What Do Diversity, Equity, and Inclusion Really Mean?

The workplace is undergoing dramatic transformations. The velocity of change can be dizzying, ranging from the ways in which we communicate to corporate culture and our everyday job duties. Add new technologies to the mix and you have the indelible traces of a global pandemic. It is not difficult to understand why organisations must constantly develop their Diversity, Equity, and Inclusion policies.

Companies with more inclusive business cultures and policies have a 59% boost in creativity and a 37% improvement in assessing consumer demand.

This is particularly true for talent acquisition and hiring, where competition for the best candidates is as fierce as ever. As is the incentive for including diversity, equity, and inclusion into the workplace design. People are, after all, the driving force behind invention, and inclusive groups tend to produce better results.

Dissecting the Significance of Diversity, Equity, and Inclusion

Despite the renewed interest in DEI, there is still an obvious lack of clarity surrounding each of these terms. In some circles, one or more of these terms may be used interchangeably. It would be more productive to zero in on a specific aspect of this concept for the purposes of identifying improvements and launching initiatives than to use DEI as a catch-all term elsewhere.

So, what is diversity exactly? What exactly do equity and inclusion entail? And what is the distinction between each of these terms? Before we delve into each term individually, consider Gensler’s graphical representation of DEI, which demonstrates that each term has its own definition that, while distinct, is not entirely unrelated to the other two.

Source: Inclusion by Design: Insights from Design Week Portland; Gensler

Diversity

There is a tendency to describe individuals as “diverse.” Even with the best intentions, this feels like a euphemism for “outside of the majority” or “different from the dominant group.”

This framing of diversity is at best deceptive because it assumes we are all identical. At worst, it is a harmful oversimplification that excludes rather than includes people. Numerous job seekers, talent acquisition specialists, and HR professionals have expressed this concern.

Because all perceptions of diversity are identical, a blanket approach to diversity is ineffective. Some groups, such as millennials, view so-called “workplace diversity” as a combination of various backgrounds, according to our own observations. Similarly, older generations tend to view diversity through the lens of equitable representation. Diversity is less about what makes people different—their race, socioeconomic status, etc.—than it is about understanding, accepting, and valuing those differences.

Typical forms of diversity: 

We prefer to view diversity as a manifestation of a group’s composition, which is likely comprised of many or all of the diversity types listed above. It is a combination of the various differences represented and conversing within.

Consider the following NPR Staff Diversity Numbers, 2019 as an example. While this annual report may appear to be a simple breakdown of the “percentage of people represented from a given group,” it is actually a starting point for understanding how these percentages intersect and influence the company’s culture, morale, and goals. This chart contains insights that may aid in the development of new diversity initiatives.

Source: NPR’s Staff Diversity Numbers 2019. NPR

Equity

In contrast to diversity, which refers to the numerous ways in which people differ, equity entails providing equitable access, opportunities, and advancement for all of these diverse individuals. It involves levelling the playing field, to use a common metaphor. Here is an example of equity from the Northwestern Health Unit:

Source: Equity vs Equality. Northwestern Health Unit

Let’s use transportation as an example of a common topic in corporate environments. Not everyone in an organisation will own a vehicle or be able to afford daily public transportation. An organisation can create a more equitable environment by accommodating the full spectrum of transportation needs, including policies regarding start times and working hours as well as reimbursements for both automobile and public transportation travel.

Obviously, access, opportunity, and advancement concerns extend far beyond how we get to work. Women, as well as numerous minorities in the United States and the rest of the world, have been historically underrepresented. It is a problem that still exists today (as the data we shared above helps to show).

Successful equity initiatives must therefore integrate fairness and equal treatment into the organization’s very fabric. This necessitates a plan for establishing, preserving, and defending organization-wide equity, i.e. a framework that supports equitable talent screening, hiring, workplace standards, etc.

Inclusion

It is a common misunderstanding that environments in which diversity and equity are prioritised will inevitably foster inclusion. You have, after all, incorporated equitable practises into your organisational processes, resulting in significantly more diverse and well-represented teams. People must feel included in this organisation, right? 

