what is DEI, DEI meaning, DEI definition, importance of DEI

What is DEI and Why is DEI Important?

Diversity, equity, and inclusion are easier to write and talk about than to achieve. The inability to understand and tolerate those that are different from ourselves runs deep across human history. It has been the basis for countless wars among countries. These are issues that we as humans have not managed to resolve, which means we can expect the workplace to struggle in the process. Some workplaces have gotten better with diversity, but that is only the first step. Equity and inclusion are much more taxing to implement, and very few companies get all three right – at least initially. However, even though DEI can be difficult, we must do our best to answer the questions being able to answer the questions, What is DEI, and Why is DEI Important?

What is diversity in the workplace?

Diversity refers to the human make-up of an organization. A diverse workplace doesn’t exclude anyone based on factors like age, gender, race, nationality, disability, sexual orientation, religion, political beliefs, or other factors that distinguish one person from another.

What is inclusion in the workplace?

Inclusion means everyone in the diverse community is acknowledged, valued, and encouraged to grow and prosper. Inclusion means the perspectives and contributions of everyone are considered for incorporation into the organization’s goals and operations. This is why companies that embrace diversity excel: they are not only welcoming everyone, they actively include them.

Diversity by itself is not effective. Only when it goes hand in hand with inclusion does it propel a business to new heights.

What is equity in the workplace?

Equity in the workplace levels the playing field for everyone in the organization. It’s not the same as equality, which in the workplace means access to the same resources and equal distribution thereof – for instance, the same monetary reward for the same work.

Equity, on the other hand, is giving everyone what they need to succeed. And everyone doesn’t need the same resources to succeed. An example of equity in the workplace is not being rigid about hiring requirements. For instance, if a company practices equity, someone applying for a software engineering position would be considered even without an academic qualification. Demonstrating experience and skill would be sufficient.  Think of what the world would be like if Microsoft, Apple or Facebook had a college degree as a requirement.  Gates, Jobs and Zuckerberg could not have even been hired at the companies they founded.

Equity is tricky to achieve. That is because equitable and fair treatment may differ from individual to individual.

The benefits of diversity, equity and inclusion

Whether you are just starting your business, or have been in business for years, DEI initiatives will benefit your business. In fact, the benefits of diversity, equity, and inclusion are undisputed. Multiple research studies have confirmed that organizations that practice diversity, equity, and inclusion outperform those that hang onto the status quo. These companies benefit from higher productivity, better employee retention, and an overall boost in morale.

Discrimination, inequality, and exclusion have harmed society for long enough. It’s time to realize the benefits that changing our ways could bring.

1. Creates an opportunity to eradicate prejudice

The most important reason for organizations to practice diversity, equity, and inclusion is the social benefit, not economic one. It’s first and foremost about correcting the wrongs of the past. In the past, business decisions deliberately excluded all but one demographic and discriminated against the rest.

When organizations work towards inclusivity and all it entails, they lay the groundwork for a more just society for all.

2.  Enhanced levels of creativity and innovation

This is one of the most widely accepted benefits of diverse and inclusive teams, as evidenced by multiple studies. When companies create more diverse management teams by including women and diverse nationalities, and thus create diverse project teams, it pays off.

Diverse teams tackle a problem from different perspectives. Team members are confronted with alternative and often surprising viewpoints that they have to evaluate. The group’s interaction and attempts to understand each other and accommodate everyone’s ideas can lead to products and services that justify the term innovative.

study by the Technical University of Munich found a positive relationship between management diversity and innovation – that is, they earn more revenue from new products and services. On average, companies that promote inclusive work environments generate a third of their revenue from innovative products and services.  Companies that don’t, generate less than a quarter in the same way.

3. A global impact

It is easier for a diverse team to develop global market awareness, not only if members represent different nationalities and ethnicities, but also if they are hired from other countries. Including people with disabilities and members of the LGBTQIA+ community can give teams insights they would not have come to on their own.

Diverse teams see things from many perspectives, honed by personal experience, not theories. These teams don’t only see new market opportunities, they create new ones as they have a greater chance of noticing unmet market needs. Diverse members expand a company’s market awareness.

Diverse teams are in the ideal position to create products and services for the demographic they represent.

4. Improved profitability

This is the benefit that has most often been promoted ever since the notion of DEI started taking root. Research by McKinsey shows that companies that actively promote diversity and inclusion strategies are 35% more likely to achieve above-average returns – with business performance increased by 31%. A Deloitte study found that businesses with an inclusive culture were twice as likely to meet or exceed their financial targets.

5. Diversity and inclusion boost employee engagement and retention

Diverse and inclusive workplaces experience higher levels of engaged workers, which automatically leads to better job performance and increased productivity. According to Gallup, increased employee engagement can boost profits by an average of $2,400 per employee per year.

When workers feel included, absenteeism decreases. Deloitte has found that if just 10 percent more employees feel included, the company will increase work attendance by almost one day per year per employee. The research found that diversity and inclusion lead to engagement and that they must go hand in hand. The combined focus on diversity and inclusion delivers the highest levels of engagement.

Employees who feel included and know that their contributions are valued are also less likely to leave their place of work.

6. An improved company reputation and broader influence 

Diversity and inclusion are issues for entire societies, not only businesses and corporations. Consumers demand diversity and inclusion and take note when organizations take practical steps towards these ideals. People that were previously excluded now become customers because products and services are also aimed at them. This has far-reaching benefits: companies attract and service more customers, which improves their reputation across a broader demographic and opens up the prospect of broader influence.

