Sustainable DEI change requires both commitment and deliberate action; closing the gap to turn the intangible into actionable DEI initiatives and supporting equity and fairness in the workplace.
In order to get there, organizations need to understand the fundamentals of diversity, equity, and inclusion – and how to instill the values of DEI within the workplace.
What is DEI (Diversity, Equity, and Inclusion)?
DEI stands for “diversity, equity, and inclusion.” Within organizations, it is a holistic approach that aims to create a workplace culture where all individuals (employees, customers, and other stakeholders) feel valued, respected, and able to bring their authentic selves to the workplace.
Here’s what diversity, equity, and inclusion look like broken down into separate pieces:
Diversity
Diversity refers to the presence of people from different backgrounds, perspectives, and experiences. This can include differences in race, ethnicity, gender, sexual orientation, age, religion, socioeconomic status, education, language, and physical & mental ability. Diversity can also include variations in life/work experiences as well as differences in thinking styles and ideologies.
Equity
Equity refers to fairness and justice in the distribution of resources and opportunities: ensuring that all individuals have equal access regardless of their background or identity. It’s about creating a level playing field for all individuals and recognizing and addressing systemic barriers that may prevent some individuals from achieving their full potential in the workplace.
Inclusion
Inclusion refers to an organizational culture/environment where all individuals feel valued, respected, and able to bring their authentic selves to work – an overall sense of belonging. In an inclusive workplace, everyone’s unique perspectives and contributions are valued and appreciated: there’s a culture of respect, trust, and openness that enables and encourages individuals to speak up without fear of retaliation.
For organizations, diversity, equity, and inclusion require a continuous process of learning, reflection, and action. A strong commitment to DEI initiatives may contribute to developing a more engaged, innovative, and productive workforce.
Types of diversity in the workplace
When people think of “diversity”, often they think of visual characteristics that can immediately signal variations in identity: age, sex, and race. But, as we touched on earlier, diversity encompasses more than just demographic characteristics.
This is not an exhaustive list, but with the right DEI initiatives in places, organizations can encounter and experience many of the following examples of diversity in the workplace:
Demographic diversity: Demographic diversity is a broad category that can include differences in characteristics like race and ethnicity, or sex and gender identity. On a greater scale, we could break it down even further; for example, characteristics like race, ethnicity, national origin, language, and citizenship status could each stand alone as their own types of diversity.
Cultural diversity: Cultural diversity may have some overlap with demographic diversity, especially as it pertains to characteristics tied to the histories of people within a given geographical location. Cultural diversity usually involves differences in languages as well as culture-tied traits like values, customs, beliefs, and traditions.
Socioeconomic diversity: Socioeconomic diversity refers to the diversity of individuals in a workplace based on their social and economic backgrounds, which can include factors like education level, income, occupation, and class. It can also include a person’s access to resources and opportunities.
Generational diversity: Generational diversity refers specifically to age groups. An organization has good generational diversity if there’s broad representation among the core age groups: Baby Boomers, Gen X, Millennials, and Gen Z.
Ability diversity: Ability disability refers to the diversity of individuals based on their physical, cognitive, and mental abilities. This can include factors such as mobility, hearing, vision, and learning disabilities.
Cognitive diversity: Cognitive diversity is the variations in how each person thinks, learns, and processes information. This could refer from anything to the intellectual functioning of an individual to the unique ways an individual mentally processes information and experiences.
Experiential diversity: Experiential diversity refers to the differences in experiences between individuals – this can include work and life experiences, family histories and upbringing, religious identities and beliefs, as well as educational backgrounds and histories.
Behavioral diversity: Behavioral diversity looks at the variations in behaviors between individuals, particularly as they tie into communication styles, work styles, personalities, and decision-making processes.
There are a limitless number of factors that contribute to what’s considered diverse. For many advocates of DEI, one objective is to ensure that an organization’s people reflect the diversity that’s represented in our larger society. From even just a racial and ethnic diversity standpoint, the US population continues to grow more diverse; at a minimum, organizations should try to match those race and ethnicity percentages within their ranks.
Diversity, equity, and inclusion in the workplace
It’s hard to find diversity in the workplace statistics that can actually tell us how companies are doing when it comes to progressing diversity, equity, and inclusion within their organizations. For example, the latest numbers from the Bureau of Labor Statistics show that 77 percent of the U.S. labor force is made up of White Americans, but that number looks specifically at race (and not ethnicity) – counting a majority percentage of people with a Hispanic and Latino ethnic background as “White” by race. And it’s even harder to put a pulse on how equity and inclusion are tackled on an organizational level.
