The announcement by the CEO of SHRM (The Society for Human Resource Management) related to dropping the term “equity” from Diversity, Equity, and Inclusion (DEI) raised many eyebrows in the HR community at the time. With several hundred reactions and comments (mostly negative), the issue appeared to stem from a socio-political backlash and from DEI's failures to make a meaningful impact over the past several years. Given our hand-wringing about the disproportionate layoffs and the diminishment of those teams' ability to drive and effect change, this statement about taking equity out of DEI was a surprise and a disappointment.

For clarity, Johnny C. Taylor’s statement included these critical elements:

• “We're going to lead with inclusion, because we need a world where inclusion is front and center. And that means inclusion for all, not some people. Everyone has a right to feel that they belong in the workplace and that they are included.”
• “While we shift to I&D, our commitment to advancing Equity remains steadfast. Equity will be integrated under the broader Inclusion framework, continuing to be a priority in our strategy and leadership decisions.” 
• "By emphasizing inclusion first, we aim to address the current shortcomings of DE&I programs, which have led to societal backlash and increasing polarization.”

This position by SHRM, which boasts over 300,000 members in 165 countries, to "take equity out of DEI" strikes us as severely out of touch with the current workforce realities and possibly as giving in to some political pressure. As we will discuss, the realities of life and staffing facing organizations today call for more action, not less.

Understanding “Equity”

As part of DEI, “equity” starts by recognizing that certain groups are “disadvantaged due to historical and systematic patterns” of discrimination. It focuses on minimizing those disadvantages through “fair treatment” and access to resources that enable them to achieve career outcomes equivalent to those of similarly equipped and motivated peers. Taking equity out of DEI serves to de-claw the need for this. 

A core element of this is acknowledging individual differences in starting points. Some people come from lower-income families and neighborhoods, less-resourced public schools, and colleges or universities with fewer connections to well-heeled donors or leading corporations, etc. Therefore, to achieve similar ends as their peers who came from more affluent school districts, had access to standardized test preparation classes, went to college where internships (and on-campus interviews for jobs) with major employers were more abundant, etc., these individuals need a boost to catch up and earn the same attention and benefits. Removing equity out of DEI eliminates any consideration of creating greater fairness for the benefit of the individual and the organization.

An important distinction is between equity and “equality.” Equality means everyone is treated the same, with access to the same resources and opportunities, regardless of their needs. On the other hand, equity refers to the need to provide people with what they need, specific to their circumstances, to earn their way into the same position and associated rewards as others. It is a nuanced definition, but one that points to a level of resource tailoring to meet each individual's unique needs. Equity, therefore, is specific to resources and benefits such as pay levels, learning and development opportunities, promotions and transfers, remote work/flexible schedules, etc. Removing equity from DEI makes it harder to achieve fairness. It is thus focused not on equal treatment but on treatment that produces an equal result.

Recognizing the realities of the DEI equation 

Any push-back on the need for taking equity out of DEI in the workplace can be addressed by looking at the data that supports the frequently discussed notion of a “glass ceiling”, a “glass cliff”, “concrete ceiling”, and “glass wall” that has received significant coverage in recent years in prestigious publications including The Economist, MIT Sloan Review, Aspen Institute, and Harvard Business Review. Each of these phenomena supports the challenges women and people of diverse backgrounds face. The reality is that most non-white male segments of the workforce are underrepresented in senior leadership roles.

For example, according to the Bureau of Labor Statistics (BLS), while women make up 46.9% of the workforce and 51.8% of management and professional occupations (feeders for top leadership jobs), they only occupy 30.6% of CEO roles and 37.1% of GM roles. After reviewing the occupational rates for many front-line (sales, operations, manufacturing, engineering, etc.) roles that lead to higher-level jobs, we can see that the percentage of females occupying those positions is meager. Although not as dramatic, there are similar trends with total management and professional workforce members from what we consider “diverse” ethnicities and races. A dramatic example is nursing, where men make up only 10% of the workforce but hold almost 50% of nursing leadership positions. 

It is essential to understand that “equity” does not mean everyone has the same ambitions or makes the same career or lifestyle choices. As we have covered in this blog article, middle management roles can be overwhelming and demanding, while senior leaders increasingly experience high stress and burnout. We should also acknowledge that those roles often conflict with child-rearing and related responsibilities, which have disproportionately fallen on women. The drop in women's workforce participation during the Covid years provides ample evidence, a large portion due to caregiving requirements. 

