Why Is DEI Important in 2024?

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

DEI, which stands for diversity, equity, and inclusion, has been a hot topic this year, and one around which much misunderstanding and misinformation have coalesced. 

What seems to frequently get lost in the debate is what DEI actually is, why it’s important, and why we need policies and strategies that support DEI today to run our businesses sustainably in the future and achieve long-term success. 

DEI is important in 2024 because it is highly valued by most workers, good for business, and essential to building a more equitable future for all workers. To recruit top talent and achieve sustainable success, leaders should support DEI policies and initiatives and look for ways to build more inclusive cultures. 

This article will examine DEI, its benefits, and why it is more important in 2024 than ever before. 

DEI Explained

DEI describes policies and initiatives that support and promote the representation and participation of different groups of individuals regardless of age, race, religion, ethnicity, gender, sexual orientation, or disability. 

The concepts of diversity, equity, and inclusion are different but interrelated concepts. 

Diversity: Diversity encompasses the range of similarities and differences each individual brings to the workplace, including (but not limited to) language, race, national origin, ethnicity, gender, age, religion, sexual orientation, disability, and socioeconomic status.

Equity: Gallup defines equity as the fair treatment, access, and advancement of each person in an organization, including fairness in pay, fairness in daily work experiences, and opportunities for advancement.

Inclusion: Inclusion is defined as “the policy of providing equal access to opportunities and resources for people who might otherwise be excluded or marginalized.” 

In DEI, the concepts of diversity, equity, and inclusion function together in ways that support fair and respectful work environments for all. DEI initiatives, strategies, and policies are focused on equal access and equal opportunity for the underrepresented and promoting diverse backgrounds, experiences, and expertise to improve business sustainability and recruitment processes.

Why DEI Is Important in 2024

DEI’s beginnings can be traced back to the early 1960s anti-discrimination legislative movement when laws such as the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964 addressed labor issues based on protected classes.

While the concept has been around for quite a while, more companies are making commitments to support DEI these days and looking for ways to implement policies that support diversity, equity, and inclusion in different areas of business. Some are not happy about this. 

The increased support for DEI has, unfortunately, led to an increase in criticism and misinformation around it. Some say DEI policies and practices lack value, make spurious claims that they are somehow discriminatory, or are to blame for the occurrence of completely unrelated events. 

But the evidence continues to show that DEI is a good thing for employees and employers. When we look at the benefits of DEI, in fact, the evidence couldn’t be clearer. Consider the impact of DEI in the areas of recruitment and retention, customer satisfaction, innovation, and profitability.

The Benefits of DEI

What may surprise some detractors is that DEI is very important to workers. According to the 2021 Workforce Happiness Index, 78% of workers want employers that value DEI. This gives companies that make good faith efforts to support DEI a competitive advantage.

DEI is crucial for building talented teams of engaged, motivated employees, and organizations with diverse, inclusive teams have an advantage over their less diverse, less inclusive competitors. 

DEI initiatives help organizations eliminate (or, at the very least, reduce) policies, practices, and behaviors that are biased. It can help organizations identify seemingly innocuous policies that are unconsciously biased. 

Unconscious bias costs US businesses $550 billion annually, a point that is rarely mentioned in the debate over the effectiveness of DEI initiatives, but it’s important to consider that figure as we continue to identify ways to make our organizations more sustainable, more adaptable, and more profitable. 

Eliminating bias and discriminatory practices from the selection process can open up recruitment efforts to a wider pool of highly qualified candidates and improve the overall quality of hires. It can also have a positive effect on how potential candidates view the company.

Research found that 86% of millennial women considered diversity and inclusion policies important. As more Gen Z workers enter the workforce, this trend is expected to continue.  

DEI is also a major player in innovation. Organizations with above-average diversity scores have reported higher innovation revenues. Organizations can benefit immensely from including diverse points of view because they spur innovation, make teams more adaptable, lead to creative solutions, and create unique opportunities for collaboration with team members and clients. 

It can also help organizations provide a better customer experience. Organizations are better able to serve diverse groups of customers and avoid marketing approaches that fall flat when they have diverse teams. It’s important to keep in mind: representation matters to customers, so it should matter to the businesses that serve them. 

All these benefits are good for profitability, but just how good? According to a 2012 McKinsey study, US companies with diverse executive boards had a 95% higher return on equity than those that lacked diversity. 

I’d like to speak more on the issue of profitability and how it can be impacted by policies that support diversity, equity, and inclusion. Whatever one’s personal views are on this topic, there is no denying the financial impact DEI (particularly inclusion) can have on an organization. 

One of the ways a lack of inclusion can negatively impact a company’s bottom line is that it makes organizations more susceptible to toxic practices and behaviors, which can lead to disengagement, increase turnover, and hurt profits. 

Nothing will make an employee disengage faster and seek out other opportunities than a work environment where they are subjected to microaggressions on a daily basis, where they must constantly engage in code-switching to feel like they “fit in” with the majority of their co-workers, or where difference is used to divide employees or limit their participation.  

Toxic work cultures have been cited as one of the main factors driving turnover over the last year, proof that when work environments are negative, organizations will lose talented employees. This means they will also lose money. And the bias and discrimination that lead to toxic work environments can be costly.

Going Forward

As DEI policies increasingly come under attack, it’s important to focus on the benefits of supporting diversity, equity, and inclusion efforts and to listen to the demands of the workforce. 

To stay competitive in the job market, DEI strategies and initiatives are a must-have to attract and retain talent. 

But it’s about more than a statement on a company’s website. Workers expect employers to demonstrate real follow-through on their DEI initiatives and want companies to walk the talk. 

Organizations have to get serious about DEI and make efforts that go beyond those yearly diversity training videos. The key to building diverse teams that can achieve the positive business outcomes we desire is fostering a culture of inclusion within our organizations that supports equity and diversity efforts. 

An inclusive culture is a workplace culture that is supportive of and respectful toward all employees. Organizations with inclusive cultures embrace differences in backgrounds and experiences and build high-performing teams of employees who are engaged with their work and invested in the organization’s success.

Organizations may implement a few inclusive policies here and there or have a statement about inclusion on their website, but it takes more to create an inclusive environment. It requires a deep commitment at every level of the organization (particularly senior leadership) to create a culture that makes inclusion a priority. 

Fostering inclusive work environments that are inhospitable to toxic behaviors and microaggressions that can alienate otherwise engaged employees is the key to keeping our companies sustainable and profitable in the long term.

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