How DEI Benefits the Workplace

Matt Tenney, Author of Inspire Greatness: How to Motivate Employees with a Simple, Repeatable, Scalable Process

Despite some resistance, the majority of US workers support diversity, equity, and inclusion (DEI) in the workplace, and many companies are advancing DEI initiatives, recognizing their positive impact. However, overcoming opposition remains a challenge due to misconceptions and misinformation about DEI.

One of the best ways to combat the misconceptions and misinformation surrounding DEI is to talk about the many benefits of diverse, equitable, and inclusive work environments. 

Because, the truth is, DEI policies not only benefit employees but also enhance organizational profitability in the long run.

DEI benefits the workplace by improving employee engagement, retention, recruitment efforts, performance, innovation, collaboration, customer satisfaction, and brand awareness. Improvements in these areas lead to greater profitability and sustainable success.

In this article, I’ll examine the important role DEI plays in organizations and how it benefits the workplace.

Unpacking DEI

The tenets of DEI are diversity, equity, and inclusion. DEI initiatives, strategies, and policies are centered on providing equal access and equal opportunities for underrepresented individuals and promoting diversity in backgrounds, experiences, and skills to enhance business sustainability and recruitment processes.

These initiatives assist organizations in identifying and eliminating biased policies, practices, and behaviors.

While the notions of diversity, equity, and inclusion are distinct, they are interconnected.

• Diversity refers to the range of similarities and differences each individual brings to the workplace, including aspects like language, race, nationality, ethnicity, gender, age, religion, sexual orientation, disability, and socioeconomic status.

• Equity, as defined by Gallup, is about fair treatment, access, and progression for everyone in an organization. It involves fairness in compensation and work experiences, as well as career advancement opportunities. The goal is to achieve equal results and help diverse groups succeed by providing equal access to opportunities.

• Inclusion is the act of cultivating an environment where all employees, irrespective of their differences, feel valued and have equal access to resources and opportunities. It goes beyond just recruiting a diverse workforce; it involves fostering a culture where employees are supported and motivated to express their true selves and contribute their unique insights to the team and the organization.

How Does DEI Benefit the Workplace?

DEI positively impacts a variety of factors in the workplace, including employee engagement, retention, recruitment efforts, performance, innovation, collaboration, customer satisfaction, and brand awareness.

Employee Engagement

DEI can significantly enhance employee engagement because it shapes the employee experience and promotes cultural alignment. 

When employees believe their employer is committed to a diverse, equitable, and inclusive workplace, their engagement level doubles. They exert 12% more effort, are 57% more efficient at collaborating, and are 19% more likely to stay with the company.

In inclusive work environments, employees engage more with their work and with their team members because they feel comfortable sharing their ideas without fear of backlash. This fosters an environment conducive to brainstorming and innovation.

When leadership values employees’ input and unique perspectives, it boosts their satisfaction and cultivates loyalty, which is crucial for engagement.

Retention

Incorporating DEI policies into the hiring process can significantly improve retention.

According to the American Marketing Association (AMA), DEI retention challenges can arise from day one if onboarding policies do not address potential microaggressions and other harmful behaviors targeted at employees based on their race, ethnicity, gender, age, etc.

Employees are likely to leave an organization where they do not feel psychologically safe, recognized, or valued. They are more likely to stay in an organization with inclusive policies that respect diverse viewpoints and needs and foster a sense of belonging.

DEI can create a sense of belonging within teams that makes the work environment resistant to toxic behaviors. The elimination of toxic behaviors, a major contributor to turnover in recent years, is crucial for long-term success.

Recruitment Efforts

DEI is crucial for building skilled, engaged, and motivated teams. Organizations with diverse and inclusive teams have a competitive advantage over less diverse and inclusive ones. To achieve this competitive advantage requires removing as much bias from the recruitment process as possible. 

Unconscious bias can lead to high disengagement and turnover, costing US companies between $450 billion and $550 billion annually. This highlights the need to eliminate it from the recruitment process, a goal that DEI can help achieve.

Eliminating bias and discriminatory practices from hiring can improve retention, increase the chances of recruiting the right person for the role, expand the pool of skilled candidates, enhance hire quality, and positively influence candidates’ perceptions of the company.

