This guide is part of a progression set comprised of Core, Advanced, and Emerging Diversity, Equity & Inclusion Practices.

What it is

Diversity, Equity, & Inclusion (DEI) is an umbrella term for the practices, policies, and programs that promote population balance and social reform within an organization. It refers to actively accepting individuals from different backgrounds, traits, and orientations. Although it is an umbrella term, each component of DEI has its own definition:

• Diversity refers to worker demographics like race, gender, sexual orientation, location, parenthood status, etc. Organizations should strive to have workforces that reflect the diversity of their customers and society.
  
  
• Inclusion means ensuring diversity and differing perspectives are appreciated within the organization. Each worker should feel valued and have a sense of belonging.
  
  
• Equity is the act of providing resources and opportunities that ensure persons of all backgrounds can thrive in the workplace. It eliminates barriers to success, especially for traditionally marginalized groups.
  
  

Robert Sellers, the University of Michigan’s Chief Diversity Officer, has a popular analogy:

“Diversity is where everyone is invited to the party

Inclusion means that everyone gets to contribute to the playlist

Equity means that everyone has the opportunity to dance”

As practitioners define what DEI means for their organization, two other terms are becoming increasingly popular: Racial Equity, Diversity, Inclusion (REDI) and Justice, Equity, Diversity, Inclusion (JEDI). Regardless of the nomenclature, making progress on DEI efforts requires an intentional and strategic approach.

Creating a workplace and environment conducive to DEI requires an initial (and ongoing) assessment of the current state, where the current blend of population segments is identified. Core to this is the need to develop a detailed understanding of the places and functions and the roles and job levels where diverse workforces exist (or do not). This assessment can provide a clearer picture of increased representation and targeting opportunities. Leveraging employee listening methodologies can help create greater awareness of employee perceptions and leadership perspectives. When practiced regularly, they provide a way to understand shifts in sentiment that are either supportive or denigrative of enterprise strategies to improve representation and acceptance. At this level, developing a complete picture of leadership support and ownership over such efforts (either nascent or ongoing) is critical to creating a strategy that addresses corporate goals and cultural objectives.

Why use it

DEI addresses the realities of retaining and competing for talent in the 21st Century, with three major trends driving the need for DEI. With the global working population shrinking and increasingly diverse, the realities of hiring and managing a workforce are sufficient to meet business requirements. In particular, population growth rates in the most mature nations across the globe are operating below replacement rates (especially as the baby boomer generation retires). As a result, eligible worker replacement rates are proving to be insufficient in those countries. Secondly, immigration trends towards highly developed nations and economies are forcing enterprises across industries to increasingly use DEI strategies to compete, attract and retain properly skilled employees of all backgrounds, and increase their ability to perform staff operations. Finally, generational differences and preferences are creating a demand for such an environment. Millennial and Gen Z populations, now the dominant part of the working population in many developed countries, insist that DEI be part of the working environment and culture as a condition of accepting a job and remaining in an organization’s employ. 

Furthermore, research has demonstrated a business rationale for DEI programs and practices, which improve business outcomes while increasing employee engagement and retention. Organizations that value DEI reap the benefits of better financial outcomes, more innovation, and stronger decision-making. Many of these positive consequences stem from more engaged employees who feel motivated to contribute to the organization’s success. It can support greater innovation and creativity in problem-solving by engaging diverse perspectives with a broader range of ideas and solutions proposed based on people from different educational, experiential, and cultural backgrounds. More diverse teams, especially those that are cross-geographical and functional, tend to bring a comprehensive array of skills and problem-solving methods to bear, avoiding classic “groupthink” that tends to hamstring project teams. It also brings a remarkable ability to manage in and across global markets, with employees raised in different geographic regions who can supply unique insights into the behavior and reactions of consumers, business partners, and regulatory environments.

Additionally, job seekers are also placing higher importance on DEI when selecting a place to work. Competition for talent continues to be fierce in many industries and DEI is a differentiating factor for hiring companies.

Outcomes

Engaging in these practices leads to developing a comprehensive DEI governance model and strategy. In particular, it creates a foundation for a sustainable and continually adaptive environment led and championed by top leaders who promote strategy and practices as a core element of enterprise success and longevity. It codifies and documents how top leadership will manage, oversee, and commit to creating and maintaining an environment conducive to accepting people of all backgrounds and traits. It also embraces diversity as a driver of corporate success and employee engagement. It assigns responsibilities and accountabilities, clarifies the business rationale for such a set of practices and programs, and identifies how the efforts and their outcomes are measured, reported, and managed. By creating a formalized and articulated management structure and strategy, top leadership communicates its importance, reason for existence, and criticality to managers and employees.

Practice guides at this level

Assessing DEI to understand organizational strengths and improvement areas.

Understanding the current state relative to demographics, employee opinion, and sentiment and where current DEI work is being conducted.

Laying the foundation for a DEI strategy that aligns with business goals and key objectives.

Reviewing business and talent strategies for the current state of requirements and DEI opportunities, identifying external stakeholders, and creating a business case for a comprehensive DEI strategy.

Developing an effective governance structure that engages top leadership’s sponsorship and oversight.

Clarifying the structured approach to establishing an impactful governance model, identifying sponsors and drivers of the strategy, and drafting a formalized DEI strategy.