From Ford to John Deere, to Harley Davidson, it seems that there is another large corporation walking back their diversity, equity, and inclusion (DEI) initiatives every week. With so many against it, HR teams must remember that a feature of effective DEI initiatives is the resulting company cultures that are more open and accepting of communities of different backgrounds. It’s not just employees that benefit either but also those who consume a company’s goods and services. The better a company can serve its workers, the better it can serve its customers.
Reap the Benefits of DEI
Return on Investment
DEI isn’t meant to be just a buzzword. When put into practice correctly, businesses are likely to see a positive return on their investment. Research from the Boston Consulting Group revealed that within diverse management teams, innovation increased by 19%. McKinsey&Company also found that executive teams with high levels of gender diversity in particular were 25% more likely to obtain “above-average profitability than peer companies.”
The business benefits don’t stop there as DEI can attract new customers as well. Research from HBR states that companies with diverse leadership were 70% more likely to confirm capturing a new market.
By creating a space that encourages diverse backgrounds and ideas, leaders can enhance creativity and innovation to further drive their success.
Hiring and Retention
It’s not just revenue that can improve either. The working landscape is no stranger to trends like Quiet Quitting and Resenteeism but fostering a supportive company culture can serve as a strong tool in keeping teams together. And according to 25% of workers, that culture needs to include DEI.
For HR teams deep in the hiring process, it doesn’t hurt to have a boost. With 76% of workers and job hunters naming diversity as an important factor when considering new career opportunities, DEI can help your company stand out among a sea of recruiters.
Of course, DEI isn’t just a ticked-in box to attract applicants. HR teams need to make sure the DEI programs in place are effective. In doing so, they are likely to see a rise in employee retention that is 5.4 times higher than in non-inclusive workplaces.
Measuring DEI Success:
The most important detail to take away from this article is that to reap the benefits of effective DEI initiatives, they must be designed and implemented effectively. To understand how DEI plans affect the company, HR teams can focus on a few different metrics to improve and evolve their strategies.
- Psychological Safety: Without a free flow of ideas, there will always be a lack of innovative solutions for companies and their customers to benefit from. Employees need to feel psychologically safe within the company to share their thoughts without fear of backlash or marginalization. Several tools are available for measuring how employees perceive their psychological safety. Seek employee feedback through channels such as one-on-one meetings, anonymous surveys, or regular focus groups to obtain a well-rounded perspective on how workers in your company feel and what would help the culture improve.
- Turnover and Promotions: DEI programs must have room for HR teams to examine the experience of underrepresented groups within the company. Do they experience higher turnover? Are they promoted are similar promotion rates compared to their peers? It is also worth noting how underrepresented employees are offered opportunities for high-visibility projects and leadership tracks. By analyzing these comparisons, HR leaders can then form a roadmap for how to fill any gaps in equitable career opportunities.
- Inclusive Leadership: If leadership doesn’t model inclusive behavior, then their employees are less likely to respect the DEI initiatives as well. HR teams must monitor how leaders commit to DEI initiatives and if they encourage their workers to engage with DEI initiatives as well. HR can communicate with employees to review how their managers implement DEI into their leadership style.
Make DEI Stick
While we are in an era where companies continue walking back DEI initiatives, HR teams must stay vigilant when building an inclusive work environment. By fostering a culture of diversity and equity, companies can improve their bottom line through innovation, customer loyalty, and employee retention. Measuring the effectiveness of these initiatives is also crucial for ensuring that effective DEI initiatives are a significant part of the company’s business strategy.
