Get expert advice on every topic you need as a small business owner, from the ideation stage to your eventual exit. Our articles, quick tips, infographics and how-to guides can offer entrepreneurs the most up-to-date information they need to flourish.
Strategies for promoting diversity, equity and inclusion in your workplace
Posted by Kanika Sinha
February 14, 2023
Diversifying the workforce isn’t just the right thing to do, it also makes good business sense. Research finds that organizations that are diverse, equitable and inclusive — also known as DEI in the workplace — are better able to respond to challenges, win top talent, improve workplace effectiveness, drive better outcomes, and more.
Yet while leaders know DEI can add significant value and boost growth, the majority are struggling with how to implement these critical changes in their organizations. According to a Summit Leadership Partners 2021 CEO study that surveyed 200 portfolio company CEOs — while 95% of CEOs consider DEI to be a focus area for their companies over the next one to two years, 2 out of 5 CEOs do not have a DEI strategy in place. Even among those CEOs ready with a formal DEI strategy, 25% have not moved forward with objectives.
Below is your comprehensive guide to creating equitable and inclusive workplaces.
Diversity, equity and inclusion are often grouped together because they are interconnected, and it is only in combination that their real impact emerges. But the terms also tend to be misunderstood and misrepresented; illustrated below are meanings and implications of each one:
Diversity: It refers to the workforce composition, that is “who” is represented in the workforce.
Improving diversity in the workplace requires hiring individuals of different races, ethnicities, genders, religions, disabilities, nationalities, sexual orientations, ages as well as those with varied experiences, education, thoughts, skill sets, beliefs, backgrounds, personalities and beyond.
Equity: It refers to fair treatment, access, opportunity and advancement of one and all in the organization.
Creating equitable workplaces requires identifying as well as eliminating barriers and stereotypes that have historically prevented the full and effective participation of all groups.
Inclusion: It refers to “how” the employees experience the workplace and the degree to which organizations embrace all employees and enable them to participate as well as contribute.
Inclusion requires the creation of a work environment that’s supportive, respectful and collaborative, and that allows all employees to make meaningful contributions.
Why does DEI at work matter?
Workforce DEI can benefit an organization’s bottom line by creating a competitive advantage in many ways, as illustrated below:
Financial performance. A McKinsey study of more than 1,000 organizations finds that diverse companies outperform less diverse peers on profitability. The latest report analysis suggests that gender-diverse executive teams are 25% more likely to experience above-average profitability, and ethnically diverse executive teams are 36% more likely to experience above-average profitability. Another study by Harvard Business Review suggests that organizations with above-average total diversity are likely to have, on average, 19% higher innovation revenues and 9% higher EBIT margins.
Increased agility. A study by Josh Bersin Company finds that organizations with solid DEI practices are three times more likely to adapt to change effectively and innovate successfully.
Better decision-making. A study conducted by Forbes that analyzed nearly 600 decisions made by 200 different business teams indicates inclusive teams make better business decisions up to 87% of the time. Besides, decisions made and executed by diverse teams deliver 60% better outcomes.
Innovation and growth. HBR research finds that diverse companies are 70% more likely to capture a new market and 45% more likely to report growth in market share year over year.
Improved workplace effectiveness. Research by McKinsey finds that companies that are committed to diversity are 75% more likely to have a pro-teamwork culture. Besides, HBR research suggests that diverse teams make fewer factual errors and are smarter.
Higher employee engagement. A study from Deloitte and the Billie Jean King Leadership Initiative finds that a resounding 83% of millennials are actively engaged when they believe their organization promotes an inclusive work culture, compared to only 60 % of millennials who are actively engaged in a noninclusive workplace.
Employer of choice. According to Glassdoor, 76% of job seekers consider a diverse workforce as an important factor when evaluating job offers. The same report suggests that more than 50% of employees want their organization to put in more effort to improve workplace diversity.
Actionable steps to promote DEI in your organization
It is well-established that prioritizing DEI is good for business — it helps boost profitability and can significantly improve performance. But implementing effective DEI initiatives and resources can be challenging. Below are five effective ways to help you build and support a diverse, equitable and inclusive workforce.
Be aware of bias. Start by educating yourself; learn the history, background and context that inform the need for DEI. This includes understanding the systemic issues and unconscious biases that exist today, and the biased norms that went before.
Being informed will help you assess the organizational biases and identify where you stand with regard to the topic. Next, you can set benchmarks and metrics for the DEI goals you want to achieve.
Develop a strategic training program. Diversity training helps employees grasp the impact of cultural differences on workplace behaviors, recognize biases besides motivating positive attitudes in the workplace.
Focus on implementing training that’s relevant to your specific organization and employees, and that aligns with your broader DEI initiatives and identified challenges. Make sure to clearly communicate with your people about the purpose of training taking place, problems you’re trying to solve, and what comes next.
In addition to using internal resources, leveraging outsourced HR services can help you build tailored and more effective training programs for both the organization as a whole, as well as those that are function-specific.
Get managers involved from the start. Often, organizations have experts design DEI strategies that are then deployed to managers. But this traditional approach often lacks a reality check: Does this DEI program fit into the unique organizational context (that is the internal logics, mission, cultures and dynamics) and the way managers already work; or requires adding more to their complex workdays? Involving managers and other leaders in the design process can increase buy-in and seamless implementation of DEI initiatives making interventions more sustainable.
Facilitate ongoing feedback. Encourage employees to share their feedback to get a better understanding of what’s going on under the surface. Doing so will arm you with information needed to make smarter decisions. It will help take immediate action to reduce or eliminate any existing patterns of discrimination or biases within your organization as well as inform long-term DEI strategies.
Keep track of your DEI progress. DEI efforts aren’t successful overnight. In fact, it may take too long to see results or real change.
Making structural changes to workforce strategies and systems can take many months or even longer, especially as businesses face new challenges around hiring and retaining talent. Plus, cultural shifts take time. So, ensure you set DEI benchmarks and track the progress to assess the effectiveness of your efforts. This will not only help leaders understand what DEI initiatives are working, and which ones are falling short, but it will also help to hold them accountable in achieving their long-term goals.
DEI isn’t a one-off task or short-term project. Any organization making big moves before having the right culture and sturdy structures in place will not only earn a reputation for reneging but is likely to fail.
Want more? Escalon has helped over 5,000 companies across a range of industries to optimize routine business functions, like taxes, accounting, HR and payroll, and operate more efficiently. Talk to an expert today.
Kanika is an enthusiastic content writer who craves to push the boundaries and explore uncharted territories. With her exceptional writing skills and in-depth knowledge of business-to-business dynamics, she creates compelling narratives that help businesses achieve tangible ROI. When not hunched over the keyboard, you can find her sweating it out in the gym, or indulging in a marathon of adorable movies with her young son.