When an organization has proven that it has a culture that fosters diversity and inclusion, it becomes attractive to a broader demographic.

7. Enhances brand recognition

An enhanced reputation also improves a brand’s image. Today’s market is fast becoming one populated by Gen Z, the first generation that will have a non-white majority. For Gen Z, inclusiveness is a major priority. They and millennials demand that their own diversity is reflected in products, services, and marketing. On social media, we can see that these generations don’t only celebrate brands that make diversity a priority, but they also criticize those that don’t. These demographics see diversity as an important aspect of a brand.

An important note, if your company is not genuine about diversity, equity and inclusion, this is a mute point. Without genuinely caring about people, showing empathy and putting in the work to make a difference, your company will leave a bad taste in your target market’s mouth. If you are not serious about making a change, maybe take a look in the mirror to see if you are living up the  values you espouse.

8. Diversity has become a requirement of top talent

Prominent recruiting agencies are reporting that top talent are not just looking for compensation and perks. Glassdoor reports that diversity is a factor that could decide a candidate against an organization to work for.

To underrepresented groups, a diverse workforce is very important: nearly a third of employees and job seekers (32%) would not apply for a job at a company that lacks diversity. A diverse workforce has become a deciding factor when choosing a company to work for.

The bad news: most DEI initiatives fail

This is the sad truth. As mentioned earlier, this is not a simple issue to tackle. Many of these programs are well-meaning, but they fail or fade out after the initial enthusiasm that got it going.

Writing for Forbes, senior advisor to Fortune 500 companies, Glenn Llopis, remarked, “Most diversity and inclusion initiatives fail due to sincere ignorance.”  He references a quote attributed to Martin Luther King Jr.: “There is nothing more dangerous than sincere ignorance and conscientious stupidity.”

He says that in his talks with the people who put inclusion and diversity initiatives together, he often discovers that the initiatives lack depth and strategic thinking to support them. They mostly fit in under the heading “Corporate Social Responsibility” and are often not funded very well.

But the biggest problem is their premise. In reality, they aim to preserve the status quo, expecting current and new recruits to fit into the existing workplace culture. They express the issue in this question: How can we acquire, train, and change diverse employees for them to succeed and thrive in our culture? Not, how does our organization need to change in order to accommodate a diverse population with diverse needs?

Why it’s so hard and is taking time

It’s understandable that DEI initiatives are taking time to get established in the workplace.

1. It’s not an easy topic to talk about, especially not openly in a work environment. It’s highly emotive and can be very uncomfortable for different reasons. Hard conversations must be initiated and people will need to question things they have seen growing up or things that they have been previously taught.

2. The fear of offending is very real. Inclusion and equity is a minefield for uttering something that could inadvertently cause offense. You can’t blame companies for being reluctant to tackle inclusion and equity in open conversations.

3. If society can’t get it right, how can we? This must be the thought that runs through many a company leader’s mind. The issue is so daunting that many leaders simply don’t know where to start. That’s completely understandable, but it can’t be a reason for doing nothing.

4. The reality is that some people want things to stay as they are. Change is uncomfortable and might rob them of some of the privileges they have become accustomed to. This is not something that many would be prepared to admit openly, but it can be a factor in holding progress back.

5. Those that want change are not in leadership or other positions of influence. If the leadership doesn’t prioritize DEI initiatives as a core company strategy, it won’t have a life beyond the odd workshop. More often than not, those in leadership positions are convinced of the need for change but have no idea how to go about it.

An example in my own company

Knowing that intention wasn’t  enough and follow through is what was needed to make a big difference, we created a DEI task force and program to support a more inclusive culture. It was important for us to launch a DEI program to honor Tribal Health’s core values and mission of transforming Indigenous healthcare.

In order to properly start this, we needed to first take a very in-depth workforce survey to measure several aspects of the company. It was important for an anonymous survey to address if people from all diverse backgrounds and identities felt accepted, heard, valued, had empathy for others, and where to report issues like harassment or biasness. From this, a hotline was created for employees to report concerning events or voice opinions and a book club was formed that helped explore important themes like healthcare disparities and diversity. We also currently are looking to build out lunch and learns that feature different guest speakers on a variety of topics.

We were honored to hire Melody Lewis, Mojave/Tewa/Hopi and an enrolled member of the Fort Mojave Indian Tribe, to lead our program. As a social entrepreneur and founder of Indigenous Community Collaborative, she has been a huge asset.

Other ways we have been committed to diversity, equity and inclusion:

  • Recruiting from communities we serve
  • Paying for full tuition and professional development at Arizona State University
  • Maintaining relationships with different Native American organizations and the Healthcare Diversity Council
  • Flexible commute hours and hybrid WFH policies
  • Ensuring our own team is diverse
  • Hiring a consultant to improve our DEI training during onboarding
  • Starting a monthly book club focused on DEI topic

Concluding thoughts

Claiming to know how to implement diversity, inclusion, and equity correctly is like claiming to know how to handle adolescence. When we are in it, we all mess up. Books can only help so much. Living through situations and working with empathy and an open mind will teach anyone a lot.

As a starting point, it might be a good idea not to have any conversation or planning done without the input of those who were previously excluded. Talk to women, people of color, those who live with disabilities, different nationalities and sexual orientation – anybody that doesn’t fit the white cisgender male stereotype. Ask them what they need and start with basic steps that might make a big difference in their working lives.

Also, as difficult as it is, there are those who are succeeding. We can all learn from these pioneers.