DE&I Are Increasingly Recognized as Key Drivers of Business Success
By Association for Diversity in Financial Talent
Diversity, equity, and inclusion (DEI) practices are moving beyond the realms of HR, learning and development professionals, and becoming the responsibility of all leaders and managers.
DEI practices shape company culture and create strategic business advantages by increasing worker engagement, productivity, and retention. Diversity accelerates business results by enhancing a company’s capacity for innovation and developing effective solutions to complex business problems.
The pandemic and “great resignation” have created new workforce pressures, especially on retention of highly performing employees. In response, successful organizations are strategically updating and amplifying their DEI practices to ensure their workforce becomes ever more inclusive, diverse, and equitable. Effective DEI practices create an environment where everyone is valued for their unique identity and differences like race, gender identity, religion, and sexual orientation are celebrated.
In the next 25 years, people of color will become the majority in the U.S., creating the need to evolve not only workforce culture, but other business activities like customer experience, and product design.
Successful brands like Nike are very publicly leading on DEI practices. Recognizing the urgency of meeting the differentiated needs of a changing population, U.S. companies have pledged $50 billion to achieve equity for all, but efforts are nascent with only $250 million having been spent on DEI by mid-2021.
Companies are currently operating through unprecedented events like the COVID-19 pandemic, global lockdown, political protests, and being asked to participate in active conversations around racism, systemic inequality and injustice, remote work, and the threat of economic recession. These factors will continue to influence and accelerate ongoing DEI trends in 2023 that are leading to more equal and inclusive workspaces where all employees feel welcome and valued.
Ten Current Trends in DEI
- Diversity, Inclusion, Equity, & Belonging
Awareness of DEI is expanding to include belonging (DEIB). DEIB is now considered to be a primary driver of an organization’s success by more than 60% of workers. Nearly 80% of workers expect their company to value DEIB. Employees are increasingly prioritizing inclusive workplace culture over compensation. The highest performers will continue to migrate to companies that best align with their values and needs.
Companies are being called on to operate with greater transparency around issues like compensation, board representation, harassment reporting, career advancement and succession planning. The most competitive companies are embedding DEIB practices into overall organizational strategy, talent management, and compensation to create a more equitable workplace.
- A Multigenerational Workforce
Companies today are challenged to meet the unique needs of at least 5 generations in the current workforce, all with distinct expectations around training, automation, employee wellness, social purpose and impact of work, flexible work arrangements, use of social media, and what it means to bring your “full self” to work. Leaders should use different strategies to accommodate and celebrate employees of every generation.
- Silent Generation born between 1928 and 1945
- Baby Boomers born between 1946 and 1964
- Generation X born between 1965 and 1980
- Millennials/Generation Y born between 1981 and 1996
- Generation Z born after 1997
- Neutralizing Unconscious Bias
We all have personal biases based on unconscious feelings that influence our decision making. Implementing proven DEIB strategies neutralizes the effects of implicit bias that impede progress toward an inclusive workplace and organizational culture.
- Gender Identification, Expression, and Inclusivity
Respecting employees who do not identify with their sex assigned at birth goes beyond using a person’s preferred pronouns. Organizations are reconsidering the use of gender-specific bathrooms, providing inclusive healthcare benefits for transitioning employees, and using more inclusive language.
- Remote Work
During the pandemic, companies adopted a work-from-home model that appears to be here to stay. 56% of the U.S. workforce is currently able to perform their job from home. Forecasts predict 25-30% of the workforce will continue to work from home. Women and POC have different benefits and challenges regarding work-from-home arrangements, creating the need for companies to eliminate those gaps with equitable policies and practices.
- Preparing for Systemic Change
Events like the murder of George Floyd and others have highlighted systemic injustices across institutions. Systemic change creating a more just and equal society is already in progress. Forward thinking companies are implementing policies that ensure their workplace is safe for all employees.
- Hiring More Diversity Professionals
The popular trend of hiring diversity strategists who are tasked with creating diverse, inclusive, welcoming workplaces is predicted to grow this year. The evolving role of diversity professionals combines HR, recruitment, leadership, and management responsibilities.
- Increased Transparency in DEIB Goals and Outcomes
More diversity in a company does not always result in more equity, inclusion and belonging. There is a growing trend for companies setting more transparent targets and goals around DEIB initiatives that increase leadership accountability, encourage more honest conversations between employees and managers, and inspire creative effective solutions.
- Supporting Employee Mental Health
Employees’ mental health and wellness has been significantly affected by adjusting to pandemic conditions and other societal challenges. Successful organizations are implementing targeted policies to support the varied mental health concerns of diverse talent pools while ensuring supervisors and coworkers are authentically empathetic in language and behavior.
- Tokenism is Out
Companies are being called to meaningfully improve, accelerate, and report specific DEIB outcomes. The bare minimum of a few token diversity hires for the sake of appearances is no longer enough. Organizations need defined DEIB goals that are clearly integrated into company strategy, and transparent reporting of their progress against those goals.
Requirements for DEIB Success in 2023
- Find Purpose in DEIB: Every company and industry has unique needs, pain points, and objectives. Integrate DEIB efforts that support your overall business model, strategy, and branding.
- Make Significant Investment in DEIB Efforts: Provide meaningful budgets for DEIB professionals that adequately support implementing diversity strategy in alignment with your DEIB purpose and programs.
- Measure Impact: With a defined strategy especially around hiring and retention practices, all activities and investments can be measured for effectiveness against defined DEIB goals. With robust data, companies can continuously improve employee experience.
DEIB practices are guiding HR departments back to their original function of creating a safe space for employees and increasing retention of top performing talent. We are all discovering what inclusive strategies are most effective for our own organizational culture, and refining efforts based on what we are learning. Companies that stay committed to and invested in DEIB efforts improve business results across the board.
Contact ADFT to learn more about customizing DEIB policies and procedures to enhance your company’s ability to attract and retain top-performing employees.