Equity, Diversity, and Inclusion (DEI) are top trends reshaping organizational structures at all levels. Indeed, the frequency with which CEOs talk about DEI issues has increased by 658% in the last three years. Although DEI is emerging, however, this concern is not new, as you can infer from the DEI global coverage shown in Figure 1. You may wonder why these dimensions are vital for firms and employees such that they will be the number one priority for HR executives in the near future.
The existing data suggest that embracing a DEI culture is indeed a good idea. As an example, according to a survey of 3,500 employees by Gartner Group, the performance of people who work in companies with “high fairness environments” rose by 26% in 2021 while resignation rates decreased in those companies by 27%, as compared to the rest. We will come back to the benefits of DEI later on.
In this blog post, Kodo People hopes to bring light to the rationale of the DEI notions and hence help you capture the value they can bring to your organization.
Understanding the concepts properly is a prerequisite to further fruitful discussion. To be all on the same page, let Kodo People define DEI for you:
When it comes to Diversity, we refer to any existing individual differences, including some common groupings such as those based on gender, race, ethnicity, nationality, socioeconomic status, language, disability, age, and religion, but it could also be about different thinking and behavioral styles, backgrounds, or perspectives.
Equity refers to justice, fairness, and opportunity for everyone (but not necessarily equality in outcomes). Equity is also about working to identify and eliminate barriers within the procedures, processes, and distribution of resources by institutions or systems.
Incubating from diversity and equity, Inclusion is associated with being welcomed, respected, and valued in the workplace. Leaning on the grounds of accountability and commitment throughout the organization, Inclusion ensures the development opportunities and resources are accessible for all and thus, upholds a sense of belonging in which everyone is able to participate fully in decision-making processes.
Why do we (want to) care about this? Is it just because of the trendiness of DEI that we should pay more attention to it? Absolutely not!
DEI contributes an enormous amount to companies’ growth as it helps establish a welcoming climate where people, regardless of their position, as cells of the body, all cooperate towards the company’s goals. The impact of DEI in different industries or sectors, of course, varies. Still, there’re key benefits of DEI that tend to arise across contexts:
- The likelihood of hitting financial and business goals increases radically: striving to set workplace DEI is not an empty slogan — it is a good business decision which is evident in multiple studies. Along these lines, a recent study about workplace diversity by the American Sociological Association found that gender diversity accounted for a tremendous difference in mean revenue between high-diversity ($644.3M) and low-diversity companies ($45.2M). The impact on profits and customers are also substantial.
- Derive great competitive advantage from faster innovation: obviously, the more ideas, the more creativity. There is a bias by which people think that they will feel more at ease working with someone who shares the same background and that this will boost productivity. Don’t be fooled by your comfort! The results from 7,615 firms participating in the London Annual Business Survey revealed that businesses run by culturally diverse leadership teams are more likely to develop new products than those with homogenous leaders.
- Harmonize individuals and align forces: once a strong DEI culture is set, any conundrum the firm faces now becomes everyone’s pain so that they would pour blood, sweat, and tears to digest it. An article published in Personality and Social Psychology Bulletin suggests that diverse teams may outperform homogeneous ones in breadth and motivation. Even though teams with out-group newcomers initially felt less confident about the accuracy of their joint decisions, they finally obtained better outcomes.
As you can see, DEI has been drawing lots of attention from both scholars and managerial experts. Undoubtedly, leaders are eager to impose DEI policies on their companies. Despite their fair efforts, however, previous data indicates that the result is often not as successful as leaders and organizations had envisioned. The authors of “Elevating Equity: The Real Story of Diversity and Inclusion”, analyzing more than 80 different practices across 800 organizations, found that only 12% of companies hold managers responsible for recruiting diverse candidates.
Only 12% of companies hold managers responsible for recruiting diverse candidates.
Therefore, DEI should be integrated as a business function with a well-defined strategy, owned by everybody in the organization, and supported by capable experts. This synthetic approach requires a dedicated focus from the managing board, an HR department that knows how to drive DEI forward, and employees who are fully aware of their rights.
