2021 is the year we prioritize diversity, equity, and inclusion (DE&I). We’re going to build inclusive and equitable cultures that honor all of our people and their diverse backgrounds; redesign our recruiting policies to make sure they’re built to support equitable hiring; stamp out structural inequities from our compensation structure, and support employees in their unique journeys.
Throughout 2020 we explored diversity, equity, and inclusion in HR. These are our most important learnings.
1. Investing in DE&I pays off
Diverse teams perform better. They make better decisions, collaborate more effectively, and are more engaged. Diversity has a tangible, measurable impact on the company’s bottom line.
Any pushback regarding prioritizing diversity, equity, and inclusion in hiring decisions should be met with studies conducted by Deloitte, McKinsey, Credit Suisse, Harvard Business Review, and dozens of other reputable organizations and academic institutions.
Some of our favorite statistics:
- The lowest-scoring companies for gender, ethnic, and cultural diversity are 29% less likely to achieve above-average profitability than all other companies surveyed.
- Companies in the top quartile for gender diversity on executive teams are 21% more likely to outperform on profitability and 27% more likely to have superior value creation.
- Companies in the top quartile for ethnic/cultural diversity on executive teams are 33% more likely to have industry-leading profitability.
- Companies with diverse boards have a 95% higher return on equity than those with homogenous boards.
- Companies that actively create diversity programs are 70% more likely to enter new markets and 45% more likely to grow their market share.
- Gender diversity predicts positive financial performance.
- Retention is 19% higher at companies ranked highly for diversity and inclusion than average organizations.
2. DE&I cultures need buy-in from every level of the organization
DE&I cultures can only succeed when everyone is involved. Employees, managers, HR, and the executive team have unique (and critical!) roles to play in enforcing and expanding diversity initiatives.
Creating a communication culture where employees at every level are able to communicate with each other about sensitive issues will let your people organically build a healthy culture that fits your organization’s DNA.
3. DE&I takes many forms
While many companies reserve DE&I efforts for recruiting more women and BIPOC employees, the true range of DE&I goes far beyond that to encompass:
- Gender identities beyond the binary
- Sexual orientation
- Personality type
- Immigrant status
- Physical abilities
Successful, all-encompassing DE&I efforts need to be built into every aspect of the employee experience, from the language used in emails to the way meetings are run. Companies that genuinely want to engage employees beyond the “norm” will have to make ground-up efforts to build a thoughtful culture.
Beyond recruitment, DE&I efforts can include:
- Redesigning corporate gifts to include employees of different sizes, religions, and abilities
- Building office and meeting spaces accessible to all employees and guests
- Developing a code of conduct that all new hires must read and accept as part of their employment contract
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4. Successful DE&I starts with the hiring process
While projects like designing inclusive hiring pipelines may be costly on paper, their payoff is massive—and guaranteed. Millennials are the most diverse generation in the workforce, with over 44% identifying as racial minorities and 20% identifying as LGBTQ+. With 83% of millennials reporting a positive correlation between diversity and productivity, diverse recruitment pays off with dividends from that statistic alone.
Especially in this fully- (or mostly-) remote world, building inclusive hiring funnels couldn’t be easier, and its benefits are obvious: deeper hiring pipelines, more diversity among candidates, and higher standards for new hires.
Building inclusive hiring practices may require some possibly unpopular changes to existing norms. For example, a pillar of inclusive hiring is publishing all job descriptions: a significant change for companies used to hiring discreetly with recruiters. While hiring managers may push back, these changes have a measurable impact on the company’s bottom line. It’s hard to argue against the facts: inclusive organizations bring in 2.3x more cash flow per employee and 1.4x more revenue.
5. DE&I cultures don’t build themselves
Building DE&I-focused cultures takes work from every level of the organization. Everyone has to be committed to the same mission: a better, brighter future for all employees and new hires.
For HR this task is especially important, and it often involves restructuring the foundation of the organization’s culture. Creating a thorough code of conduct that fits the company’s unique culture is a critical element of building a safe, inclusive workplace.
Every organization is different, but the definition of cultural safety is the same no matter where you are: an environment where employees are comfortable being themselves, where their lifestyles are respected and they feel free to express themselves.