For those who believe a DEI (Diversity, Equity, Inclusion) strategy is a “warm and fuzzy” thing to do for good PR and to keep some people happy, listen up. Multiple studies* find that employers who commit to hiring, engaging, promoting and retaining a diverse group of employees (aka DEI), outperform their industry averages. Put simply, investing time, energy and funds into DEI is a smart business decision.
The benefits of a diverse workforce, and a diverse leadership group in particular, appears to be related to the unique life experiences and perspectives each person brings. As well, diversity may reduce “group think” that is common among homogenous groups that fails to provide a rigorous evaluation of ideas and alternatives. In times of disruption, like the current pandemic, this is crucial to an organization’s ability to pivot to effectively respond and explore new business models.
An effective DEI strategy is not easy, with plenty of pitfalls to avoid. Based on a review of three recent surveys, here are important considerations for any employer who allocates resources to a DEI strategy and expects a bottom line ROI.
Diversity is a start, the but not the end. Simply hiring a bunch of people with diverse ages, genders, races, experiences, etc., is not enough to magically create the desired ROI. Once hired, it is the culture that will make or break the DEI strategy. If a workplace culture lacks supports for diverse employees, the internal talent pipeline will be “leaky”; diverse hires will leave fairly quickly to pursue their careers elsewhere, diminishing the employer’s succession planning efforts to boost diverse leaders. The desired ROI may never materialize. Diversity take work.
Equity in a workplace culture has many dimensions. One is pay equity; are employees paid fairly and equitably compared with co-workers? Equity also means each employee having what they need to succeed; will leaders/ managers/ supervisors make an effort to be flexible, listen to employees, and identify and remove barriers to their success? This approach to equity may sound to time consuming and exhausting; after all, a “one size fits all” approach is efficient and operationally simple. But if the goal is to improve outcomes, consider this an investment in unleashing human potential in order to achieve desired results. Equity takes work.
Inclusion requires leaders make a mindful commitment and take purposeful action to create a workplace culture that welcomes a diverse workforce to feel safe in all ways (physically, psychologically, emotionally, socially), and contribute their unique skills and “gifts”. It will not magically happen. Leaders who make Inclusion a strategic priority and model it daily, will infuse their cultures with a spirt of inclusivity that sets the bar for all levels of the organization. Leaders who purposefully and meaningfully surround themselves with diverse employees, make it safe for them to present diverse perspectives that are respectfully explored. Inclusion takes work.
ROI, in the context of a DEI strategy, results from the continuous and sustained presence of diverse perspectives shared in an inclusive workplace culture. The data shows the decisions made in such environments result in better business outcomes. For all organizations willing to do the work and move forward successfully into 2021, this equation is worth considering: D+E+I = ROI.
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World at Work: Workplace Equity Study
Diversity in Financial Markets, sponsored by the Chicago Federal Reserve and the Futures Industry Association