What’s important to know, though, is that there’s an increasing demand for diversity in the workplace. The Washington Post reported that Millennials and Gen-Zers put DEI top-of-mind when seeking out employers (with 76 percent reporting that diversity, equity, and inclusion were important factors).
Why is diversity important in the workplace?
Diversity, equity, and inclusion are essential to helping organizations improve their business performance. Diversity in the workplace isn’t just about the optics of creating an organization that’s representative of the current population, it’s about using that diversity to help push an organization toward greater success.
Diversity in the workplace has the potential to increase a company’s financial performance:
Diverse teams earn higher cash flow: According to a 2022 report from ResearchAndMarkets.com, companies with more diverse teams earn 2.5 times higher cash flow per employee than those companies with less diversity (as measured by race, ethnicity, sex, and gender).
Inclusive teams are more productive: In the same report, companies that create inclusive environments create more productive workers – by over 35 percent compared to less inclusive organizations.
Executive teams that are more diverse improve financial performance: A 2019 McKinsey study found that companies with higher gender diversity on executive teams were 25 percent more likely to outperform in profitability. Even more compelling: more ethnically-diverse executive teams were 36 percent more likely to deliver financial outperformance.
More diverse organizations see more innovation revenue: The Boston Consulting Group published, back in 2018, that companies with above-average diversity scores (meaning: companies with more diverse workforces) reported 45 percent revenue earned through new innovations compared to the 26 percent revenue reported by companies with below-average diversity scores.
It’s important, though, to step back from the business case for diversity and, rather, look at it from a fairness perspective. People from diverse backgrounds should not have to validate their existence and presence within any organization based on their identity’s possible contribution to the bottom line.
What are the benefits of diversity in the workplace?
More so than the financial impact, there are several benefits of diversity in the workplace that can leave a lasting impact on the overall success of an organization. When organizations invest in DEI initiatives in the long-term, all parts of the business can find positive impact.
Some of these benefits include:
Increased creativity and innovation
A diverse and inclusive workplace can improve creativity and innovation by bringing together a wide range of perspectives, ideas, and experiences. A culture of respect and open-mindedness makes it more likely for people to share their ideas and to collaborate with one another. People are constantly encouraged to think differently, making room for new perspectives. This pushes DEI-focused organizations to identify more opportunities for growth and development, and to build out innovative solutions.
Improved decision-making
A diverse group of people are more likely to consider a wider range of options and potential outcomes, leading to more informed and well-rounded decisions. The different backgrounds and experiences contribute to more accurate predictions and forecasting, enabling organizations to be better prepared for the future.
Exposure to a more diverse set of coworkers can push individuals to challenge personal assumptions and biases, and help people to formulate new insights based on a larger set of perspectives. In a fair workplace, individuals feel a sense of fairness and belonging, and can lead to more openness in the decision-making process.
Better representation of the customer base
Investing in DEI can lead to a workforce that better reflects a company’s customer base. A more diverse workforce is more likely to have employees who understand and can relate to the needs and experiences of a diverse customer base. That leads to institutional knowledge that can better inform the ways in which an organization approaches interactions with customers – whether that’s sales, marketing, or customer service. A more diverse organization can also lead to the development of products and services that better meet the needs of the customer.
Boost employee engagement and job satisfaction
A strong culture of DEI in the workplace can improve employee engagement and job satisfaction by fostering a sense of overall belonging and acceptance. When employees feel that they are valued and respected for their unique perspectives, experiences, and backgrounds, they are more likely to be engaged and satisfied in their work. An equitable work environment can give employees equal opportunities to develop new skills and gain new experiences, which can lead to improvements in employee engagement, trust, and satisfaction.
Attract and retain top talent
Organizations that prioritize diversity, equity, and inclusion are more likely to attract a wide range of applicants from different backgrounds, cultures, and experiences. You can build a reputation as a company that values and respects its employees, as well as a leader in innovation and growth culture. A diverse workforce can help to create a more positive and engaging work environment, which can increase overall employee satisfaction and retention.
Where does EEO (Equal Employment Opportunity) and affirmative action have to do with diversity in the workplace?
