Attracting top talent can be a challenge when it comes to building a successful organization — and then you have to retain it.
Part of holding onto your staff is ensuring your employees feel valued, welcome, and respected, and one way to do this is through a strong commitment to diversity, equity, and inclusion—also known as DEI.
In fact, a company’s commitment to DEI can result in even more benefits than sourcing talent and building effective teams. Utilizing a diversity, equity, and inclusion strategy can give your organization an edge over competitors and strengthen your bottom line. Let’s dig into how, and discuss nine key benefits to DE&I in the workplace.
What is DEI?
Diversity, equity, and inclusion are often lumped together or used interchangeably, but these are four distinct parts.
- Diversity refers to a wide and varying range of groups within a community or population—think ethnicity, religion, abilities, sexual orientation, and other dimensions of diversity.
- Inclusion is the active engagement of all members of that community or population.
- Equity is the fair and just treatment of those members regardless of how they identify.
- And belonging, a fourth factor in many diversity initiatives, is when you feel like you can be your authentic self, no matter how different you may be from the people around you.
Each DEI element is important, and they are all deeply interconnected. But there are differences. For example, a diverse population is not automatically inclusive or equitable. Similarly, an inclusive community is not always diverse.
To successfully bring DEI to your organization, the three must be integrated into every aspect of the workplace. Only then will you and your employees reap the benefits.
How is DEI Connected to Company Culture?
A company’s culture is more or less its identity, and it affects everything from employee retention rates to how the staff answers the phones. While the upper portion of an organization’s hierarchy might direct its company culture, it requires buy-in throughout the workforce for it to play out as expected.
Organizations incorporate DEI into their culture. When implemented correctly, diversity, equity, and inclusion foster cohesiveness among employees and management and a healthy work environment. As a result of creating a united workforce through DEI, a business increases its chances of success in establishing its desired company culture. Business results follow, as we will get into in a moment.
Nine Benefits of DEI in the Workplace
From improving employee productivity and creativity to reducing turnover rates and creating a more positive company culture, strong DEI can also be good for business. Here are nine benefits it has for your business.
1) Reach a More Extensive and Inclusive Talent Pool
As the workforce evolves, the importance of diversity, equity, and inclusion in the workplace is becoming more evident. Businesses are embracing DEI and finding that they can tap into a vast pool of talent they might have otherwise missed out on.
By focusing on DEI, you can create a more diverse and inclusive environment that attracts top talent from various backgrounds. And the more diverse your team, the more diverse the talent pool can become from their referrals. Additionally, DE&I initiatives can help develop a more substantial pipeline of qualified candidates and create a more positive employer brand.
In short, when your organization has a diverse, inclusive, and equitable environment, it is better positioned to attract and retain premier talent.
2) Diverse Workplace Teams Are More Likely to Perform Better Financially
Research has found that diverse teams are more likely to outperform their less diverse counterparts.
Gartner found that 75% of companies with “frontline decision-making teams reflecting a diverse and inclusive culture” exceed their financial targets. They also found that “gender-diverse and inclusive teams outperformed gender-homogeneous, less inclusive teams by 50%, on average.”
They found that this is because ethnically diverse executive teams bring a wider range of perspectives and experiences as well as varied thought to the table, which can lead to more innovative thinking and better decision-making.
A more diverse team can be more effective at identifying new opportunities and exploring different markets simply because they are aware of other options. They are more resourceful, positioning diverse teams to be better at finding untapped potential and driving growth for your organization.
3) DEI Fosters A Sense of Belonging for Employees
Fostering an environment of diversity, equity, and inclusion inherently promotes a healthier workplace for employees. People of various backgrounds will feel accepted and willing to work with each other as their true selves. This is the belonging we talked about earlier!
Among them, employees are likely to stay with the company longer when they are happy. Employee retention is fiscally efficient—it saves companies from having to spend time and money on hiring and onboarding new workers. Additionally, retaining employees maintains a sense of stability within the organization.
4) Higher Employee Retention and Lower Turnover
Retention and turnover can be challenges for any employer. Churn can be frustrating and costly, and often impacts the bottom line—another reason employers are adding focus on DEI in 2023.
When done correctly and honestly, DE&I can increase retention and reduce turnover, making it increasingly important in the business world. According to Deloitte’s 2020 Millennial Survey, Millennials, the largest generation in the U.S. labor force, said they would stay longer with firms that appreciate the demands of a diversified workforce.
