How Diversity Equity and Inclusion Can Improve a Workplace

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6 Key Practices for Advancing Diversity, Equity, and Inclusion

by: Shawn Miles of Ankura -

Wednesday, December 21, 2022

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To Start: What is Diversity, Equity, and Inclusion (DEI)?

DEI (Diversity, Equity, and Inclusion) is about creating a workplace where everyone feels valued, respected, and has an equal opportunity to succeed. But it's not just the right thing to do—it's also good for business. DEI helps organizations attract and retain the best talent, foster innovation, and build a strong reputation. In today's increasingly global and interconnected world, DEI is essential for building bridges and understanding between different cultures. When organizations commit to DEI, they signal that they are open to new ideas and perspectives, sending a powerful message to employees, customers, and business partners that they are valued members of the community. By building a more diverse and inclusive workforce, organizations also tap into new markets, drive innovation, and build a strong reputation. Implementing DEI can help your organization become more successful while also making the world a better place.

DEI refers to the framework and set of values modern organizations use to foster a welcoming work environment. Therefore, before moving on, let us consider what DEI is in more detail:

Diversity

Diversity refers to a population that contains individuals from varied backgrounds in terms of race, ethnicity, culture, and socioeconomic status, and where all these different perspectives are represented. When it comes to organizations, fostering workplace diversity requires including people from as many walks of life as possible. While often merely thought of in the context of race, diversity encompasses all communities and identities that have often been excluded from the traditional workforce. This includes, but is not limited to, people of color, LGBTQIA+ individuals, people with disabilities, and people from low-income backgrounds. DEI initiatives are about leveling the playing field so that everyone has an equal opportunity to succeed.

Equity

Equity is the quality of being fair and impartial. It gives everyone what they need to be successful. In an organizational setting, equity is ensuring that employees have what they need to do their jobs to the best of their abilities, and are compensated fairly, regardless of their differences, especially in race, gender identity, and physical and mental ability.

Nonetheless, equity should not be confused with equality: while equality is treating everyone the same, equity considers people's differences and is therefore more effective at seeking justice by fulfilling the specific needs of individuals in a diverse population. Equality is blind to difference—equity is not.

Inclusion

It is not enough to merely have a diverse group of people in the same room. If an organization is to reap the benefits of diversity, it must be committed to fostering a culture of inclusion. Inclusion is fundamentally about how members of a group feel they fit in. Creating an inclusive environment involves making all members feel respected, valued, and heard, such that they may have a sense of belonging and purpose. Inclusion is not only about valuing differences, but understanding them.

Other terms and variations of DEI

Given the relative novelty of DEI, the framework remains far from standardized. Therefore, organizations can vary in how they refer to, and approach it. Occasionally institutions prefer to change the order of the terms, omit 'equity', by merely calling it Diversity and Inclusion (D&I), or add terms, such as Diversity, Equity, Inclusion, and Belonging (DEIB). While attitudes and concepts may contain nuances between organizations, it is important to note that the priority remains the same across the board: furthering representation, providing a channel for voices to be heard, and making sure workers feel comfortable and at home.

Why is Diversity, Equity, and Inclusion Important?

The principal aim of DEI should be doing societal good and engaging in corporate responsibility. That said, there are a number of non-ethical advantages to adopting inclusive policies. Here is a condensed list of ways in which diversity impacts business:

A good track record boosts and protects corporate reputation

According to metrics from Google, inclusive advertising is far more likely to engage potential customers, 64% of whom said they took action after seeing an ad that was inclusive ^[1]. Likewise, a survey conducted by the International Labor Organization revealed that, of companies that improved their gender diversity, 54.4% reported improvement in reputation ^[2].

In addition, a good DEI track record can help safeguard against consumer backlash: according to Cone Communications 76% of consumers would refuse to purchase a product if the company acted counter to their beliefs ^[3]. Consumers are also more aware of their power to influence the behavior of companies by exercising their buying power, and now often do so to support the causes they believe in. The same study showed that 86% of Americans are now far more stringent on holding companies accountable, and expect them to address social and environmental issues. Furthermore, their idea of what responsibility looks like for a company has become much broader than it once was.

And a good reputation attracts top talent and investors

An organization's ability to attract and retain top talent is essential to maintaining a competitive edge. 76% of employees consider diversity, equity, and inclusion as an important factor when applying for jobs ^[4], creating a strong incentive for companies to integrate diversity into their list of priorities.

