Despite having received their fair share of backlash (and these days, what hasn’t?), diversity, equity and inclusion initiatives have been proven to be beneficial for both employees and employers alike.
Indeed, numerous studies have uncovered the benefits of such efforts on an individual and collective level. From enhanced creativity and innovation to improved financial performance, DEI can play a pivotal role in a company’s success.
So, let’s talk about it: what’s the exact definition of DEI, what are its biggest advantages, and how can you go about promoting it?
What is diversity and inclusion?
Diversity, equity and inclusion (or DEI, for short) efforts refer to an employer’s commitment to interviewing, hiring and training people from all walks of life — regardless of characteristics such as race, ethnicity, age, faith, disability, sexuality and gender.
However, it goes beyond considering and onboarding candidates with diverse identities: what happens after hiring is just as essential. No DEI strategy can be considered complete without the provision of equal access to resources and opportunities for growth for everyone on the team. Without this, discrimination can continue to exist even across a diversified team.
Types of diversity in the workplace
There are five main types of diversity that can be encountered in the workplace (provided that an employer is committed to providing equal hiring opportunities!). These are:
Racial diversity
Race refers to the categorization of people into groups based on shared physical characteristics including facial features and skin color. At times, the term can also imply cultural or social identity similarities. Some examples of different races include Black, White and Asian.
In recent years, researchers have started rejecting the idea that race is biological, with many calling it a social construct instead.
Cultural diversity
Cultural diversity in the workplace refers to employing people belonging to various social or ethnic groups, representing different cultures.
In the words of anthropologist James Spradley: “Culture is the acquired knowledge people use to interpret experience and generate behavior.” If we were to expand on that a little further, we could say that culture refers to the various ways and aspects of life that get passed down from one generation to another, including beliefs, institutions, religion, knowledge, arts, laws, habits and traditions.
Age diversity
More straightforward to define than racial and cultural diversity, age diversity refers to providing opportunities to employees belonging to different generations. Currently, the US workforce is divided as follows:
- Silent Generation (2%)
- Baby Boomers (18.6%)
- Generation X (34.8%)
- Millennials (38.6%)
- Gen Z (6.1%)
Sex / Gender / Sexual orientation
Sex and gender diversity is frequently used to refer to how many men and women are employed by a company. However, for many people, gender is not so black-and-white: according to UCLA’s Williams Institute, a policy research institute, an estimated 11% of LGBTQ+ adults in the US identify as nonbinary. Nonbinary identities include agender, androgynous and genderfluid.
Likewise, sexuality is also experienced as a spectrum by many.
Disability
According to the World Health Organization, an estimated 15% of the world’s population lives with some type of disability. Of those, up to 4% experience significant challenges in functioning.
Although many assume that disability is visible, in the majority of cases (around 70–80%) disability cannot be seen.
Why is diversity and inclusion important?
Diversity, equity and inclusion in the workplace can positively impact employee experience, which in turn benefits team productivity and performance. Let’s look at 10 advantages of hiring diverse teams.
1. It increases innovation
Bringing together people from various backgrounds and age groups means you can increase the number of perspectives and ideas around the table. The way we think is largely influenced by our experiences, and the more diverse these are across your teams, the more that can boost brainstorming and creativity on a collective level.
The same holds true where leadership is concerned. According to management consulting firm BCG: “Companies with above-average diversity on their management teams [...] report innovation revenue 19 percentage points higher than companies with below-average leadership diversity.”
2. It improves problem solving
Cognitively diverse teams have been proven to be faster and better at problem solving compared to teams lacking cognitive diversity.
In the words of Alison Reynolds and David Lewis, who co-authored an article for the Harvard Business Review: “Tackling new challenges requires a balance between applying what we know and discovering what we don’t know that might be useful. [...] A high degree of cognitive diversity could generate accelerated learning and performance in the face of new, uncertain and complex situations.”
3. It improves decision making
Research has shown that diversity in the workplace can translate into improved creativity, innovation and problem solving. It’s only expected, then, that these can positively impact decision making, making it more efficient and effective.
Another study carried out by the team at decision intelligence platform Cloverpop showed the following:
- Inclusive decision-making leads to decisions being made two times faster
- Decisions made and executed by inclusive teams achieve 60% better results
- Diverse teams make better business decisions up to 87% of the time
4. It boosts financial performance
Thanks to the enhanced innovation, problem solving and decision making it facilitates, diversity in the office can improve a company’s financial performance. BCG’s research data supports this, and it holds true not just in the US: their analysis, mentioned previously, has looked at workforces in 16 countries.
5. It boosts your reputation
Companies can’t get very far without a good reputation. Their success is too closely tied with what prospective and established clients or customers make of them.
As stated in Deloitte’s Diversity, Equity, and Inclusion Across the Consumer Value Chain report: “It is no secret that consumers are becoming increasingly socially conscious, and many expect brands and organizations they frequent to reflect their social values.
“The past few years have highlighted the importance of diversity and addressing systemic racism globally. Incorporating diversity, equity and inclusion has become both a business and moral imperative, now more than ever.”
