The Power of DEI in the Workplace

The war on DEI is gaining momentum.

Elon Musk tweeted this a few months ago:

“DEI is just another word for racism.”

Around 40 anti-DEI bills in the US have also been passed, targeting higher education institutions since 2022. While some of these bills failed to pass, other policies have successfully limited Diversity, Equity, and Inclusion efforts.

The opposition against DEI is disrupting every sector. Anti-DEI activists have successfully forced the resignation of Harvard’s first Black President, Claudine Gay. They have also forced the Fearless Fund to temporarily stop investing in Black women entrepreneurs.

Moreover, companies that championed DEI commitments just months ago are beginning to publicly defund and dismantle those very same initiatives. At least six major firms, including JPMorgan Chase, American Airlines, etc., have tweaked their DEI policies after being threatened with legal action in recent months. Similar changes are unfolding in the legal industry.

Now, many are questioning the future of DEI at work.

Why is there so much opposition against DEI, anyway?

The reason for this is reverse discrimination.

Reverse discrimination is a practice of favoring people belonging to groups known to have been discriminated against previously. As Elon Musk rightly said, the purpose of DEI is to end discrimination, not to replace it with a different kind of discrimination.

DEI is now being mischaracterized as a malicious plan of “Discrimination, Exclusion, and Indoctrination” to replace the current workforce with underrepresented groups. This trope is gaining momentum at an alarming rate. 

It’s time for leaders to re-focus their efforts

It’s important that leaders remember why they began their DEI journeys. The impact when DEI is done right is still strong for people, organizations, and communities. While this is not the easiest time to embrace DEI, it is time for leaders to choose their legacies. The aim of DEI is to not reverse discriminate but to identify and address discrimination and inequity, regardless of race, color, sex, age, status, or any other social identities.  

Here’s an example of reverse discrimination: 

In 2021, a claimant filed a case in court that he was fired from his workplace without due cause to build a more ‘diverse workforce’. He had been given only positive feedback prior to firing, so he had adequate grounds to take legal action. In the end, a hefty sum of $10 million was awarded to the claimant. Later, it was found that the same event occurred with 4 other male workers.

Organizations today are compensating for a lack of minorities in the workplace by hiring from the minority groups exclusively. While it’s great to be inclusive by hiring from a minority group – excluding the majority group is also discrimination. The laws apply equally to the majority and minority groups. 

Employers should: 

• Implement policies prohibiting discrimination on race, color, religion, sex, age, national origin, disability, or genetic information. 
• Provide training on discrimination and harassment to employees and managers. 
• Ensure that all decisions, like hiring, compensation, benefits, etc., are not because an employee is or is not a part of a protected class. 
• Avoid making assumptions when making employment decisions. 

How does DEI work? And Why should you have it in the workplace?

#MeToo, #BlackLivesMatter, #StopAAPIHate. These are just some of the recent movements that have compelled us to reflect on social injustices that exist in our society today. These social issues have trickled down to the professional world.  

Now, Diversity, Equity, and Inclusion (DEI) is defined as the “framework to promote the fair treatment of groups that have been ‘historically underrepresented.’” Initially, DEI was predominantly focused on racial discrimination. It focused on “fair treatment of all people,” but with the rise of multiculturalism, the scope of DEI has shifted as well.

Diversity, Equity, and Inclusion are grouped together because their true impact emerges when they are implemented in combination. Some organizations also include Belongingness in their DEI strategies as well. It’s important to understand the individual meanings of each of these terms. 

With a rise of opposition against DEI and major companies defunding their DEI initiatives, why should you have it in your workplace? 

Because highly inclusive companies are more likely to hit their financial goals by up to 120%. Companies employing an equal number of men and women also manage to generate up to 41% higher revenue. Moreover, according to McKinsey, diverse companies outperform industry norms by 35%.  

Although major corporations are cutting DEI initiatives, they have already made strides towards building a more diverse and inclusive workplace.  

For instance, imagine Google.  

