Diversity, Equity and Inclusion in Workplaces Matter

"We are building products that people with very diverse backgrounds use, and I think we all want our company makeup to reflect the makeup of the people who use our products."
-Sheryl Sandberg

Diversity, Equity, and Inclusion (DEI) have become social, political, and moral imperatives in contemporary workplaces. Social changes due to the global Covid-19 pandemic, the Me Too movement, Black Lives Matter, and workers' rights movements are making an indelible mark on work. At the same time, employees want their unique values, culture, ethnicity, and opinions respected and acknowledged. Research shows that organizations take DEI issues and their implementation seriously because it matters.

Research conducted by Harvard Business Review, Analytical Services in 2019 on 1,115 North American leaders showed that 65% of respondents stated that diversity, equity, and inclusion are highly strategic priorities. Additionally, Glassdoor research conducted in 2017 showed that 69% of executives rated Diversity and Inclusion as essential issues, up 32% from 2014. Similarly, Gartner data showed that the demand for recruiters trained in diversity hiring jumped 800% from 2017-18 to 2019-20.

Consequently, the CEO Action for Diversity and Inclusion Pledge is the most significant CEO-driven business commitment to advance DEI within workplaces. As of 2022, over 2,400 CEOs from all sectors and industries signed the pledge, supporting a more inclusive workplace for employees, communities, and society. It includes increasing diversity in hiring and leadership, promoting an inclusive culture, and implementing employee training programs. The pledge also includes the creation of a virtual hub for sharing best practices and resources related to DEI.

Diversity, Equity, and Inclusion at Workplaces

Along with the policies formulated by corporations and organizations, the US Government has also provided legal clarifications and guidelines for implementing DEI, which indicate programs, policies, and strategies for inclusive and equitable conditions for diverse workforces. In June 2021, President Biden signed an Executive Order requiring federal agencies to increase DEI. The order also established a White House Office of Diversity and Inclusion to lead the efforts and create an accountability system to track progress and provided guidelines of DEI concepts:

"...diversity means the practice of including the many communities, identities, races, ethnicities, backgrounds, abilities, cultures, and beliefs of the American people, including underserved communities."

"...equity means the consistent and systematic fair, just, and impartial treatment of all individuals, including individuals who belong to underserved communities that have been denied such treatment."

"...inclusion means the recognition, appreciation, and use of the talents and skills of employees of all backgrounds." (The Whitehouse.Gov)

Likewise, the Harvard Business Review Analytic Services defines DEI concepts as follows:

Diversity: Having a heterogeneous mix of identities (race, ethnicity, nationality, gender, gender identity, veteran status, physical and cognitive ability, age, sexual orientation, socioeconomic class, experience, etc.).

Equity: Regardless of identity, all employees are compensated fairly and have the opportunity and support to succeed and grow in their jobs.

Inclusion: The identities of all employees are respected and valued. Employees have the opportunity to participate and contribute regardless of their identity.

Hence, diversity refers to characteristics such as race, ethnicity, gender, age, national origin, religion, sexual orientation, and physical abilities. Equity is the fair treatment and access to resources and support regardless of workers' background or identity. Inclusion signifies active, intentional, continuing engagement and creating an environment where all people feel welcome, valued, and supported.

DEI Movement in the USA

Rooted in the struggles for equality and justice, the DEI has its basis in multiple social, civil rights, and anti-discrimination movements of the 1960s. These movements led to the formation and implementation of mandatory laws by federal and state governments to enhance social justice, overcome systemic inequalities, boost employee engagement, and make the workplace unbiased.

Major laws to impact the DEI movement are The Equal Pay Act of 1963, The Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, and The Age Discrimination in Employment Act of 1967. Additionally, "The Village Voice" became the first Company to bargain for employees in same-gender relationships in 1982.

Another vital factor that led to DEI's popularity in workplaces was that employees started taking employers to court for lack of compliance with laws. In 1996, Texaco settled a lawsuit with its Black Employees for $176.1 million. The New York Times documented that "Morgan Stanley agreed to pay $54 million to settle a sex discrimination case rather than stand trial on the federal government's accusation that it denied equal pay and promotions to women in a division of its investment bank." Additionally, Merrill Lynch and Smith Barney paid more than $200 million to compensate their women employees. Furthermore, multiple Wall Street firms have regularly defended themselves against complaints of discrimination. These discriminatory practices by employers led to mandatory action by the US Government and Executive Order 14035: Diversity, Equity, Inclusion, and Accessibility in the Federal Workforce. The order was to promote a workforce depicting the diversity of the nation.

The power of such legislation had an impact on the attitudes, values, and work ethics of Gen X and Millennials. These younger generations wanted workplaces to be equal and were the first to accept differences in race, ethnicity, national origin, family structures, and lifestyle. According to Pew Research, the Gen Z generation is even more racially and ethnically diverse than previous generations, and they demand their workplaces project the same. As a result, the implementation of DEI in the workplace became a requirement.

Strategies for Implementing Diversity, Equity, and Inclusion

"Too many companies don't know how to walk the walk of diversity, equity, and inclusion..."
-Lori George Billingsley, former Global Chief DEI Officer, Coca-Cola Company

Strategies for implementing DEI depend on companies' policies and practices. Thus, it may be the responsibility of the Human Resource Department (HR) or the Chief Diversity Officer. Businesses are spending substantial resources to implement DEI. McKinsey's research report of 2017 documented that companies in the United States spend about 8 billion per year on DEI training. Still, the companies have yet to show substantial results after that investment. The question is, why are such policies and programs not effective? A Harvard Business Review (HBR) research article states that the problem is with the tools used:

"...organizations are trying to reduce bias with the same kinds of programs they've been using since the 1960s. And the usual tools - diversity training, hiring tests, performance ratings, grievance systems - tend to make things worse, not better."

