This article was originally published in July 2020 and updated in February 2023 with new information about diversity, equity, inclusion, and belonging (DEI&B or DEIB). DEIB is sometimes referred to as diversity, equity, and inclusion (DEI). 2023 brought with it an increase in layoffs, a looming recession, and a concerning trend in diversity, equity, inclusion, and belonging (DEIB or DEI&B). Just 5% of recruiters say it’s a priority for them this year, and 11% of companies say it’s been the first thing to go in budget cuts. Just a few years after increasing DEIB budgets and pledging change, companies — including big names like Lyft and Twitter — are laying off their diversity and inclusion teams.
But we know that this is counterintuitive. Investing in DEIB efforts is not only the right thing to do, it’s what employees want, it’s good for organizational health, and it enables business success. Diverse, inclusive workplaces are more profitable and innovative, and employee retention is nearly six times as high.
Keep reading for more about the value of DEIB in your talent strategy.#DEIB increases engagement, loyalty, and revenue — but just 5% of recruiters say it’s a priority in 2023. Find out why it should be:
What are Diversity, Equity, Inclusion, and Belonging?
- Diversity means a variety of identities are represented in your workforce. Diverse workplaces employ people with differences in gender, ability, age, race, ethnicity, professional background, religion, and sexual orientation, among other identities.
- Equity is ensuring that everyone has equal access to the same opportunities and resources. Equity means acknowledging the different advantages and barriers that different people experience and making a commitment to correct and address the imbalance. This can be done through auditing pay rates, assigning mentors, launching employee pulse surveys, and more.
- Inclusion is when different identities feel valued, heard, and welcome in the workplace. Does everyone in your organization feel like they have input or can speak up when they have an idea? Some companies have spent lots of money and time building a diverse workforce, only for their minority employees to still feel marginalized. Inclusion ensures that underrepresented groups have a seat at the table and that they’re heard when they speak up.
- Belonging is when employees with diverse backgrounds are made to feel part of the group while maintaining the identities that make them unique. Employees say the top five qualities that make them feel they belong are being valued, included, heard, accepted, and feeling like part of a team.
DEIB is imperative for talent acquisition teams and managers due to its impact on employees. They value DEIB and they’re impacted when companies don’t commit to inclusivity or make empty promises.
- 92% of Americans said it’s important for companies to commit to DEI efforts.
- Three in five employees have seen or experienced workplace discrimination.
- 83% of Millennials are more engaged when they feel their workplace is diverse and inclusive.
The Strategic Advantage of DEIB
Why DEIB is necessary is clear from a human perspective: it’s the right thing to do. But as companies cut DEIB budgets, understanding the “why” from a business perspective is crucial to getting executive buy-in and maintaining funding. The strategic advantage of DEIB gets easier when you look at the numbers.
According to widespread and peer-reviewed research across multiple industries and using multiple indicators, more diverse teams foster more innovation. People with different backgrounds and perspectives help challenge the norms, uncover more creative solutions, and shine a light on blind spots. A more global view of the problem leads to a more competitive solution.
- Diverse management can lead to a 19% increase in revenue.
- Inclusive teams’ performance is as much as 30% higher.
- Diverse, inclusive teams make better decisions 87% of the time.
Increasing diversity is not only a talent strategy — it’s a financial strategy, too.
- Cash flow is 2.3 times higher per employee at diverse organizations.
- 75% of companies with diverse and inclusive leadership will surpass their goals.
- Racially and ethnically diverse teams are 35% more likely to outperform median returns in their industries.
The benefits of having a more diverse C-Suite and workforce continue:
- Ethnically diverse leadership teams are 36% more likely to be profitable.
- The most ethnically and culturally diverse boards are 43% more likely to experience higher profits.
- Companies whose boards are in the top quartile of gender diversity are 28% more likely than their peers to outperform financially.
An organization with a focus on hiring underrepresented groups has access to a wider pool of top talent and is more likely to receive a ‘yes’ when an offer is extended. 62% of candidates say they’d reject a job offer if the company didn’t support diversity and inclusion. Feeling a sense of belonging also makes employees more likely to say they’d go above and beyond at work.
Taking An Active Approach to DEIB
Many companies voice their support for diversity, equity, inclusion, and belonging, setting goals for hiring or growth to tackle the issues head-on. But it’s essential to avoid being performative and go beyond words to actions to purposely create a culture in which DEIB is part of it and not a disposable initiative. Recruiters, managers, and HR professionals must do the exploratory work of honoring differences and instilling their colleagues and leadership with principles that include everyone to foster DEIB.
“It’s important for leaders to listen to employees—especially those who don’t have access or who come from marginalized backgrounds. If not, they may privilege the voices of those who have access or power when making decisions.”
- Stephen Pham, Director of Organizational Learning at The Learning Accelerator
Hiring across age groups, gender identities, socioeconomic status, and ethnicities is the first step — but, as we stated above, it doesn’t equate to a robust DEIB program alone. If all of your employees don’t feel welcome to share their differing perspectives, experiences, and ideas, do you really have an equitable or inclusive workforce?
Inclusion ensures that all groups are not just present but are offered a seat at the table. These questions can tell you if your organization is taking real action to create a more inclusive organization where employees feel a sense of belonging:
- How many people of color are in leadership roles?
- How many women are in STEM roles?
- Do all groups have input in meetings?
- Do you solicit the opinions of everyone in creating a workplace that is well-suited to the needs of all groups?
Inclusive workplace culture is a rich workplace culture — one where productivity and innovation soar. Not only does it boost morale and productivity, but it also boosts your reputation — attracting more A-players for future positions and retaining the ones you have. It becomes a self-fulfilling prophecy where top talent wants to come to your company knowing that they’ll feel welcome and valuable.
Head to ClearCompany’s Diversity, Equity, and Inclusion Resources page to find DEIB resources for your talent management strategy.