When we think of Google’s workforce, we think of a diverse mix – people from every corner of the world. That’s diversity. Everyone contributes a unique voice, a dynamic exchange of ideas. This is inclusivity – it fuels Google’s innovative spirit.  

Google, as well as other successful companies, don’t just have a diverse workforce, they leverage it. 

“Increasing diversity does not, by itself, increase effectiveness; what matters is how an organization harnesses diversity, and whether it’s willing to reshape its power structure.”

Creating a diverse, equitable, and inclusive workplace is not a one-time task, but an ongoing process. DEI should be a part of the culture, where everyone feels like they are accepted members of the group.  

Creating a DEI-enabled culture

Let’s face it. Most DEI initiatives don’t boost diversity.  

For example, hiring a diverse workforce doesn’t necessarily lead to more inclusivity. While hiring a diverse workforce is a good place to start, it shouldn’t be the only focus.  

Similarly, this is also where most DEI initiatives go wrong. 

Consider DEI training in the workplaces today.  

Although diversity training is effective at educating employees on important DEI topics, it alone is not enough to initiate organizational change. There are many articles detailing why diversity training doesn’t work. A study of 829 companies over 31 years revealed that diversity training had no positive effects in the average workplace. Millions of dollars were spent on the training, but the attitudes remained the same. This is because attending diversity training cannot completely address unconscious biases that have been formed over a person’s entire lifetime. 

Hence, the first step of creating a DEI-enabled culture is to embed DEI in all areas of business. It should be incorporated into the company’s larger business strategy to drive change.  

First, think about where your organization stands in terms of DEI. 

Level 1: Awareness

This is the starting point where companies begin to be intentional towards DEI within their organization. The trigger is usually legal action, public criticism, or traumatic incidents. Companies in the awareness stage either do not prioritize DEI or have focused so much on survival that they have neglected DEI. It takes a trigger, or a wake-up call for organizations to be intentional towards DEI. 

For example, some companies started to be intentional about DEI after the murder of George Floyd. 

Companies in this stage should: 

• Work with the leadership team  
• Define why DEI matters for them. Is there discrimination within the organization? What do employees feel about diversity? 
• Determine the direction for DEI 
• Set small, actionable goals  

Level 2: Compliance

The DEI work is minimal and is mostly to comply with the legal and regulatory requirements. Equity and inclusion may not be a priority throughout the organization. It’s important to: 

• Set DEI goals bigger than compliance targets  
• Determine how DEI can help achieve other goals 
• Connect DEI to department-level goals  

Level 3: Tactical

Companies in the tactical stage have moved beyond the compliant stage and are engaged in implementing their own DEI initiatives. There is a mission, vision, and values in relation to DEI along with training and internal initiatives. These companies may have Employee Resource Groups (ERGs) and DEI teams that institute DEI processes. However, there is still a lack of a strategic DEI approach.  

Companies should: 

• Define an overarching DEI strategy  
• Standardize DEI across different units  
• Connect DEI work throughout the organization  
• Consider the influence of DEI efforts on internal and external stakeholders 

Level 4: Integrated

An integrated organization has a defined DEI strategy, developed inclusivity, and makes DEI a part of everything it does. To reach this stage, organizations should experiment to learn what works and what doesn’t. In this stage, organizations should: 

• Create systems and structures to continue DEI 
• Regularly evaluate the effectiveness of initiatives 

Level 5: Sustainable

In this stage, DEI is deeply embedded in the organization’s culture. True commitment to DEI requires continuous improvement and experimentation because as the organization grows, so do the initiatives.  

Once organizations know where they are in their DEI journey, they can move forward.  

According to a survey, 80% of respondents wanted to work for a company that valued DEI issues. As leaders, it’s crucial to speak up on diversity issues and value what employees want. An article by Harvard Business Review reveals what employees want: 

• Equal opportunities for career advancement 
• To be treated fairly and with respect 
• To be recognized by their managers 

Understanding employee needs through surveys, focus groups, and open forums provides valuable data to tailor DEI efforts. This data becomes powerful evidence when presenting to leadership. 

