company’s DE&I efforts.
Leading from the Front
Workplace diversity, equity and inclusion are not just abstract concepts, and they are not just buzzwords designed to let an organization polish its brand image. They are foundational elements of a thriving workplace culture, as well as drivers of team spirit, innovation, engagement and sustainable success.
By embracing the principles of DE&I, organizations can create an environment in which every employee feels valued and empowered to contribute his or her best. The strategies outlined in this article provide a road map for achieving these goals.
Great companies are among the most powerful engines of improvement in our culture. Those that prioritize and invest in diversity and inclusion will lead from the front, both in financial performance and as examples of what any workplace can achieve.