For some, the idea of Diversity, Equity, and Inclusion (DE&I) is a tagline or a trend that can be leveraged to a company’s advantage, but this is only the case when these values are inherently built into an organization’s DNA and culture through robust programs and initiatives.
Effective DE&I programs promote employee attraction, engagement, satisfaction and retention, reinforce stronger customer engagement and satisfaction across a broader market, and encourage greater rates of innovation, enhanced productivity, better decision making and problem solving capabilities, increased revenue and profitability.
All of this by simply doing the right thing. Here’s how DE&I can work for you.
What constitutes diversity and who benefits from inclusivity?
Diversity can take many forms: ethnicity, race, gender, sexual orientation, language, age, education, religion, culture, physical abilities, political beliefs, or socioeconomic status. The onus is on business owners to open their doors to diverse employees to reflect the diversity in their communities.
To become diverse, companies must embrace these differences, be fair and equitable, and a good way to achieve this is through inclusion. Inclusion is the path forward when it comes to leveraging the advantages of diversity, while equitable policies, procedures and attitudes are entrenched in these inclusive workplaces and environments.
Some of the benefits of effective DE&I programs include two and a half times higher cash flows per employee, increased revenue by upwards of 20 percent, and a 70 percent greater chance at capturing new markets.
A major shift is taking place when it comes to demographics in North America. Almost half of Generation Z are racial or ethnic minorities, making this group 16 percent more diverse than Baby Boomers.
By 2044, minority groups in the U.S. are set to reach majority status, with no single ethnic or racial group set to be a majority by 2065, which means there is a long way to go to ensure companies reflect the unique composition of society. It is also high time to stop referring to these groups as “minorities.”
With a national average unemployment rate of around eight percent, a rate that is higher amongst underrepresented groups, there is significant ground to be made up to ensure a diverse, equitable and inclusive job market and robust DE&I programs are an opportunity to close this gap.
Diversity is not only good for individual companies; it is good for the economy. Global GDP would increase more than 25 percent with improved DE&I. For instance, if gender diversity was achieved and pay equity a priority, it could add $28 trillion to the GDP by 2025. The impact would be exponential if all diverse cohorts achieved parity.
Without follow through, investments in DE&I programs could be wasted. To be effective, DE&I programs must be monitored, evaluated, measured, and reported, but the truth is, only 0.4 percent of Fortune 500 companies make DE&I data public. This is likely because many programs are not as effective as intended.
According to a white paper sponsored by Affirmity.com looking at the Future of DE&I in 2022, many companies are struggling to mature their DE&I initiatives, with less than a quarter of respondents saying they reached an advanced or expert stage.
The same study found that only 40 percent of companies offer DE&I related learning and development opportunities to all employees, with 18 percent offering the bare minimum mandated by law. It’s no wonder why only 45 percent of companies say that their workforce reflects the current demographics of the workforce. These are missed opportunities.
Even in 2022, when almost half of U.S. employees are women, more than 40 percent of women still experience gender discrimination at work, on top of only earning 83.1% of their male counterparts’ wages.
And, despite more women obtaining four-year college degrees than men, they are less likely to be hired or promoted to C-Suite roles (when they are in those roles, they are more likely to focus on DE&I).
If women were hired on merit, without discrimination, these statistics would change. In blind applications, women were more likely to be hired than men, which goes to show how uneven the playing field remains.
In 2021, only eight percent of the CEO workforce of Fortune 500 companies were women, and that is the highest it has ever been. For every 100 men promoted to management, only 86 women can say the same. The stats are even worse for POC.
In 2022, only six Fortune 500 companies had a black CEO. POC are also more likely to experience workplace biases, with many leaving positions due to unresolved matters after reporting them.
Many minorities will change their names knowing that ethnic names are less likely to move forward in interviews. These are very longstanding biases that have been entrenched in the employment system since the first wave of immigration when newly landed immigrants would Anglicize their names to have a better chance of succeeding.
While we have come a long way from these times, biases still exist and work still needs to be done to ensure equitable access to jobs, and inclusive hiring processes are required to ensure that companies are diverse and reflect the current makeup of the community to reap the benefits DE&I can afford.
How to be diverse, equitable and inclusive
Inclusivity is the pathway to diversity: companies and their leaders must be welcome to diversity and approach these interactions with openness and intention for equity. This goes far beyond what is mandated by law.
Some of the best practices to draw from to foster a culture of inclusivity is to start at the top. Without the support of leadership, all efforts to become more diverse, equitable and inclusive will fall short. Managers need to be held accountable to ensure the culture is instilled throughout every level of the operation.
Data can be used to get a better understanding of the current state of your company culture, as well as monitor and measure progress. This will optimize resources and ensure that time and effort is not being wasted.
Further, leaders of today should be seeking leaders of the future, so when hiring, it is important to identify talent that can grow with the company. Be sure to develop this talent throughout their career, providing them with a fulfilling place to evolve that they want to remain loyal to and can serve as cultural change agents for the long term.
DE&I for the future
DE&I programs are no longer “nice to haves” but rather “must haves” when it comes to operating any business. After instituting a DE&I program to attract and retain workers, it cannot stop there.
Company leadership must continue to engage, involve, and evolve its operations to ensure it is always up to date and relevant which will ensure it is agile enough to adapt to market challenges as they arise.
At a time when demand for labor, skilled and unskilled alike, is at an all-time high, any efforts to improve employee attraction and retention are worth it, particularly if they are as effective as investing in DE&I.
Stronger DE&I will contribute to improved customer engagement and satisfaction, expanded market reach, greater rates of innovation and productivity, improved decision making and problem solving and increased revenue and profitability, in addition to a better reputation and a sustainable business plan for the future.
Knowing that there is a lot at stake for companies who are behind the eight ball when it comes to investing in DE&I initiatives and programs, leaders cannot wait to make this a priority. There is power in diversity, equity, and inclusion, but it needs to be unlocked via a robust program and a company-wide commitment to doing and being better and its starts from the top down.