Equal Employment Opportunity (EEO) refers to the principle that all individuals should have the same opportunities for employment, free from discrimination based on factors such as race, color, national origin, sex, religion, age, and disability.
EEO laws are enforced by government agencies such as the Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP), and employers must comply with them. EEO is not only important for legal compliance but also for creating a fair and inclusive work environment.
Affirmative action refers to policies and programs implemented by employers to address past discrimination and promote equal opportunity for groups that have been historically marginalized, such as women and minorities. These policies may include proactive measures to increase the representation of underrepresented groups in the workforce or student body, such as setting goals for hiring and taking steps to recruit and retain members of those groups.
Typically, an affirmative action program or plan (AAP) is an organization’s plan for ensuring that it follows EEO laws and that it has steps in place to improve their employment of people from underrepresented groups.
Organizations that actively pursue DEI initiatives and place diversity at the center of their core values are better equipped to comply with EEO laws. These laws and regulations that prohibit discrimination in the workplace are meant to ensure that all employees have equal opportunities and are protected from discrimination. By creating a diverse and inclusive workplace (and sustaining that model), companies keep compliance with these legal and social expectations.
DEI initiative examples at work
DEI initiatives involve any program, policy or strategy implemented by an organization to promote and support diversity, equity, and inclusion within the workplace.
The goal of diversity initiatives is to create a workplace environment where all employees feel valued, respected, and included, and where their unique perspectives and contributions are recognized and used to support organization success.
There are a variety of DEI initiatives that companies can implement in the workplace. Here’s just a few examples:
Employee resource groups (ERGs): Employee resource groups are formed by employees who share a common identity or experience, such as race, gender, sexual orientation, or disability. ERGs can provide a sense of community and support for underrepresented groups and help raise awareness and promote diversity and inclusion within the company.
Compensation package assessment: Assess your compensation package to make sure that the wages you’re providing adequately supports each employee’s ability to pay their nondiscretionary expenses and creates for them a solid foundation of financial security. This should be the first step in creating better financial inclusion and equity in the workplace.
Benefits realignment: Similar to assessing your compensation package, revisit your employee benefits and make sure they align with the needs and expectations of your employees. Collect data on participation and value – for e.g., how much value do employees place on flexible work schedules, or what percentage of people actually participate in the company’s retirement plan offerings?
Unconscious bias training: Unconscious bias includes the attitudes or stereotypes that affect our understanding, actions, and decisions in an unconscious manner. Unconscious bias training aims to help employees recognize and overcome these individual biases to create a more inclusive and equitable workplace.
Recruiting and hiring diversity: Diverse hiring is a core DEI initiative and includes setting goals for diversity in hiring, recruiting from a variety of sources, and using inclusive language in job postings. On approach to this is through targeted outreach and partnerships with organizations that support underrepresented groups.
Diversity in leadership: Promoting diversity in leadership positions, including on boards of directors, C-suite, and senior management, can help ensure that different perspectives are represented in decision-making. It also fosters a greater sense of trust and respect with employees through the organization.
Diversity and inclusion metrics: Companies should track progress towards diversity and inclusion goals by collecting and reporting diversity data of their workforce and measuring the effectiveness of initiatives. Regularly monitoring and measuring diversity can help organizations track their progress and identify areas for improvement.
Employee development and training: This is a core DEI initiative that companies should offer. Providing employee development and training opportunities in areas such as leadership, management, and other professional skills can help ensure that employees across all backgrounds have the same opportunities to advance in their careers.
Employee mentorship and sponsorship programs: Employee mentorship or sponsorship programs connect employees from underrepresented groups with mentors or sponsors who can provide guidance and support in their career development. These programs can also supply an added source of psychological safety in the workplace for people from marginalized groups, allowing them to feel better prepared in their jobs.
Flexible work arrangements: Offering flexible work arrangements, such as remote work and flexible hours, can help accommodate employees with diverse needs and backgrounds. This can include options like parental leave to help keep a more diverse talent pool.
Employee and candidate feedback: Encouraging feedback and/or engagement from current employees and job candidates in your pipeline can help identify and address issues related to diversity and inclusion within the organization. This DEI initiative is important in helping you to evaluate the effectiveness of your company’s other diversity initiatives.