If you want to benchmark your organization’s response to DEI, here are Kodo People´s tips:
1. Navigate how important DEI is in your organization.
Is there a concern for DEI in your organization? Is your company taking advantage of the unique potential that is achieved by integrating these values?
If you want to take the opportunity of creating more agile and resilient teamwork, DEI values should be in first place. By increasing Diversity in your teams, you will get a broader range of points of view, mentalities, and approaches to any business issue.
2. Appraise the current DEI scheme.
Before designing and implementing an appropriate strategy, it is necessary to know the current state of these three concepts within your company. Can you find diversity in teamwork? Do your employees feel that they all have the same opportunities? Are they concerned about the importance of creating a space where DEI are integrated?
Collecting all this information is important to establish a channel through which we can obtain feedback, for example through surveys or personal interviews with employees.
It is important to have all this information before implementing your strategy, but it is also important to keep the feedback after implementation in order to know if our program has been resolving exclusion, discrimination, harassment, etc. and if it is accessible for all members’ workplace.
3. Communicate the strategies for achieving DEI.
Once you design the DEI strategy that your company will follow, it’s fundamental to communicate this progress to all members and show them incentives.
To implement this flow of information, you can use formal channels such as email or the digital tools typically used in the company (Slack, Microsoft Teams, etc.). But informal communication also plays a key role here!
Keeping such internal communication is essential to complete the DEI process successfully, as it keeps your employees and the company accountable to your results. Talking about goals and progress steadily shows the actual commitment to DEI values, encouraging other people to adhere to these values and take them seriously.
4. Ensure DEI representation in every level of the organization and, if possible, set an inclusion council.
Although DEI upgrades the working environment, it compromises the incumbent privileges, and thus irritates some. That’s why leaders need to be aware of any resistance and attempt to eradicate unnecessary emotional workplace norms, otherwise, DEI might end up being implemented in a piecemeal fashion. Flexible working schemes can contribute to appropriate representation.
To avoid any confusion about leaders’ intentions, companies must utilize every possible vehicle to guarantee DEI in the everyday life of their people. One way is by showing employees DEI is legitimated by the leaders. Given that the leadership teams are seen as a reference by the rest of the employees, an inclusion council would be a great incentive to allow the best candidates to thrive for any job promotion, regardless of their individual characteristics.
5. Leverage DEI recruitment and onboarding.
The multi-prong approach that DEI requires also considers job candidates and potential employees: ensure that all candidates are given equal opportunity to be hired and that, regardless of their background, they are treated evenly.
You should also strive to remove biases from the recruitment process as much as possible to ensure that personal opinions do not cloud judgment. This can be accomplished through the use of unbiased behavioral assessments (like the Kodo People TA tool; see more info here), structured interviews, blind short listing, and collaborative hiring (e.g., Recruit Disability locates potential employees with disabilities, whereas HBCU is a network of students and alumni from Historically Black Colleges and Universities), making underrepresented groups more accessible and more widely relevant.
6. Provide DEI targeted internships, mentorship, & scholarships.
Talents are scattered everywhere, also among people in disadvantaged positions. By providing high-value internships, mentorship, and scholarships, you give people from under-represented groups the opportunity of growing inside the company. These initiatives promote equal opportunities, involve diversity, and create closer employee relationships.
Uncover the “hidden talent”!
Additionally, these practices empower your company’s reputation and employer branding, and transmit the DEI positive effects not only to the company itself but also to the (to-be) employee, the central factor in this evolution. As said, the benefits should be for all parties involved.
If you really want to integrate DEI in your organization as a leader, focusing on DEI in the partner, supplier, and customer dimensions or setting a DEI vision and frequently communicating progress are necessary but not sufficient conditions. It is a “must” to attend to your workforce – a vital component in the whole ecosystem surrounding your company. This is because their individual as well as collective tastes and inclinations, as revealed by their behaviors, drive and determine organizational processes, systems, structures, and culture. Therefore, behavioral measurement is essential. Adhering to your needs, Kodo People´s solutions based on behavioral economics assessments help eradicate recruiter’s biases and can crucially enhance DEI outputs in organizations.