Why is Diversity and Inclusion important?

by Matt Bochenski

Diversity and Inclusion

What is Diversity and Inclusion, and why is it so important in the workplace? We explore how big companies are addressing these important issues and how you can, too.

In the wake of the social and political events of 2020, many businesses are reiterating their commitment to diversity and inclusion (D&I) in the workplace. Big-name brands from Nike to Disney have made pledges to devote attention to these important issues surrounding workplace culture. And it isn’t just the high-profile brands. Smaller organizations are also pledging to make immediate, positive changes around diversity and inclusion at work.

For many managers and leaders, your starting point might be a curiosity around the business case for D&I – in other words, how you can sell it to the broader organization. But some experts argue that this focus on the business case is misguided and that the moral case for D&I is far more pertinent. But first, let’s take a closer look at diversity and inclusion and why it’s so important.

What do we mean by diversity and inclusion?

We’re all different. And sometimes, these differences can lead to discrimination – either directly or indirectly – or treated less favorably than their colleagues. As well as blatant harassment, discrimination also includes things like everyday micro-aggressions.

A typical example of discrimination would be a woman missing out on promotion in favor of a man. But other examples include a building not being wheelchair accessible or a workplace culture that encourages alcohol without considering its Muslim employees.

To help mitigate types of discrimination, the law protects several so-called ‘characteristics’ in many countries. For example, the UK has the Equality Act (2010), which protects:

  • Age
  • Disability
  • Gender reassignment
  • Marriage and civil partnership
  • Pregnancy and maternity
  • Race
  • Religion or belief
  • Sex

Inequalities are often interconnected across several areas like race, gender and class. Where a person, or group of people, holds more than one characteristic – a woman of color, for example – this is known as intersectionality.

Not everywhere has laws to promote equality and fair treatment at work. For example, in the US, LGBTQ+ employees are not yet protected in all states against discrimination in the workplace. Other differences not yet commonly protected by laws include socioeconomic background, accent and neurodiversity.

So, what’s the difference between diversity and inclusion? Diversity is recognizing the differences between employees, their identities and their backgrounds. Inclusion is wholeheartedly valuing and embracing these differences and believing they’re a benefit to the business.

The key point here is that a diverse workplace isn’t necessarily an inclusive workplace - one doesn’t automatically follow the other. As Robin J. Ely and David A. Thomas wrote in Harvard Business Review, “...just increasing the number of people from underrepresented groups is not meaningful if those employees do not feel valued and respected.”

Why is Diversity and Inclusion important?

It’s clear that there’s a social and moral case for diversity and inclusion, as well as a business case. In a genuinely inclusive organization, people can work together effectively without fear or discomfort. And when organizations proactively accommodate different needs, everyone can thrive professionally.

In terms of tangible benefits for D&I, a genuinely inclusive workplace should:

Attract more talent

More progressive companies tend to find that they attract and recruit the best talent. And if a company’s D&I initiatives focus too heavily on financial gains (aka the business case), under-represented candidates may question the company’s integrity and reject a job offer.

Attract Millennials

47% of the so-called ‘woke’ generation say they actively look for inclusive employers.‏1‏ A similar story seems to be emerging for Generation Z, who tend to ask about a company’s D&I commitments in interviews.

Retain employees

Pre-pandemic, one of the buzz-phrases was ‘bring your whole self to work,’ but this appeal to authenticity rarely resonated in non-inclusive workplaces. Employees who don’t feel comfortable praying, pumping breastmilk or talking about their same-sex partner at work are less likely to be loyal to your organization over time.

To retain diverse employees long-term, companies need to foster a true sense of belonging and focus on improving the Employee Experience.

Boost company reputation

Consultants Korn Ferry partner with Fortune to identify the World’s Most Admired Companies (WMACs). They found that one key thing these companies have in common is that they prioritize diversity and inclusion.‏2‏ With D&I part of the business strategy, they can improve their reputation with customers, clients, suppliers and prospective hires alike.

Increase creativity

More diverse teams can help your business avoid group-think and produce more creative outputs – that’s provided workers feel comfortable sharing their input and confident their ideas won’t be talked over or shot down.

Improve wellbeing

A study by Psychology Today found a strong relationship between a diverse/inclusive working environment and employee wellbeing. When we don’t feel we belong, it can impact our sense of wellbeing and make us more likely to think about changing jobs.

See a positive impact on company culture

Diverse organizations benefit from a richness of ideas, experiences and ways of working. Company culture is enhanced when all backgrounds are welcomed and celebrated, from religion and language to family set-up.

See better returns

The business case for diversity and inclusion is strong. McKinsey, well-known for its D&I studies spanning several decades,‏3‏ found that “the relationship between diversity on executive teams and the likelihood of financial outperformance has strengthened over time.” And Forbes found that “companies that feature ethnic and racial diversity perform far better in almost every category.”‏4‏

But it’s not all about money. Hanna Naima McCloskey from Fearless Futures wants us to dis-invest in the idea of needing a business case for diversity and inclusion. She says, “If the starting point is that you need to prove your humanity, this is a workplace that doesn’t see you as human. What sort of starting point is that for so-called ‘inclusion’?”