Studies show that 86% of millennial women and 78% of employees surveyed in a 2018 Randstad study value diversity and inclusion policies and equal workplaces. As Gen Z (a notably diverse generation supportive of DEI) continues to enter the workforce, these percentages are expected to rise.

Performance

Given that the employee experience greatly influences performance and that DEI policies and initiatives enhance the employee experience, it’s clear that DEI can boost performance in our organizations.

For employees to stay motivated and engaged, they have to feel a sense of belonging at work and feel that they are valued and can contribute fully to the team effort. If the work environment they are expected to perform well in isn’t inclusive and equitable, it can be difficult, if not impossible, for them to build trust with co-workers and perform at their best. 

When our team members lack a sense of belonging at work, they will also lack motivation and engagement in their work. Productivity may fall. Talented employees may leave. Organizations ultimately bear the cost when this happens, and the results will be apparent in team performance.

However, when we cultivate work environments that champion diversity, equity, and inclusion, we see increased productivity, engagement, and retention. This leads to enhanced employee performance and financial outcomes.

Innovation

DEI encourages respect for diverse viewpoints, which is crucial for motivation. A team’s ability to develop and enhance a product or service depends on its capacity to think innovatively and seek unconventional solutions.

Diverse, equitable, and inclusive workplaces foster robust relationships that facilitate collaboration and innovation. Organizations with above-average diversity have reported increased innovation revenues.

Incorporating diverse perspectives can stimulate innovation, enhance adaptability, lead to inventive solutions, and open up collaboration opportunities. Promoting DEI creates an environment where employees can comfortably share ideas and opinions, boosting creativity and innovation.

A lack of diversity can lead to stagnation. Teams unable to adopt new perspectives or step out of their comfort zone will struggle to innovate or evolve.

Collaboration

Cultivating a sense of belonging is key for employee engagement and unity, positively impacting collaboration. Employees in a diverse, equitable, and inclusive environment feel a sense of belonging that enhances collaboration.

The employee experience is shaped by many factors, but the quality of workplace relationships is the most significant. In fact, the essence of the employee experience lies in the quality of relationships an employee has with their supervisor and colleagues.

Strong bonds between employees foster collaboration and innovation. The ability to be authentic at work allows employees to contribute fully to team initiatives, significantly enhancing collaboration and business results.

Customer Satisfaction

Organizations supporting DEI can better serve diverse customer groups. DEI enhances responsiveness to customer needs, improves customer perceptions and experiences, and increases satisfaction.

DEI can also prevent costly mistakes. For instance, a diverse marketing team can help an organization avoid ineffective or potentially offensive marketing strategies that can harm brands. A diverse and inclusive team can attract a variety of customers (who value representation), benefiting the bottom line.

Leveraging the power of diverse teams requires an inclusive culture that embraces diverse perspectives. Remember, customer representation matters, so it should matter to businesses serving them.

Brand Awareness

As mentioned in the last section, customers value representation and often choose brands based on how diverse and inclusive their marketing is. In fact, the majority of consumers in the US are likely to immediately purchase a product if it’s advertised with a focus on diversity and inclusion. 

Many modern consumers, particularly the younger generation, are drawn to brands that resonate with their values, including DEI. For this reason, brands championing DEI are likely to attract these consumers, boosting brand visibility.

Because DEI boosts innovation and creativity by integrating diverse viewpoints, teams can create distinctive products and services that set a brand apart. By mirroring the diversity of consumers in their communications, brands can more effectively engage with a wider customer base, helping them break into new markets and grow their customer reach.

Since DEI efforts can also enhance employee engagement by fostering an inclusive environment where everyone feels valued and heard, employees at diverse, equitable, and inclusive organizations often become brand advocates, promoting the company within their circles.

The Bottom Line

A 2012 McKinsey study found that US companies with diverse executive boards had a 95% higher return on equity than those lacking diversity. The reason for this isn’t a mystery. 

DEI boosts employee engagement, retention, recruitment efforts, performance, innovation, collaboration, customer satisfaction, and brand awareness. Improvements in these areas can yield significant profits. 

DEI can help companies reduce the costs associated with disengagement, turnover, bad hires, and poor performance, and it can help companies achieve long-term, sustainable financial success by helping teams innovate more and collaborate better. Because DEI can also build loyalty and brand awareness with customers, companies that authentically promote DEI can increase their impact in their market and beyond.

---