The key to equity is fairness across business processes, treatment, and opportunities for everyone. Removing equity from DEI disclaims fairness and equal access that is still needed. Proactive efforts to create equity result in a level playing field for all employees, ensuring they are hired, paid, developed, promoted, and advanced equitably in line with their aspirations and earned qualifications.

Why equity continues to represent a business imperative

Diversity is increasing in the available workforce

Providing support and continuing to emphasize the employment, development, and advancement of diverse working populations is a direct response to severe labor shortages and low unemployment rates. The facts are clear—in the U.S., the Bureau of Labor Statistics (BLS) tells us that the non-white share of U.S. workers has almost doubled from 11.7% in 1979 to 22.3% in 2019, and the percentage of Hispanics has increased from 5% to 18%. Women's workforce participation increased to 47% in 2019, up 5% since 1979. This is due to swings in birth rates as well as increases in immigration and associated population shifts.

Record employment growth is increasingly driven by immigration, although (contrary to isolationist viewpoints) not at the expense of native-born workers, who are enjoying the lowest unemployment rates in history. The Center for American Progress reports that between 2000 and 2050, new immigrants and their children will account for 83% of the growth of the working-age population. They are helping fill available roles that would otherwise go understaffed.

Diversity drives business outcomes

Research by McKinsey found that greater diversity in top leadership roles increases the likelihood of financial outperformance by a significantly greater margin than homogeneous leadership teams. Subsequent research has expanded the findings beyond the U.S., with similar results in Latin America and Central European organizations. Companies with high leadership gender diversity, for example, were 25% more likely to generate above-average profitability. Those with the highest blend of men and women in the top team were 48% more likely to outperform their competition than those in the least diverse companies. Taking equity out of DEI efforts risks blunting gains and improvements in business outcomes.

Similar findings related to ethnic and cultural diversity in top executive teams. Companies employing top executives with the highest blend of backgrounds were 36% more profitable than those at the bottom of the distribution of differences among their C-Suite team members. Furthermore, a study in Harvard Business Review found that organizations with leadership teams filled with more “inherent” (naturally born traits) and “acquired” (gained through experience) diversity outperformed their peers by 45% in market share growth. 

The explanation seems to stem from mixing successful leaders from diverse backgrounds, improving decision-making (e.g., avoiding “groupthink”), understanding a broader range of customers and marketplaces, and innovative problem-solving and opportunity creation.

Furthermore, the outcomes are significant as equity is a core element of any corporate environmental, social, and governance (ESG) proposition. Recent research has found that a) over 2,000 studies of the effects of ESG showed 63% of companies achieving enhanced equity returns, and b) employee outcomes from ESG programs generated 2.3% to 3.8% higher annual stock returns over 25 years. Clearly, leaving equity out of DEI risks lower business outcomes.

Employees and candidates evaluate opportunities based on it

There is growing recognition that employees and candidates seek equity and fairness from their current and future employers. For example, a Glassdoor survey found that 76% of employees and job seekers considered a diverse workforce a critical factor when evaluating a company and a job offer. Another 37% reported that they would choose not to apply to any with low satisfaction ratings among people of color. 86% consider a company’s commitment to DEI a significant decision factor.

Keep in mind that these workers are neither shy about sharing their impressions or experiences nor are they hesitant to do their research, with the majority of Glassdoor users surveyed reading at least seven (7) reviews before forming an opinion of a company. Taking equity out of DEI ignores the benefits of efforts to increase fairness in opportunities across every organization. Making matters worse, almost 50% of Black and Hispanic employees and job seekers said they had quit a job after witnessing or experiencing discrimination at work. While this may be a unique characteristic or preference of the new generations of workers (Millennial and GenZ), those two groups now represent over 60% of the available workers and thus require the attention of any company trying to employ them.

Steps to take to enhance equity and fairness

The critical endgame of adopting the following practices is to generate the positive gains described previously—greater ease of recruitment and staffing, improved business outcomes, and better decision-making and innovation—all in the name of a more competitive and profitable organization. These serve as counterpoints to keeping equity out of DEI by embracing it without framing it as a social cause rather than a business-enhancing set of actions.