Researchers concluded that the conventional tools of the 1960s were more for compliance with laws to prevent lawsuits, force-feeding strategies, and examples of control rather than making employees participatory in the process. Such policies "activate bias rather than stamp it out...people often rebel against rules to assert their autonomy." Times have changed, and tools to implement DEI need to be updated.

Multiple organizations and experts have come up with DEI implementation. One such approach was developed in 2021 by the Society of Human Resource Management (SHRM). In addition, articles in the Harvard Business Review and the Gallup Center Report of 2021 provide specific suggestions, which can be summarized as follows.

Specific Actions to Implement DEI

"You've got to run DEI like a business function, not like an HR Program"
-Kathi Endres, The Josh Bersin Company

• Implementation should start with top leaders, board members, and managers. Leaders must formulate and specify policies to demonstrate their commitment and exemplify what they are trying to advocate. This collective effort would ensure everyone is on the same pace and path.
• Compiling employees' quantitative and qualitative demographic data is essential for planning programs. This information will demonstrate the status of a company and indicate where they want to be in the future. Furthermore, data should form the basis for creating DEI metrics that are concrete, specific, and time-based. Such metrics will establish benchmarks, evaluate progress, identify interventions, make corrections, and check accountability.
• Accountability for implementation is vital to measure its success. Therefore, leaders and employees should be evaluated on criteria specified in data-based metrics. For instance, Starbucks has data-driven performance indicators to advance its commitment to DEI. Similarly, BBC evaluates leaders' performance:"we will look at your overall team engagement scores; how you improved the diversity of your team; and how you created an environment where we treat everyone fairly and equally."
• Forming teams and establishing clear communication and collaboration channels are vital. Human Resources Departments, Employee Resource Groups, Diversity Officers, Community Organizations, and Task Forces with diverse employees are indispensable to promoting DEI.
• Mentorship is especially beneficial for new employees or from underrepresented groups. Having a mentor can provide guidance, support, and a sense of belonging, which can be important for people who may feel isolated or uncertain about their place in the organization. Mentorship can be career mentoring by the senior members of a company or peer-to-peer mentorship, where employees of different backgrounds come together. They can support and learn from each another and develop a feeling of belonging.
• DEI programs can help to minimize unconscious biases, racism, sexism, and microaggressions, which can be barriers to progress for workers and companies.

Diversity, equity, and inclusion should be an ongoing and integral part of an organization's culture rather than a one-time or short-term intervention. Leaders, managers, and employees need to be actively involved in the planning and implementation of DEI initiatives to create a sense of ownership and commitment. Diverse and inclusive workplaces enhance a favorable environment, increasing creativity, innovation, and productivity.

DEI Enhances Productivity and Innovations

A diverse group of people with different backgrounds, perspectives, and experiences can lead to a broader range of ideas, increasing productivity and innovations. In addition, effective DEI interventions lead to financial, social, and psychological benefits. McKinsey & Company's research report for 2018 states that:

• Companies with gender diversity in the top quartile of their executive teams were 21% more likely to achieve above-average profitability. In contrast, companies in the bottom quartile were 29% less likely to attain profitability.
• Organizations with ethnic and cultural diversity are 33% more likely to outperform their industries lacking it.

Similarly, the World Economic Forum's report of 2020 states that "companies leading their geography and industry for diversity, equity, inclusion, and belonging perform better than their market average across a wide range of performance metrics." This report cites that companies integrating DEI increase their profitability by 25% - 36%, and innovations go up by 20%.

DEI creates an inclusive work environment where employees feel valued and supported. It improves morale and encourages creativity. When workers feel like they belong, they can project their real identity at the workplace; they are more motivated and committed. McKinsey & Company's 2020 report on Diversity Wins - How Inclusion Matters: "The business case for Inclusion and Diversity (I&D) is stronger than ever. For diverse companies, the likelihood of outperforming industry peers on profitability has increased over time..."

DEI initiatives reduce groupthink as homogenous groups may have less potential for generating new and unique ideas due to their similar ways of thinking. Additionally, DEI initiatives can help organizations attract and retain top talent. Ultimately, DEI initiatives positively impact organizations' culture, leading to improved productivity and innovations.

Conclusion

Diversity, equity, and inclusion at workplaces are vital to protecting employees' human, civil, and workers' rights. When employees feel valued and respected, they are more engaged and motivated, resulting in increased productivity and better business results. Inclusive workplaces also tend to be more innovative, as diverse perspectives and experiences lead to new and creative solutions.

Contemporary workplaces need to adapt to the changing needs and values of Millennials and Gen Z. The 2018 Deloitte Millennial Survey states, "millennials will make up almost 75% of the workforce by 2025," and "83 percent of millennials feel empowered and engaged in the workplace when they believe their company fosters an authentically inclusive culture."

As societies become more diverse, companies must recognize and value their employees' diverse cultures, values, and experiences. In addition, companies need to formulate quantitative metrics and establish accountabilities in the decision-making process. Finally, communication and collaboration within companies to achieve quantitative goals are vital for the successful implementation of any such program. According to Adelmise Roseme Warner, Senior Director, Global Employee Relations at Apple: "Organizations simply cannot pay lip service to DEI. It's clear that new, improved, and equitable processes need to be woven into the fabric of our businesses, and the time to act is now."

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