In addition, a strong reputation has the power to attract more investors, who are also increasingly cognizant of Environmental, Social, and Governance (ESG) issues.

Diversity is a driver of creativity and innovation

A lack of diversity can lead to groupthink, where the same perspectives are echoed and new ideas are not given a chance. In contrast, in diverse groups where members feel at home, their productivity, creativity, and engagement skyrocket. A study in the Journal of Organizational Behavior and Human Decision Processes found that gender-diverse teams are not only more creative but better at managing and resolving group conflict than homogenous ones ^[5].

An inclusive workplace reduces employee turnover while increasing engagement and loyalty

An academic article in the Journal of Business Ethics concluded that positivity and openness to an organization’s approach to DEI are directly correlated with employees’ perceptions of organizational virtue and ethical commitment, further highlighting the importance of a strong DEI strategy with regard to company reputation, as well as employee retention ^[6]. A 2020 Glassdoor study found that almost half of Black (47%) and Hispanic (49%) employees have resigned after having experienced or witnessed discrimination at work ^[7]. It should not come as a surprise that employees who do not feel included are more likely to leave their current job. A lack of diversity and inclusion can lead to feelings of isolation and loneliness, which in turn negatively impacts motivation and productivity. A diverse workforce has been shown to boost employee engagement and loyalty, as employees feel more valued in an inclusive environment.

Everything culminates in enhanced financial performance

Countless studies have shown the profitability of diversity in the workforce and company boards. For instance, multiple studies have revealed a positive correlation between the presence of women in senior positions of leadership and company net and gross margin ^[8], and that firms with more women in the c-suite are more profitable than those that do not ^[9]. When it comes to ethnicity, Harvard Business School researchers examined the venture capital industry and found that teams with diverse demographics had a significantly higher return on their investments: 32.2%, as opposed to 26.4% for racially homogenous teams ^[10].

Six Best Practices for Advancing Diversity, Equity, and Inclusion

#1 Gather diversity, equity, and inclusion data.

Before any big plans, it is always important to know where an organization stands. Without a proper evaluation, goals, programs, and transformations risk being haphazard, misguided, and even disruptive. Metrics are an invaluable resource for understanding the status quo, as well as measuring the success of future strategies.

Compile simple employee statistics to get a high-level overview

This can give a broad overview of the demographic make-up of an organization with regard to gender, age, and ethnicity. By looking at these easily accessible data, it is possible to derive some basic diversity information. While this information is far from sufficient, it is certainly necessary. Some basic statistics you may want to consider are:

People of Color: knowing the ethnic makeup of an organization is essential for understanding its diversity. Most companies measure the amount of Black and African Americans, Whites, Hispanics (White or non-White), Asians, two or more races, and, in the case of the United States, Native American or Alaskan Native, and Native Hawaiian or Pacific Islander.
Gender: understanding how many women there are and how they are distributed throughout the organization is indispensable.
Other identities: representation of individuals of different sexual orientations, gender identities, individuals with disabilities, and veterans should not be overlooked.
Employee statistics broken down by rank: measuring diversity in bulk only goes so far. This is why it is also advisable to divide statistics by rank, which can grant a more comprehensive view of how women, people of color, and other minorities are advancing to higher positions.

Conduct a thorough audit and analysis

A top driver of excellence is listening and gathering data from employees. A Josh Bersin report found that firms that actively listened to employees were 8.5 times more likely to satisfy and retain employees, 8.4 times more likely to inspire a sense of belonging, and a staggering 12 times more likely to engage and retain employees [11]. Here are four straightforward actions that you can take to conduct this analysis:

Conduct employee satisfaction surveys: Many organizations already conduct regular employee satisfaction surveys. While the goals of these surveys may be different, they can be modified to include questions about inclusivity and diversity.
Employee focus groups: Another way to gather data is through employee focus groups. These are meetings where a small, diverse group of employees discuss a certain topic. Sessions can be conducted in person or online, and give employees the chance to provide qualitative feedback about their experiences with diversity and inclusion in company culture.
DEI climate surveys: DEI climate surveys are specialized surveys that aim to assess an organization's progress (or lack thereof) with regard to its inclusion strategies. These surveys can be conducted internally or externally, and typically include both quantitative and qualitative questions.
Pay equity analysis: A pay equity analysis is a comprehensive review of an organization's pay practices. The goal is to identify and address any disparities, such that all employees are fairly compensated for their work. Pay equity analyses can be conducted internally, but often require the help of a specialized third party.