6. It nurtures a positive employee experience
As time goes by, more people are becoming vocal about subjects, experiences and issues that were not as talked about or well understood in the past, from gender expression to mental health challenges and beyond.
The likelihood of hiring people who embrace — or advocate for — identities that were once not as widely accepted is, therefore, much higher in present times.
Creating a safe environment that allows people to turn up as they are will only work in your favor. It leads to a healthy work environment built on certain values, such as respect and fairness, encouraging people to feel more relaxed in the office instead of tense, anxious or fearful.
7. It increases job satisfaction
When employees feel safe, respected and embraced, they can perform at their best. Feeling good in the workplace as an employee, knowing that your employer supports and invests in you and your colleagues, can determine how much commitment and respect you show back in return.
On the other hand, employers who fail to make their employees feel accepted and supported suffer the consequences of lower job satisfaction. These include increased absenteeism or presenteeism, decreased productivity, and higher turnover.
8. It reduces voluntary turnover
Drawing from its BLISS (Bias-Free, Leadership, Inclusion, Safety, and Support) Index report, BCG states that “Employees who witness or experience discrimination, bias or disrespect are nearly 1.4 times more likely to quit their job.”
At a time when job hopping is becoming increasingly more common, especially among younger workers, retaining your best employees is imperative, as it saves you time and resources. After all, replacing an employee can end up costing businesses one-half to two times the employee’s annual salary.
9. It enhances productivity
Slack’s The State of Work in 2023 report showed that employee happiness and satisfaction play a vital role in preserving their productivity. Of the 18,000 survey respondents, 82% identified feeling happy and engaged at work as a key driver of their productivity.
At the same time, stats by Gallup’s State of the Global Workplace report indicate that disengaged employees cost the global economy $8.8 trillion each year.
With these figures in mind, it’s easy to see why companies should ensure they’re creating safe, positive work environments for all members of their teams.
10. It attracts talent
When companies have a good reputation, in terms of how they treat their employees as well as their customers, talented professionals in the industry take notice.
In an interconnected world, where all it takes to uncover information is an active internet connection, companies can’t really hide. Word would travel from mouth to mouth in the past, but today, even if a prospective employee knows no one who works for you, they can easily find out what your working environment is like through their online network or an employer review site like Glassdoor.
How to encourage and foster long-term diversity
There are many ways in which you can foster and honor diversity in the workplace. Let’s talk about five of them:
1. Assess your current situation
The first step to successfully promoting diversity and inclusion in the workplace long term is taking stock of your current efforts and situation. Gathering evidence and feedback from employee surveys, focus groups and performance reviews can reveal a lot about the attitudes dominating your workplace, both on a staff member and management level.
The closer you look, the easier it will be to uncover patterns of underrepresentation, discrimination or exclusion, as well as who tends to have biases and against which group (or groups) of employees.
2. Develop a plan of action
Based on what insights you gain from scrutinizing the interpersonal relationships among your team members and the company's current processes, you can identify areas for improvement. By defining your values and vision, you can set clear goals within specific timeframes and monitor progress, making adjustments as needed.
Some strategies for reducing bias that you can implement immediately include:
- Rewriting job descriptions using gender-neutral language and communicating your commitment to providing equal opportunities
- Creating a blind résumé review system to hide demographic characteristics, to eliminate bias in the selection process
3. Evaluate your executive team
A company that promises to do its utmost to diversify its team yet is very evidently led by undiversified leadership is bound to make a poor impression on many. Leading by example is widely seen as one of the most effective ways to lead, and you want your management to represent your company values as much as possible.
Although this does not mean, in any case, that you should hire and promote people just for the sake of hiring and promoting them, investing in de-bias training for your executives can help onboard employees from various backgrounds, especially for higher seniority positions.
4. Involve both your staff and management
When done effectively, unconscious bias training (sometimes referred to as UB training) can teach both employees and leaders to notice and manage their biases, adjust their behavior and keep an eye on their own progress. Other types of DEI workshops include antiracism, antisexism and cultural sensitivity training.
Besides targeted training, encouraging open communication in the workplace and urging employees and leaders to frequently share their views, ideas, concerns and experiences with each other can also be beneficial.
5. Set and enforce antidiscrimination policies
Biases can oftentimes be unconscious, meaning that even your most well-intentioned employees or leaders can accidentally cause harm. In some cases, you could even end up dealing with offensive or harmful behavior that’s perfectly intended.
Creating a safe and inclusive work environment, therefore, will require you to set clear guidelines and rules on what is and is not accepted, as well as indicate what will happen should a member of your team fail to stick by them.
Final thoughts
Whether leaders realize this or not, experiencing a sense of belonging in the workplace matters. It allows people to turn up every morning feeling (relatively more) relaxed, encouraging them to express their views and ideas more openly, form genuine bonds with others, and enjoy greater job satisfaction.
In turn, this gets reflected in their commitment and productivity, which can significantly boost a company’s financial performance.
Can you think of any more workplace diversity benefits or other ways of fostering it? Share your thoughts with us in a comment!
This article is a complete update of an earlier version originally published on May 31, 2017.