The Why Behind DEI: How Diversity, Equity, and Inclusion Initiatives Benefit Business

6-minute read

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Could this time be different? Could this be the time we see true, meaningful change in how the United States – and the world – addresses racial injustice?

The disturbing events – and the protests that have followed – have spawned a renewed urgency for HR leaders to look at how their organizations are addressing systemic inequity, both within and outside the workplace. Diversity, equity, and inclusion facilitator Brittany J. Harris observed as much in a recent interview with Workhuman® CHRO Steve Pemberton. She noted that in today’s charged climate, “it’s more apparent than ever that organizations don’t exist within a vacuum. They are part of a much broader solution change – an ecosystem. And for leaders to rise to the occasion takes capacity-building, skill-building, and disrupting the systems we’ve become so accustomed to. And a lot of that starts with engaging folks. And learning.” 

With that as a backdrop, let’s pause for a moment and explore the terms diversity, equity, and inclusion more deeply. They are three words we often hear together, but what do they really mean? What are the benefits of recognizing and embracing diversity? And how can diversity, equity, and inclusion initiatives improve your workplace culture and productivity?

Defining diversity, equity, and inclusion 
Dr. Robert Sellers, chief diversity officer at the University of Michigan, breaks down the distinction between the three terms in a somewhat lighthearted, but highly illuminating way:

  • Diversity is where everyone is invited to the party
  • Equity means that everyone gets to contribute to the playlist
  • Inclusion means that everyone has the opportunity to dance

Here’s what that means:

  • Diversity is actively bringing people of all backgrounds – from the perspective of age, gender, religion, sexual orientation, etc. – to be a part of the workplace. This includes aspects that are unseen as well, like learning differences. 
  • Equity is about ensuring all people have equal opportunities within the organization and that bias, harassment, and discrimination – of any kind – are not tolerated. 
  • Inclusion is recognizing and embracing those differences so every employee can have an impact on your organization because of the very qualities that make them who they are.As Brittany Harris described it, “It’s about making people feel like ‘I am an organizational insider, and what makes me different is valued.’”

The benefits of embracing and celebrating differences
When each employee brings their own brand of thought to the table, it creates a more innovative, positive environment and a broader, global perspective. The bottom line? A stronger environment and a more profitable company.

According to a McKinsey & Company report, “Companies in the top-quartile for ethnic/cultural diversity on executive teams were 33% more likely to have industry-leading profitability. That this relationship continues to be strong suggests that inclusion of highly diverse individuals – and the myriad ways in which diversity exists beyond gender (e.g., LGBTQ+, age/generation, international experience) – can be a key differentiator among companies.” 

The report goes on to say, “The penalty for bottom-quartile performance on diversity persists. Overall, companies in the bottom quartile for both gender and ethnic/cultural diversity were 29% less likely to achieve above-average profitability than were all other companies in our data set. In short, not only were they not leading, they were lagging.”

The benefits of publicly celebrating differences are two-fold. When employees feel like they have a voice and are empowered and respected, it creates trust and a feeling of belonging within your organization. From a business perspective, the more people feel this trust and belonging, the more innovative they are, the more they use their imagination, and the more productive they’ll be.

Workhuman report expanded on the many benefits that result when employees feel they are included, accepted, and belong at work. Among them: 

  • Higher employee engagement: Social support from co-workers has been shown to significantly impact engagement.
  • Higher productivity: Employees who feel they are part of a group – working toward shared goals – report increased motivation, positivity, and overall productivity.
  • Reduced conflict and improved relationshipsSocial exchange reduces conflict, improves performance, facilitates information sharing, deepens empathy – while promoting more pleasant and efficient patterns of exchanges, boosting trust, and increasing “tolerance of imbalance in exchange relationships.”
  • Higher levels of learning and performance: A culture of psychological safety and inclusion leads to better learning and performance outcomes.
  • Reduced stress: When co-workers provide social support, it can ameliorate the impact of a large workload and thereby buffer the impact of burnout.
  • Increased resilience and trust: A consistent flow of relational exchanges raises levels of commitment, concern for the reputation of oneself and others, and levels of trust and resilience
  • Better health: When belonging has been established, it contributes to improvements of the physical body system. Likewise, those who feel they don’t belong may experience both psychological and biological illness effects and even a weakened immune system
  • Happier, more productive employees: According to one study, “participants stated that organizational celebrations made them happier in their job, improved diversity and workplace knowledge, reduced isolation, and cultivated relationships, which all contributed to their desire to be more productive in their job.”
  • Greater affective commitment: Reward and perceived social support are direct contributors to affective commitment – thereby increasing an employee’s intent to stay.

A culture of positivity – the bottom-line benefits
The first step is recognizing the differences among your employees and then inspiring them to harness these unique attributes to become the best version of themselves. This happens most often when diversity and inclusion practices are put into place alongside a Social Recognition® program. In fact, Workhuman’s own research shows that receiving recognition leads to a greater sense of belonging and the belief that diversity is valued.

HR leaders who are creating this kind of positive environment and exceptional employee experience are seeing increased engagement, retention, and employee satisfaction. The end result? When people feel like they belong and are being celebrated for their whole selves, they flourish and do the best work of their lives. 

And that’s something any business will benefit from.

Your DEI action plan

Workhuman has prepared a solution brief that outlines 10 ways human applications, such as social recognition, can help companies pursue their D&I initiatives – from amplifying employee voice, to avoiding bias, building empathy, and aligning employees on shared core values. It provides a powerful roadmap on how to achieve your DEI goals.

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About the Author

Niamh Graham

Niamh is vice president, global HR at Workhuman.

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