Over one-third of workers also said they’d change jobs to join a more inclusive team.
By building creating diverse and inclusive teams, you can encourage your employees to stay with the company longer. Happy employees are less likely to leave, and new hires are expensive to train, so the company might even save money in the long run.
5) Diverse Workplaces Breed Innovation
A strong DEI strategy is something any company that wants to foster innovation and creativity should be thinking about.
Companies must adapt quickly to new trends and challenges in today’s rapidly changing marketplace. A diverse workforce in thought and experience is better equipped to identify opportunities and generate innovative solutions. By valuing and respecting the unique perspectives of all employees, DEI allows your business to tap into a wider pool of ideas and solutions.
6) Inclusion Can Improve Business Decision-Making
A diverse workforce is likelier to make decisions that will benefit the people who patronize the business. The more the makeup of the organization reflects the world at large, the better its people will understand what their customers appreciate in their products and services.
Developing an employee base that understands all walks of society and giving them an opportunity to express their opinions when questions arise will lead to improved discussions and decisions that will ultimately benefit the company.
7) Equity And Inclusion Can Tackle Workplace Burnout
A 2022 survey found that nearly 80% of employees recently felt workplace stress, and 60% said that stress had negative impacts on them. This widespread feeling can lead to negative consequences such as decreased productivity, increased absenteeism, and heightened stress levels.
A more inclusive workplace can where diverse employees feel they are being treated equitably can help reduce the incidence of burnout by building a more positive workplace culture. This can also further improve employee morale and motivation.
8) Creates Competitive Business Advantage
DEI strategy can create a competitive advantage for businesses. In today’s global marketplace, many customers and employees are seeking out organizations that reflect their values. In 2021, Gartner found that more employees were soul searching and thinking about where work fit into their lives—some 65 percent. Part of that was how they could better contribute to society. Feeling valued and offering value to others is becoming more of a focus.
Research has also shown that organizations with diverse teams are 33% more likely to outperform their rivals in profitability.
By creating a workplace that is truly inclusive of all people, businesses can be part of those conversations with employees — and tap into new and diverse markets for talent. As the business world becomes increasingly competitive, those with a strong DEI strategy will be well-positioned to succeed.
9) DEI Protects Company Culture
Industries and markets are constantly changing. For a company to thrive in the long term, remaining stagnant is not an option — it must adapt to these shifts. Doing so requires an understanding of emerging markets and a collective effort by willing employees.
A diverse group is better equipped to understand a wider range of market issues that the company needs to address. It will also have more insight into how changes in policies, products, or services will affect its customers and be perceived by the public. The team’s cohesiveness will help the company ride these waves of change and determine the best path forward.
Effectively Measuring DE&I in the Workplace
Now that we’ve addressed the value in a more diverse and inclusive environment, let’s talk about how to start improving DEI in a company. By measuring DE&I in the workplace, organizations can better understand where they need to improve and take steps to create an inclusive environment.
There are a few key metrics that organizations can use to gauge DEI in an organization.
- Look at the representation of different groups within the company. This includes percentage of employees from underrepresented groups, age, genders, or differing abilities or the ratio of women to men in leadership positions, etc.
- Conduct regular DEI surveys to ensure that the company is properly and effectively implementing these values in the workplace. Use an outside consultant or firm to help with developing the survey and analyzing the results. It is also valuable to create additional DEI surveys specifically for leadership.
- Assess the impact of DEI initiatives by looking at changes in company culture, employee behavior, etc.
How Do I Create a DE&I Strategy?
There’s no one-size-fits-all answer to this question since the best way to create a DEI strategy will vary depending on an organization’s needs. However, there are a few key steps that any business could take when developing a DEI strategy.
- Assess the current diversity, equity, and inclusion situation.
- Identify areas where the organization can improve.
- Develop action plans for improvement and set concrete goals and objectives.
- Implement the plan and measure its effectiveness over time.
- Make sure there is accountability to sticking to the goals
Following these steps, any business owner or HR leader can develop a tailored DEI strategy to help their business and foster a more inclusive environment.
Always Have DE&I In Mind
Whether you’re looking to make your next hire or level up your day-to-day leadership, keeping diversity, equity, and inclusion in mind can have a positive impact on your staff and your business. With a thoughtful and well-executed DEI strategy, you and your teams can work together to create a strong culture long-term. Plus, it can help your business retain talent, drive growth, and give your company a competitive hiring edge.
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