Evaluate your organization's diversity strengths and weaknesses

After gathering data, it is important to conduct an analysis and identify areas of improvement. This process is called a DEI needs assessment, and helps organizations determine what changes need to be made in order to further their DEI goals. There are a few different ways to go about conducting a needs assessment:

Look for patterns and trends in the data: This can be achieved by using visuals, such as graphs and charts. Once data is organized in this way, it becomes easier to identify areas of improvement.
Conduct more targeted interviews and focus groups: As stated above, employee interviews and focus groups are a great way to assess needs. However, be sure to use the data collected in the general assessment to hone in on specific problems. If carried out correctly, such strategies can provide valuable insight into key issues and areas of improvement, which will be of value in developing a strategic plan.
Review best practices: It can also be helpful to review best practices in DEI from other organizations. This can provide a sense of what has worked well for others, and what might work for your organization as well.
Do not overlook present successes: While it is important to identify shortcomings, it is also necessary to not lose sight of the progress that has been made. Cognizance of successes is important since it safeguards against changing good policies that are working. Additionally, it will help to maintain employee morale and motivation, as well as provide a sense of direction.

Once an organization has a good understanding of its strengths and weaknesses, it can begin to develop a DEI strategic plan.

#2 Establish DEI as a core value of your business strategy and culture

Understand that DEI cannot be a standalone strategy

Perhaps the most important, yet abstract, and difficult element to define is an organization's mission.

DEI cannot be a standalone strategy. Diversity initiatives fail when they are disjunct from a wider business strategy, which makes integrating a strategy for diversity into the core values of a business indispensable. It has been shown that if trainings or employee resource groups are offered merely to safeguard against litigation or to solve punctual DEI issues, employees can become frustrated and cynical with regard to them [12]. A diversity strategy must be championed by management and become part of a larger commitment to integrate DEI into the core values of the organization.

Each organization is different and therefore approaches to diversity and inclusion will vary. What works for one company might not work for another. The best way to ensure that everyone is on the same page is to develop a working definition of DEI that is specific to the organization in question. This definition should be informed by data gathered from the assessment stage. The process of drafting a definition can be facilitated through interviews, focus groups, and/or surveys. After settling on a diversity and inclusion mission, it is important to link it back to the organization's main purpose. This will help to ensure that DEI is not treated as a side project, but rather as an integral part of the organization's activities.

Establish accountability in your diversity management program

A diversity management program is a system that organizations put in place to manage diversity. It includes policies, practices, and procedures that are designed to help organizations achieve their diversity goals. This can encompass ensuring everyone in the organization is aware of the diversity and inclusion goals, and their role in achieving them. It streamlines the allocation of resources and directs the monitoring of progress and necessary policy adjustments.

However, studies have shown that holding senior leaders accountable for achieving DEI goals is key to success, yet many institutions still fail to do so ^[13]. In 2021, only 12% of companies held managers accountable for recruiting from diverse slates of candidates ^[14]. As stated above, DEI values must be heralded by the top for employees to truly feel the initiatives matter. In fact, around 13% of employees actively keep tabs on how often managers mention subjects of DEI in meetings ^[15].

A DEI strategy is not merely about engaging and diversifying the workforce, but all levels of the organization.

#3 Develop a DEI strategic plan to set your goals

What is a DEI strategic plan?

A DEI strategic plan contains a set of objectives with regard to diversity and inclusion, as well as a list of policies and actions that will be adopted and undertaken to achieve them. This type of plan provides a roadmap for change and ensures that everyone works towards the same goal. Additionally, a DEI strategic plan can help to secure buy-in from key stakeholders, as it establishes a clear path for the organization and its commitment to diversity and inclusion.

What are the key aspects of a strategic plan?

