In business, Diversity, Equity, and Inclusion (DEI) can be treated like buzzwords that don’t amount to much more than mandatory yearly training. But in reality, when businesses make DEI a priority they see benefits that stretch across the entire organization — including the bottom line.
While there isn’t a “one size fits all” process for rolling out a successful DEI program, understanding what DEI is and the value it can bring is a great first step.
What is DEI?
Diversity is the presence of differences in any given setting. At work, it typically refers to physical, psychological, and social differences within groups. A “diverse” community, group, or company is one where various social and cultural characteristics coexist.
Equity ensures that everyone has access to the same opportunities, treatment, and advancement as their colleagues. Equitable businesses aim to identify and eliminate barriers that may prevent some group members from participating.
Inclusion refers to how people with different identities feel as part of the larger group, and doesn’t necessarily result from diversity. In some cases there may be diverse teams where certain members don’t feel as valued as others — this is what inclusion aims to solve.
Together, Diversity, Equity, and Inclusion mutually reinforce each other.
Why is DEI important for business?
Companies that don’t implement DEI can miss out on opportunities to tap into their team’s potential and help individual employees truly shine. A study from Unrealized Impact showed that diverse teams are more innovative, make better decisions, and have better shareholder returns.
Another study from McKinsey & Company in partnership with The Society for Human Research Management (SHRM) looked at the performance of companies with different levels of workplace diversity and found that companies that are gender and ethnically diverse are 15% and 35%, respectively, more likely to outperform less diverse peers. The same study found that companies with more racial and gender diversity also generate more sales revenue, have more customers, and overall have higher profits.
The benefit of DEI for your business
As we’ve seen, companies that value DEI are stronger and more successful than those that don’t. Prioritizing DEI principles means your employees are engaged, happy, and feel valued.
Multiple studies have shown that DEI has overwhelmingly positive impacts on every area of a business, including:
Teams are 158% more likely to understand the company’s customers when they have at least one member who represents their target’s age, gender, race, culture, or sexual orientation.
Companies with diverse management earn, on average, 38% more revenue than companies with lower diversity, indicating that diverse groups are more innovative and find more creative and efficient solutions to problems.
Companies that rank among the top 25% when it comes to gender diversity among executive teams are 21% more likely to be profitable and 27% better at creating value.
Ready to dive into DEI principles? Sign up for our self-paced DEI program today!
How to implement DEI in your business
Do your DEI work
Make sure that you fully understand history, background, and context. A great way to do it is by investing in DEI training.
Understand your data
The next step is to understand the demographics of your organization, including your leadership team. Once you have the data, you can set benchmarks and metrics to help you achieve your DEI goals.
Set measurable goals and hold yourself accountable
Set benchmarks related to interviews, pass-through rates, and metrics around the demographics you hire.
A great way to hold yourself accountable is to tie measurable outcomes to compensation, especially for those in leadership roles.
Look at your hiring process
Look at the strategies your talent acquisition team are using to attract new employees and be strategic about posting job openings beyond homogeneous networks and look to publications, websites, and other ways to reach under-represented groups with your job posting.
Hire for culture contribution
Conventional hiring advice says to hire for culture fit, but by focusing on culture contribution you can hire employees who not only align with your organization’s values, but also bring diverse perspectives, experiences, and backgrounds as well.
Open up lines of communication
Encourage employee feedback through channels like Slack, host leadership roundtables, and make it clear that you value your employees’ experiences and ideas.
Make DEI part of your business today
By making Diversity, Equity, and Inclusion a core part of your business you’ll not only attract and retain top talent, but it will have a meaningful and significant impact on your company culture and bottom line.
To get started, sign up for our self-paced DEI program today.