For good reason, diversity, equity, and inclusion continue to gain momentum. Processes and practices embedded with a DEI lens generate effective business results while also contributing to society’s betterment. As DEI efforts unfold, the benefits of adopting equitable DEI initiatives can’t be ignored.
Here are 8 reasons DEI is essential to your organization—aside from the fact that it makes good business sense to implement it.
What is DEI?
DEI stands for diversity, equity, and inclusion. Simply put, it involves creating an inclusive workplace that welcomes everyone.
Diversity opens the door, encouraging and welcoming people of different backgrounds, including:
- Ethnicity
- Sexual orientation
- Gender identity
- Other marginalized demographics
DEI strategy asks them to apply and participate in roles typically filled by one type of person.
Equity is the process of allocating resources and opportunities necessary to mitigate different circumstances, resulting in an equal outcome whenever possible.
Inclusion involves creating a work environment that fosters a sense of belonging, opening the door for everyone to participate. Chisel away at old stereotypes and make room at the table for top talent that may have previously felt as though they were not welcome.
The purpose of DEI initiatives is to give everyone a fair chance and call out and undo some of the hidden (and not so hidden) biases that have shaped our current societal structure.
Critics of DEI may argue that it amplifies traditionally marginalized groups by marginalizing others, which is missing the point. The goal here is inclusion: welcoming everyone to the proverbial table.
Why DEI is Important
Far from simply being a trendy buzzword, adopting a DEI strategy has been shown to help boost the bottom line.
But keep in mind that this should be done first and foremost because it’s the right thing to do; integrating DEI principles into your organization simply as an attempt to boost sales without caring about the ideology is sure to fall flat and may even backfire.
With that being said, here are some of the advantages, rewards, and benefits of DEI that businesses who’ve introduced it into their workplace through policies and culture typically experience.
1. Increased Creativity and Innovation
A diverse group of employees brings a much broader multi-dimensional perspective, which leads to better decision-making. This is essential for innovation, creativity, and problem-solving as a whole—and yields an unbeatable competitive advantage.
It’s pretty simple: if everyone thinks the same, there are a whole slew of possibilities and perspectives that are never considered.
Creativity and innovation thrive when approached from all angles; a diverse group of people is more likely to create something incredible.
This is backed up by studies: A diverse group of team members consistently ranks better than its less-diverse counterpart in all key business performance metrics. For example, they are 35% more likely to outperform competitors, 70% more likely to reach new markets, and on average, employee cash flow is 2.3 times more than that of less inclusive companies.
2. Improved Customer Representation
One of the unique facets of the USA is that it’s built by immigrants from around the world.
As such, the American population includes a wide, eclectic mix of people. Here, you find all sorts of backgrounds, ethnicities, and orientations. Yet frequently, advertising is directed towards only a singular group of the total population.
This is also applicable to targeting different generations. Management teams or a group of people aged 40 and above may have a harder time targeting Gen Z unless they have some insight from someone who’s part of that generation.
As DEI initiatives come into play, there comes a wider range of customer representation–including genuine first-hand awareness of the “pain points” of a wider demographic. These can be explicitly addressed in the features of the company’s product and service offerings.
Also, a diverse group of employees brings unique and valuable wisdom into the experience and needs of a broader population, highlighting some of the differences between market segments as well as their similarities.
As more inclusive work environments become mainstream, traditionally marginalized groups feel seen and heard — both within the workplace itself and through increased consumer-based products created with them in mind.
3. Increased Talent Pool
DEI initiatives expand the reach of the talent pool, targeting diverse potential employees with unique skill sets and vocational wisdom.
Fishing from the same pool that everyone goes to look for specific talent leads to expected results, which isn’t the best for those seeking to innovate in new and exciting ways.
Creativity feeds on an eclectic mix of experience and ideas. Putting together a team of people from all walks of life is an excellent strategy to ensure that what is created isn’t flat or one-dimensional.
4. Improved Sense of Safety
An environment that welcomes, respects, and prioritizes the well-being of everyone is a wonderful place to work. Employees feel a sense of safety and belonging; they’re free to be themselves and won’t be judged for who they are.
The positive impact of this is far-reaching.
Employees are less likely to be worried about hiding who they are, which relieves a lot of mental health-related stress and anxiety.
Naturally, this results in better:
- Employee retention
- Employee engagement
- A more favorable view of the company as a whole
It is also a colossal factor in maintaining employee motivation and serves to empower each with a sense of pride through their affiliation with the organization. This aligns with the values of making a positive impact in the world, in addition to producing cool things.