Bearing in mind the indispensable points mentioned in the preceding section, here we will discuss the elements to build up a strategic plan:

A definition of the status quo and current problems - The first step is to make the present situation known, as found in the gathering and evaluation of data. This will make the following steps significantly more straightforward. Namely, to identify the problem that your organization is hoping to address with its diversity programs. Data might have revealed racial biases in the workforce or unequal pay between men and women. Establishing these facts is important before beginning a comprehensive diversity transformation.
Define measurable goals - Once the problem has been identified, the next step is to set concrete objectives. Ambiguity and vagueness can occasionally be the cause of confusion, especially when there is a lack of hard metrics for evaluating DEI. Slippery measurability makes quantifiability in diversity programs indispensable. Therefore, objectives should be specific, measurable, achievable, relevant, and time-bound (SMART). For example, a goal might be to increase the percentage of women in leadership positions from 30% to 40% over the next five years. Alternatively, these goals need not be limited to demographics, but also investments, the creation of employee support groups, or the planning of certain events.
Designate roles and responsibilities - It is important to ensure that everyone knows what their role is in achieving the organization's diversity and inclusion goals. This might involve appointing a Diversity Officer or creating DEI committees.
Define concrete action items - Once goals have been set, it is important to create a plan of action. This will involve developing specific strategies. For example, if the goal is to reduce racial bias and increase acceptance in the workforce, one action item might be to implement unconscious bias training for all employees. We will go over some important action items further on in this list.
Develop and implement monitoring processes - It is important to regularly monitor progress and make adjustments where necessary. This might involve conducting regular diversity audits, or setting up reporting mechanisms. Additionally, it is important to create channels where employees can provide input on what is working well and what needs improvement.

#4 Restructure your recruitment process to align with your strategic plan

An essential component of promoting diversity in a workforce is pulling together a diverse group of people to begin with. This is the most obvious and common way to go about achieving diversity in an organization. It is important to note, however, that diverse recruiting must work in tandem with a cultural transformation of inclusivity. Neither can work without the other: without a culture of inclusivity, diverse employees will not stay long; without diverse candidates, it will be difficult to foster a culture that is understanding and accepting of difference.

There are many ways to adjust the recruitment process, but it has been proven that the most impactful for DEI is, to begin with the HR team.

Build DEI knowhow in your human resources function

Around 4 in 5 human resource professionals consider themselves to be beginners in DEI matters [16]. This is a strikingly low amount of expertise in the field of talent management, which has profound impact on how successful DEI initiatives end up being. Furthermore, when HR does adopt DEI values, the results are very tangible, as companies that succeed in doing so, as they are 8.2 times more likely to retain and engage customers ^[17]. This makes educating HR and transforming the recruitment culture all the more necessary.

There are a number of procedures that can aid in changing the recruitment process and cementing DEI into the HR team; we will go through the most straightforward:

Identify and establish the essential functions of every position with inclusive job descriptions

This will help to ensure that only those qualifications that are truly necessary for the successful performance of the job are included in the job description. This will also help to ensure that the job is not written in a way that unnecessarily excludes people of certain backgrounds. Writing inclusive job descriptions is a large part of this. An ever-growing group of people, most notably members of Generation Z and Millennials, consider diversity and inclusion as major factor when applying for jobs. A study by Glassdoor revealed that 76% of job seekers consider diversity as an important factor of consideration when applying for jobs.

Be sure to use gender-neutral language and avoid making assumptions about who is best suited for the role.

Use diverse recruiting sources

Identify a pool of qualified candidates that will fulfill the organization's needs and reflect the community in which it operates.

One way to do so is to look for human resources organizations that focus on promoting workplace diversity. You can also look for online job boards or social media groups that focus on inclusion or target underrepresented groups.

A popular recruiting method for furthering DEI goals is ‘diverse slate’ hiring. A diverse slate is defined as a group of qualified candidates that includes members of underrepresented groups. The goal of using diverse slates is to ensure that a diversity of candidates are interviewed for each open position. A common way to achieve this is to set a minimum of required qualified candidates from underrepresented groups for each interview slate.

Increase transparency in your selection process

Increasing transparency in the selection process by sharing information about the qualifications that are being considered for the role can be useful by building trust with members of the community who may be skeptical of the organization's commitment to inclusion.

Ensure your selection process is void of unconscious bias

Ensure recruiters are up to date and are aware of how to identify their own unconscious bias and avoid it. An alternative or additional solution may be blind screening, wherein information that could lead to discrimination during the initial review process is removed from resumes. This includes information such as names, addresses, schools attended, and organizations belonged to. By removing this information, decision-makers will be less likely to rule out an applicant based on their background and more likely to focus on their qualifications.

Set and respect retirement goals

It helps to delimit diverse recruitment numbers and respect them. For instance, some companies aim to recruit women or minorities in proportions that reflect, at minimum, the percentage of graduates they represent at schools and universities. This can help keep diversity goals in perspective.