Community outreach and partnerships: Build relationships with different community organizations that support underrepresented groups to help connect you to diverse talent pools.
Diversity celebration: Celebrate diversity through events and activities to create a culture that values and respects differences. You can do this by recognizing and celebrating cultural holidays, or by organizing events that showcase diverse cultures.
Company policies (as well DEI initiatives) review and revision: A key part to ensuring your organization’s DEI initiatives are successful is to constantly audit and revise your company’s policies and procedures to ensure they are inclusive, fair, and non-discriminatory. Review everything from recruitment policies to offboarding and include regular performance review of the effectiveness of all your DEI initiatives.
DEI training topics to create a more-informed workforce
In order for a company’s DEI initiatives to succeed, your workforce needs a comprehensive understanding of diversity, equity, and inclusion – and how DEI can help prepare each of them both as individuals and as a core part of the larger organization. The right DEI training program can equip your company for success.
Some potential topics in you DEI training program can include:
- Creating inclusive and respectful work environments;
- Addressing the impact of generational wealth on social status and career advancement;
- Understanding unconscious bias and how it can affect decision-making and interactions with others;
- Learning about different cultures, backgrounds, and experiences to foster empathy and respect for diversity;
- Addressing the impact of systemic discrimination and how to work towards equity;
- Understanding the different dimensions and types of diversity, including race, gender, sexual orientation, ability, etc.;
- Addressing intersectionality and understanding how different identities overlap and intersect to create unique experiences and perspectives;
- Examining and acknowledging privilege and power dynamics and how they contribute to inequality;
- Developing skills for effective communication and conflict resolution in a diverse workplace;
- Recognizing and addressing microaggressions and other forms of discrimination.
- Learning about the history of discrimination and marginalization;
- Developing inclusive leadership skills and strategies for creating a more inclusive workplace;
- Identifying and addressing bias in recruitment, hiring, and promotion; and
- Understanding and practicing allyship.
There are many other topics that can incorporated into a DEI training program. The key element is to ensure you create a safe space for open and honest discussion among employees and to include various voices and perspectives in the training. You should also considering making it an ongoing/regular training event (rather than one-time).
DEI activities to engage employees
Aside from implementing a DEI training program, you can implement various DEI activities to constantly engage employees and to support the effectiveness of your ongoing DEI initiatives.
A few ideas to consider:
Diversity and inclusion games and activities: These activities are designed to help employees learn about different cultures and ways of thinking in a fun and interactive way. Group activities encourage teamwork and collaboration, and create a better sense of trust, understanding, respect, and rapport between individuals of different identities and backgrounds. There are a few fun activities on this list.
Diversity and inclusion book clubs: Companies can organize book clubs to read and discuss books on diversity, equity, and inclusion topics. A book club can be a great way to spark conversations and promote understanding among employees.
Virtual tours and events: Virtual events are a great way to get people to take part from all backgrounds. Virtual tours of different cultural landmarks and events can help educate employees about different cultures, customs, and perspectives.
Volunteer opportunities: Companies can also organize volunteer opportunities to support the local communities and diverse groups, which can often provide insight into different cultures and underrepresented groups.
Employee engagement surveys: A classic tool to help organizations gain more insight into employee sentiments. Employee engagement surveys can help companies understand the experiences and perspectives of their employees and identify areas where they can improve in terms of diversity, equity, and inclusion.
Financial inclusion as a core DEI initiative
At the end of the day, the relationship between an employer and employee is a financial one. The key to creating a workplace conducive to diversity, equity and inclusion is to shift a larger focus on employee financial wellness: do you provide the right compensation packages and employee benefits to support each employee in an equitable and inclusive manner?
Re-evaluate your employee financial benefits and perks to make sure that you’re not unintentionally limiting access and opportunities for your BIPOC employees. Something as standard as 401(k) contribution matching may be unfairly benefiting just the white men within your company. Evaluate each company benefit using various metrics, including (but not limited to):
- Is it accessible? Does everyone have a fair chance at making full use of the benefit?
- Is it affordable? Are there systemic problems that might make it more expensive for someone?
- Does it fit in culturally with the all the peoples we represent at our company?
As with any DEI initiative, the key part is to make sure you engage constantly with your employees and to put their feedback into action. Make sure that that communication channels between senior leadership and HR/people ops teams are open and clear, and that you provide your teams with the resources and support to act on these initiatives.
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