The moral case for D&I speaks for itself when we acknowledge that all employees deserve a safe, supportive environment in which to work. A place where they can develop professionally, have a voice, and have a forum to share that voice. Harvard Business Review echoed this by saying that business leaders must “Embrace a broader vision of success that encompasses learning, innovation, creativity, flexibility, equity, and human dignity.”

COVID-19 and diversity and inclusion

TThe COVID-19 pandemic has had an impact on diversity and inclusion programs. Leaders have deprioritized D&I to financially weather the pandemic, leaving employees frustrated about the lack of progress. What’s more, underrepresented employees have experienced the most challenges during this time. McKinsey's report found that women, LGBTQ+ employees, people of color, and working parents are all struggling.

The other big challenge is around employee mental health, which is harder to monitor and support remotely. All diverse groups have cited an increase in mental health challenges, with women 2.6 times more likely to report acute challenges than men. In emerging economies such as China, India, and Brazil, this figure is significantly higher.

When organizations train leaders about D&I in the workplace, they can address the inclusion challenges created by remote working and bridge these gaps. Quick wins may include rotating meeting hosts so that everyone gets a chance to talk and not requiring cameras to be on if employees live in shared accommodation. But over and above any quick wins, the company strategy must include a tangible and authentic commitment to understanding and overcoming an organization's unique D&I challenges.

How to improve diversity and inclusion in the workplace

So how can we make it better? Here are some of the steps organizations need to take when committing to improving diversity and inclusion in the workplace.

Assess how diverse and inclusive your workplace is now

How well do you know your organization? Are you willing to know everything, even if it’s hard to hear, let alone publish? This is the level of commitment needed when assessing your current D&I landscape.

Harvard Business Review suggested that as organizations already collect data for many purposes, they could extend its use to diversity and inclusion. As well as being able to monitor improvements over time and compare against similar businesses, collecting and sharing data can help improve accountability and transparency.

Although most of the Fortune 500 don’t currently share their diversity data, transparency can increase employee, prospective employee and customer confidence in your commitment to D&I.

Strengthen diversity and inclusion policies

Verbal buy-in from senior stakeholders is important but formal policies and procedures are essential to ensure robust diversity and inclusion strategies. Organizations should review these regularly and find ways to enforce them. Only when underrepresented employees feel a sense of safety and belonging will they be able to fully contribute their ideas and creativity to the business.

Look at recruitment practices

HR leaders need to be aware that popular recruitment tools, including apps, aren’t necessarily neutral. They can inadvertently contain bias against specific characteristics, including race, gender and socioeconomic background. To combat this, you should regularly test and review the tools and technology you use for hiring.

Consider providing formal training for all recruitment managers covering unconscious bias (where you unknowingly judge people based on stereotypes) and affinity bias (where you gravitate towards people who are like you). Switching to bulk-hiring of a series of roles rather than hiring for one position at a time can also be an effective tactic.

Commit to ongoing diversity training

One-off training in areas like unconscious bias is a good starting point, but training should be ongoing. Once you’ve collected and analyzed your data, you’ll know which areas to focus. Leaders should set an example and commit to diversity training, as change comes from the top. If you realize you have an unconscious bias problem – and many organizations do – you need to know how to turn it into conscious action and behavior change.

Improve communication

Organizations have to find ways to listen to their employees’ experiences. Employees need to know their voices matter. If everyday and two-way business communication is a challenge, it can give people alternative ways to raise issues. Using an independent organization to collect complaints can help to avoid repercussions for people who speak out.

Make gatherings inclusive

Catering for everyone should be more than a tick-box exercise. Make your meetings effective and inclusive by welcoming everyone by name and sending the agenda in advance.

It’s also important to cater for time zone differences and language barriers, particularly for deskless and remote employees. For example, alternate between office hours and warehouse hours for meetings if you want to truly get your whole workforce involved.

For in-person gatherings, make sure there are seats for everyone and find out food and drink requirements ahead of time.

Inclusion is more than ‘one-size-fits-all’

Business leaders have moved away from the idea that we can simply treat everyone the same. Rather than expecting employees to fit the organization, our challenge is to make the organization fit them.

Don’t ignore organizational context - it plays a massive part in the success and sustainability of D&I initiatives. It would help if you had early input from all staff, and managers must be involved in the planning and design of the strategy that they’ll be spearheading.

The key is to see diversity and inclusion as a complete overhaul of how the company thinks and operates, not just a task for your HR department. Commit to being authentic, transparent and accountable. And finally, think like a Millennial or Generation Z-er and focus on maximizing connection at work.

Diversity and inclusion matter in workplace culture

Workplace culture - the atmosphere of the working environment - is shaped by its people. A company where everyone feels valued and included will create a stronger culture that has a positive impact on everything from recruitment to engagement to productivity.

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