5. Better Regulatory Compliance
Most people are familiar with Title VII, an equal opportunity employment law prohibiting employers from employment discrimination based on gender, race, religion, sexual orientation, and nationality.
Title VII lawsuits are one of the most common filed against employers. A Title VII settlement can cost around $50,000 to $300,000, depending on the number of employees a particular company has.
The USA isn’t the only country with strict anti-discrimination laws, either. Companies that uphold DEI principles are far less likely to be subjected to discrimination-related litigation.
6. DEI Provides Increased Possibilities
For businesses looking to grow and expand into other countries, having a diverse workforce is an excellent way to highlight global perspectives and expand overseas. In fact, diverse companies are 45% more likely to report that they captured a larger portion of the market and 70% more likely to have entered a new market in the past year.
A diverse workforce can provide insight into various cultural nuances and taboos and educate on customs, behaviors, and common courtesies that are part of those cultures. Not to mention that a bilingual team can translate and provide language skills.
A diverse team may also pique the interest of investors who otherwise may not have been interested.
Many investors value companies built on the foundation of making the world a better place, actively seeking businesses with diverse cutting-edge teams of experts to sink their funds into. These investors are excited not only by the project but also by the possibilities likely to stem from such a well-represented group.
7. Stronger Employee Morale
Cultivating an inclusive culture boosts morale. Employees feel represented and appreciated, and as a result, they dedicate their time and energy to achieving results rather than dreaming up other job options.
Morale is an intrinsically motivating factor that can lead to some pretty epic outcomes. Making employee morale a priority should not be overlooked.
8. Decreased Groupthink
Groupthink is the phenomenon where people are too anxious to share their insights, even if they think something may not be the best idea. It is bred by a lack of diverse perspectives and creative insight.
A diverse workforce combined with a company culture that encourages everyone to speak opens up the floor for others to share their concerns on any given topic.
Tips for Implementing DEI Principles in Your Company
After seeing all the benefits of diversity, equity, and inclusion, most employers want to incorporate it into their organization.
Some hire experts — people who come in and give extensive seminars on the topic. There’s nothing wrong with that, as long as that’s not the only step taken.
Actions speak louder than words; the best way to weave DEI into your existing culture is to start by examining and updating the business playbook. Take a good, somewhat critical look at your standard operating procedures and see where room for improvement lies.
Ensure Leadership is on Board
This must be a team effort. Encourage management to discuss current practices that could be expanded or improved upon in all areas of business operations. The goal is to open the door for DEI within the workforce.
Pay Attention to Recruitment
What are the current recruitment processes, and which demographic typically responds to job listings?
What are some ways (strategies and alternatives) you can expand your reach and target a more diverse set of job seekers?
Take advantage of different career boards and networks when recruiting, and adopt a “blind” resume screening to reduce the chance of bias.
Check out Obsidi’s job board here!
Offer Mentorship
Can you pair new employees with executive teams in a mentorship-like setting? How about offering mentorship opportunities to underrepresented, frequently overlooked members of the community?
These are excellent ways to actually make a difference and bridge that widening gap by extending a helping hand.
Review Policies
Ensure that all policies comply with DEI principles, and be transparent about those policies.
Regularly audit the pay scale to ensure that no one is being paid more than someone else in the same position for any reason other than their tenure with the company or additional relevant qualifications, as outlined by the policy.
Be Aware of Implicit Bias
Snap judgments about someone or stereotypes are some of the ways biases commonly manifest. It’s an inescapable aspect of our biology — humans are wired to create associations and use these “shortcuts” to reach conclusions in threatening or otherwise uncomfortable situations.
That’s fine when it’s life or death, such as slamming on the brakes when a child steps in front of the car. Unfortunately, this folly can still trip people up when it comes to judgments about others.
One of the best ways to change these biases is to have a diverse workplace.
Give people the opportunity to get to know others who are different from them. As they begin to connect, they are very likely to have a more empathetic view of what life is like for different segments of the population.
They gain a deeper insight into struggles that particular group may face. Things they themselves would never have to consider.
Truly, the best way to break down barriers is through genuine interaction and connection.
Conclusion
A diverse workforce has been shown to increase performance and profitability, which, yes! That’s great for business, obviously.
But truthfully? There’s something truly powerful that occurs that extends far beyond monetary fulfillment.
By flinging open the doors and actually being that change this world so desperately needs, you demonstrate how incredible and impactful it is to provide an opportunity for everyone to participate.
This shows everyone that we see you! We care about you, and we welcome you. Exactly as you are.