By presenting DEI efforts to the leadership, HR can get them on board. Leadership buy-in translates into things like policy changes, more resources, and leadership participation in DEI training. To present DEI efforts, HR should first:

• Use wider metrics, going beyond typical DEI metrics like racial diversity breakdowns, headcount or demographic data points. To get a more nuanced picture of DEI, there should also be a focus on promotion rates, access to developmental opportunities, pay equity analysis, women in leadership positions, and so on. 
• Define DEI goals and objectives at every level in the organization. While strong leadership commitment is critical to lead DEI, without departmental and individual ownership, it cannot be sustained.  

• Track DEI efforts. As discussed, embedding DEI goals at every level is crucial, but how do we know we are moving in the right direction? Use a wide range of metrics to track DEI efforts. For instance, look at diversity across different levels in the organization. Measure employee satisfaction through surveys on belonging, psychological safety, and discrimination. Participation rates in Employee Resource Groups can also be a good indicator. 
• Showcase results. Demonstrate progress in hiring a more diverse workforce and how everyone has a fair shot at promotions, development programs, and leadership roles. Share employee stories and testimonials about feeling respected and valued. Quantify this impact on the bottom line. For instance, did diverse teams generate more innovative ideas, or did customer satisfaction improve with a more inclusive workforce? 
• How top companies drive success with DEI

According to McKinsey, companies with the most diverse teams are more likely to outperform competitors on profitability by 36%. Let’s look at some top companies that have driven success with DEI: 

Salesforce

To achieve workforce diversity, Salesforce has taken a data-driven approach where it captures data to identify gaps, trends, and opportunities. HR leaders have access to an equality dashboard, allowing them to access real-time data about representation, promotions by race and gender, and new hire attrition. It has an Equality Advisory Board where its participants meet quarterly to address trends in the equality data. Apart from this, they have also launched an online learning course called Trailhead, which provides employees and managers with tools to drive inclusion in the workplace. 

IKEA

More than a decade ago, IKEA committed to achieving gender parity across its entire business. It developed action plans for each business unit, created mentorship programs, and developed inclusive succession plans. It introduced gender-neutral salaries and corrected pay gaps within the organization. Also, its DEI goals are tiled to each team’s managers’ talent reviews, with a DEI leader in every region to ensure all KPIs are achieved. At present, IKEA has achieved 50/50 gender and pay equity across all its functions. Other than this, around 50.2% of all manager positions are occupied by women. 

PepsiCo

To support the inclusion of LGBTQ+ employees globally, it offered employees the opportunity to self-identify on a voluntary basis and launched awareness-raising campaigns on the importance of self-identity and including pronouns in employee descriptions. Around 12,475 employees across 33 countries have self-identified their sexual orientation and gender identity. 

Johnson & Johnson

This company has invested a lot of resources to create an inclusive environment. Its Global Diversity and Inclusion vision is: 

“For every person to use their unique experiences, abilities and backgrounds, together – to spark solutions that create a better, healthier world.”

It has 12 ERGs that engage employees to develop their potential and drive an inclusive culture. By 2025, the company aims to have 50% women in management globally. In America, it aims to have 35% racial diversity in management positions. 

Mastercard

Mastercard consistently makes it into the Top 10 of DiversityInc’s 50 best companies for diversity list. It is hugely committed to creating and managing an equitable workforce. As of 2021, women earned as much as men, and the same is true for people of color. They invest in diversity initiatives like Girls4Tech, STEM curriculum for young girls, and so on. Additionally, Mastercard offers employee benefits, including coverage for sex reassignment and surrogacy assistance. 

DEI: Is there a finish line?

As you celebrate DEI successes, identify areas for improvement as well. DEI is a continuous journey, not a destination. If DEI efforts are successful, organizations will see that employees feel a sense of belonging. They feel seen, valued, heard, respected, and accepted within the organization. When employees feel they can be their authentic selves and contribute fully to the team, it is a sign that your DEI initiatives are taking root!