1. Be aware of existing inequities in your organization

Use robust data analysis and employee listening strategies and tools to ascertain the organization's current state. Conduct compensation equity analyses, monitor turnover, promotion rates, lateral mobility, performance evaluation ratings, high potential (HiPo) nominations, succession candidate pools, successor selection decisions, and the like to find potential equity issues by race, gender, nationality, etc. Use outcome-focused insights and seek to understand what is happening and why.

2. Conduct blind or calibrated screenings

Develop and test selection methods that minimize the potential for unconscious bias to creep into selection, performance evaluation, promotion, development assignment, and related advancement decisions. Consider adding multi-person or committee-based evaluation methods, such as calibration sessions that engage multiple managers and expert observers/assessors to make performance ratings, promotions, HiPo selection, development plans, and succession status decisions more objective and reliable.

3. Seek a broad range of candidates for senior leadership roles

Make a concerted effort to identify and groom future leaders with various experiences, backgrounds, and perspectives. Seek to break through the norm by using multiple evaluation methods to create better and more accurate assessments of potential (e.g., validated psychometric tools), leadership competencies (e.g., 360-degree assessments), leadership style (validated tests), and results-orientation (e.g., multi-year goal achievement). Use employee listening, engagement, and upward feedback surveys to identify line and project managers with strong people and results orientations. Oversee and manage team staffing, and measure and track their progress and the business results that follow. Do this as a business need—not under the flag of any diversity, Equal Employment Opportunity (EEO), or other non-strictly business purpose. Do it because it will increase the likelihood of finding and developing more effective leaders.

4. Recruit from a range of talent sources

Be proactive in tapping into the broader availability of qualified employees across educational institutions and work locations. Mining great talent from HBCUs and HSIs, smaller local or regional colleges and universities, technical schools, and community colleges can yield significant pools of high-performing employees with the necessary skills and capabilities. Research domestic and overseas locations with concentrations of appropriately skilled workers and professionals who can be either developed into remote/off-shored work locations or brought to company locations on work visas.

5. Proactively find future critical role and leadership candidates

Administer searches independent of managerial recommendations for HiPo, future leader, and top performer candidates using validated assessment techniques. Consider tracking employee skills to locate employees with unique and desirable skill mixes that might go unnoticed. Create or acquire a skills database to search for employees' annually updated self-assessments. Remember that employees bring skills from previous roles, disciplines, and academic experiences that might not be visible to current managers or others because they are housed in a non-integrated resume database. The beauty of such an approach is the ability to compare employees based on their skills and experience through a bias-free database search or an automated AI match.

6. Adopt adaptive learning technologies

Many contemporary learning technology platforms can meet individual learners “where they are” and precisely what they need to learn and master a skill. Using AI and machine learning capabilities provides an understanding of an individual’s knowledge and skill levels and adapts the content and presentation of a learning program to move them forward. These use knowledge checks and testing to help learners understand the material at their own pace. With different starting points in experience and levels of ability to apply mastered concepts, the personalization of learning is precisely what equitable skills development is all about—helping each individual find their pathway to the same end or learning objective.

Relevant Practices & Tools

Advanced Diversity, Equity, and Inclusion Practices to Diversify the Workforce. >

Employers who understand the value of Diversity, Equity, & Inclusion (DEI) intentionally cultivate a workforce that reflects the diversity of the societies in which they operate... more »

Assessing Current and Future Skills-based Requirements and Gaps to be Filled. >

Bringing workforce planning into a skills-based level of assessment requires cataloging the skills required by the positions to be included, identifying the availability of those skills... more »

Calibrating Goals and Performance to Enhance Group Equity and Fairness of Performance Evaluations. >

Key elements to emerging performance management are the group comparison and alignment of employee goals and performance evaluations... more »

Auto-generating Career Opportunities by an AI Technology-driven Talent Marketplace. >

Talent or Opportunity Marketplace systems are Artificial Intelligence (AI)-enabled software that have varying capabilities, but primarily match employee data to job requirements... more »

The Skills Taxonomy Tool: Define and Organize Job-relevant Skills Used in Different Jobs Across a Company. >

A tool to categorize and define the abilities needed to perform jobs across the enterprise. It is a catalog that can be used in collecting and assessing the individual... more »