#5 Incorporate DEI into your talent strategy to boost retention

DEI is not merely about diverse recruiting, however, but making sure employees feel comfortable and included. As mentioned above, research has shown that if diverse hires do not feel included, they quickly leave. DEI considerations must always be taken into account when it comes to the retention and development of existing employees. This means providing equal access to promotions, leadership roles, and other career development opportunities for all employees regardless of their identity. DEI must permeate all levels of the talent supply chain.

Foster equitable growth and promotion

For any employee to feel included and fairly treated, it is essential to provide equitable growth and promotion opportunities. Therefore, organizations should have a robust system in place for performance reviews, succession planning, promotions, and the identification of high-potential employees that eliminates any unconscious bias from being part of these processes. Succession planning should be used to identify and develop employees with diverse backgrounds for leadership roles. Organizations can also create mentoring programs and other initiatives to help ensure that all employees have the support they need to reach their goals.

If employees do not see opportunities to progress, they will cease to feel valued.

Consider inclusive benefits

In order to create an inclusive work environment, it is important for organizations to consider the needs of all employees. This includes benefits and policies that are relevant to individuals of all backgrounds. Some benefits and policies that may be helpful to promote inclusion are:

Flexible work arrangements: This can include things like telecommuting, part-time work, and job sharing.
Parental leave: Offering parental leave that is inclusive of all parents, regardless of gender identity or family structure, can help to create a supportive environment for all employees.
Support for employees with disabilities: This can include things like providing accommodations, flexible work arrangements, and training for managers on how to best support employees with disabilities.
Mental health services: Providing mental health services, such as counseling and support groups, can help to create a supportive environment for all employees.
Career progress services: Organizations can also provide employee training services to help employees with career advancement. This can include things like mentoring, coaching, and training programs.

Execute regular workshops and diversity training programs

Diversity training programs and workshops are events that organizations hold to educate employees about diversity. These can be one-time events or recurring. Though not all, most training programs focus on awareness training, a form of training that helps employees develop the skills they need to work effectively with people from diverse backgrounds. It typically covers topics such as unconscious bias, cultural competence, and microaggressions. Awareness training can help employees to become more cognizant of their own biases, and therefore more capable of annulling them.

Inclusion training programs, whether online or in-person, provide an opportunity for employees to learn about and discuss the various aspects of diversity more freely amongst themselves, sharing views and experiences. Lastly, regular workshops might also be useful for keeping the workforce up to date on changes to the organization's diversity policy.

It is worth mentioning, however, that studies have found that trainings have limited applicability when no other action is taken. Instead, the Josh Bersin report calls them ‘supportive actions’ ^[18].

Build a solid set of Employee Resource Groups (ERGs)

Employee Resource Groups (ERGs)--sometimes referred to as Business Resource Groups (BRGs), or Affinity Groups--are voluntary, employee-led groups that focus on promoting inclusion for a particular group of people. ERGs can be helpful in promoting inclusion by providing a number of benefits, including:

A supportive network for employees
A forum for discussions concerning issues relevant to the group
Resources and information about diversity and inclusion
Training and development opportunities
A channel for feedback to the organization

ERGs can be helpful in promoting inclusion, but they should not be the only focus of an inclusion strategy. Inclusion should be promoted throughout the entire organization, and ERGs should be one part of a larger effort, which is why these too, are considered ‘supportive actions’.

#6 Track progress on DEI initiatives with employee engagement surveys

Employee engagement surveys are a valuable tool for tracking progress on DEI initiatives. They can help to identify areas where employees feel included and respected and provide valuable insight into where there might be room for improvement. A DEI policy does not end with the implementation of temporary initiatives to fix punctual problems, but must be integrated as a general policy that receives attention and updates just as any other. Therefore, it is imperative that an organization monitor its effectiveness and make meaningful changes and improvements where necessary.

In addition, tracking progress will likely reveal successes that will be able to be celebrated both internally and externally.

Conclusions

DEI initiatives are a great way to improve a workplace environment, experience, and productivity. Diversity, equity, and inclusion are important topics that should be given attention in all organizations, regardless of industry.

This can be done through initiatives such as developing a DEI strategic plan based on reliable metrics, implementing policies and programs that are inclusive of all employees, and diligently keeping track of progress, all while keeping DEI as a core value of an overall business strategy.

Developing a strong DEI record can build morale, attract top talent, and perk investor interest. By taking steps to advance DEI in your organization, institutions can create a more inclusive environment for all employees, as well as doing social good and increasing their business prospects.