11 Ways in Which DEI Impacts Businesses

More organizations are taking a hard look at diversity and inclusion in their workplace. But what is the need? First, these organizations want to strengthen and position diversity and inclusion practices to their competitive advantage. Second, in a significant shift, they want to reposition the diversity and inclusion discussion, moving it from the margins to one of the central tenets of their workplace culture.

Inclusion is directly proportional to belonging. You can never create a work culture where people feel a sense of belonging while not excluding them from being organizational insiders.

Importance of Belonging in the Workplace:

Mentioning D&I in your mission and vision statements is one thing, but it is another to live out those values in practice. When people deeply commit to driving diversity, equity, inclusion, and belonging in their workplace, they become more empathetic and engaged. This behaviour has a ripple effect, encouraging other employees to consider how they can bring D&I to their work as well, thereby turning the office into a more compassionate, productive place. Below, we dive into the concrete benefits you can expect because of embracing D&I at your company.

Builds a compelling Employee Value Proposition (EVP): A vast majority of candidates who apply today for a job posting today belong to the talent pool of millennials and Gen Z. If you are a believer in building bottom-up talent that grows with the culture of your workplace, then having a compelling EVP which aligns with D&I agenda is a non-negotiable business imperative.
Inclusivity in the workplace remains close to this segment of the talent pool. They are the drivers of change that will lead us to a quite different future. Studies show that three out of four decline a job offer if they do not find the new employer has invested visibly in demonstrating D&I as a part of its business strategy. Today, D&I has become a critical tool for employer branding, both internal as well as external.
Improves bias awareness: Because we are human, we bring even unconscious biases into our decision-making. Having a diverse workforce can bring biases to light. Establishing D&I in the workplace inherently makes people more aware when it comes to staffing projects, hiring talent, giving performance reviews, and more. When D&I is tracked and top of mind, everyone at the organization puts more emphasis on it, ensuring a more equal and inclusive environment for everyone.
Since hiring and recruitment bias can be especially detrimental to diverse talent acquisition—often where D&I starts—a data-driven approach to sourcing helps remove some unconscious bias where employees can connect and innovate.
Increases talent pool: Candidates will be less likely to apply for a job if they are not convinced employers care about D&I. Millennial and Gen Z professionals actively avoid companies without a diverse workforce, clear promotion track, or commitment to confronting systemic racism in their ranks. If you have scathing reviews on Glassdoor about unfair compensation, favouritism, or cliques, you are not going to attract the best candidates. By demonstrating that you take D&I seriously and consider it in every step of the recruiting, interviewing, onboarding, and employee growth process, you open yourself up to potential employees who might not have even considered your company before.
We serve diverse customers who are increasingly asking for diversity related RFPs. A part of your duty is also to find diverse candidates. If you do not know where to look for diverse candidates, you could potentially miss some of the top talents on the market.
Boosts employee engagement: It is no small matter to make sure everyone is included and feels that they are a valuable member of their team. When employees are welcomed and appreciated, they are bound to put more effort into their work, motivating their peers to do the same. Companies have found that simply by having a diverse workplace, employees collaborated 57% better with their peers, worked 12% harder, and were 19% more likely to stay with their organization longer. When employees are engaged, they are more likely to work as a team and collaborate cross-functionally, promoting a greater sense of belonging and inclusion.
Fosters innovation and creativity: People wear different hats at work. Having a diverse set of people in our critical task force, coming from diverse backgrounds, and having them included in a common agenda is most likely to stir up communication coming from varied experiences and perspectives. This provides a platform for wider discussion and most likely expands the scope of solutions as well. Many of these may be coming unexpectedly from some set of people whom you may have never considered earlier. Deconditioning the unconscious bias and fostering inclusivity can have a multi-fold effect on innovation. The needs of diverse groups bring different experiences and expectations to the surface, thus enabling a cumulative effect of creativity and innovation in the workplace.
Offers better decision-making: All teams benefit from having various perspectives and opinions. Without variance in thought, you end up with homogenous ideas, a boring work environment, and deficient performance. A team with different skills and experiences approaches problems more holistically, and as a result, tends to make better choices. The Society for Human Resource Management found that diverse teams are 87% better at decision-making than non-diverse teams.
Improves performance: Leadership has to reflect a diverse, equitable, and inclusive atmosphere for employees to feel like D&I is truly a priority. And when they do, it pays off. Employees perform better when they feel comfortable bringing their full selves to work, knowing others can offer the support and camaraderie they need to excel. Three McKinsey studies found that ethnically diverse companies had an edge of up to 36% more profitability, while companies with higher gender diversity had up to 25% better financially. One such longitudinal McKinsey study done in 2014, was done, and 2019 showed that gender-diverse teams outperformed others regarding performance by 15-25% and ethnically diverse teams by 33-36%.
Offers retention: Your competitor can establish the same products and services, but your competitor can never establish the same culture you offer to your people. It is a simple ground rule-if you feel valued, are equitably remunerated, and are included, belonging becomes a by-product of such cultures. Even if you may lose your person to a competition, chances are they will come back if you truly have made them feel being belonged to your organization.

Belonging = Diversity * Equity * Inclusion

Belonging is a function of diversity, equity, and inclusion (D&I). It deals with the qualities, experiences and work styles that make individuals unique (e.g., age, race, religion, disabilities, ethnicity) as well as how organizations can leverage those qualities in support of business objectives. It also includes matters that focus on diversity-related careers, communications, legal and regulatory issues, technology, metrics, outsourcing, effective diversity practices, and global diversity issues. It touches on but does not primarily deal with federal, state, and local equal employment opportunity (EEO) laws. These are encompassed under the EEO topic within both the staffing management function (for EEO matters arising in the pre-employment context) and the employee relations function (for EEO matters arising within the employer-employee relationship).

Studies show that teams or organizations made up of individuals with a diverse mix of qualities, experiences and work styles tend to have available a richer set of ideas, perspectives, and approaches to a business issue.

Organizations are now becoming more committed to recruiting, retaining, and promoting incredibly talented individuals, irrespective of their backgrounds and preferences to further their strategic goals. To achieve this, one must include employing best practices regarding D&I initiatives, benchmarked with globally reputed companies and institutes. Providing an environment of equality and respect for all employees, whether on a contract or third-party rolls is inevitable. The laws today also do not permit any kind of discrimination against any individuals based on their gender, age, disability, ethnicity, sexual orientation, family status, religious beliefs, and abilities. Ensuring fairness and avoiding unlawful discrimination in matters including remuneration, employment terms, and conditions, promotions, training, and development opportunities have become center stage for many organizations in India. But is this the best approach?

UpgradeHRM is the leading provider of a unified D&I platform with its state-of-the-art Integrated D&I - Business Impact Model. Globally, successful enterprises rely on UpgradeHRM's industry-recognized high-impact platform to develop and deploy complex, strategy-driven, and employee-engaging business applications. We unlock inclusive workplace culture with speed and agility for organizational change and cultural diversity transformation. We use evidence-based methods with scalable strategies and effective tools to transform an organization's culture and people while linking its DE&I strategy with the business. We offer continued education and business opportunities to DEIB enthusiasts through our online certifications and masterclasses.

Categories: : Business Impact