Not necessarily, as it turns out.

Inclusion refers to the degree to which diverse team members, employees, and other individuals feel a sense of belonging and value within a given organisational setting. Even in the most diverse teams, a sense of inclusion is not always present. Women may be well-represented at the level of senior management, but they may not feel included due to ingrained gender norms, pay disparities, and other factors.

Source: CRU-Inclusion-Graphic Community Resource Unit Ltd.

Empathy is the foundation of an organization’s inclusion evaluation. Why? Consider that 48% of employees believe that respect is the most important factor in fostering an inclusive workplace (Quantum Workplace report). This requires not only respecting people’s differences, but also considering the environment from their perspective. Namely:

• Experience diversity for underrepresented groups
• There may be structural and social barriers to entry at play.
• Assumptions and blindspots that may be working against an inclusive environment.

Again, it is beneficial to consider these aspects of inclusion from the perspective of the employee. Do they experience a sense of community and belonging? Do they feel as though they contribute daily? Do they share a mission with their coworkers and peers?

How Diversity, Equity, and Inclusion Appear in Top-Performing Organizations

Transparency is crucial to the success of DEI initiatives. This is why so many of the world’s leading brands now publish online DEI reports on an annual basis. These reports provide valuable insights into the current state of DEI as well as the specific measures and programmes companies are implementing to move the needle in the right direction.

Consider the Google 2020 Diversity Annual Report. Here, one of the world’s leading technology companies not only reports on its diversity in hiring for the year (see graphic below), but also details the work it is doing to address inequities and barriers to education in the communities where it operates.

Source: Google Diversity Annual Report 2020. Google

Additionally, the Ford Foundation publishes an annual update on diversity and inclusion. The report details enterprise-wide diversity metrics as well as specific DEI initiatives, such as the operationalization of “inclusive leadership competencies” and “organisational citizenship behaviours.”

The Annual Diversity, Equity, and Inclusion Report from the Stanford Graduate School of Business is now available. As you will see, Stanford has implemented DEI planning, including increased diversity outreach and the formation of a new “student, faculty, and staff DEI council.”

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The Business Value of Diversity, Equity, and Inclusion 

Numerous recent studies indicate that when DEI is prioritised, outcomes are improved. According to a global report published by the International Labour Organization in 2019, businesses with more “inclusive business cultures and policies” experience a 59% increase in innovation and a 37% improvement in “consumer interest and demand assessment.” This is the type of innovation and foresight that companies need to survive and thrive today.

In fact, a mature Diversity, Equity, and Inclusion (DEI) Program has a positive impact on financial outcomes as well. A Kellogg Insight study of 49 gender diversity announcements by tech companies between 2014 and 2018 revealed that “if two companies released their diversity figures on the same day, the stock price of the company with 40% women would increase by 1% more than the stock price of the company with 30% women.” Therefore, we know that the shareholders are listening.

Another McKinsey & Company study found that organisations with gender-diverse executive teams were 25% more likely to achieve above-average profitability, whereas those with ethnically and culturally diverse executive teams were 36% more likely to achieve above-average profitability.

The persistent difficulties of inequality and underrepresentation
Regardless of how evident the connections between DEI and business success may be, underrepresentation remains a very real issue. The above-mentioned ILO study of companies from 1991 to 2018 also revealed that women’s representation in management ranged from 36% to 10% in North America (in the Middle East and North Africa).

Source: The Business Case for Change. International Labour Organization

Clearly, the business world has a considerable distance to go before fully realising some of the numerous benefits of DEI. In a recent review of the current state of workplace diversity, CNBC cited Mercer data indicating that 64% of entry-level workers in the United States are white. This rises to 85 percent at the executive level. And LinkedIn’s 2020 diversity report provides another window into the current state of affairs, revealing that despite the company’s best efforts, Latinos, Blacks, and People with Disabilities are still vastly outnumbered.

Source: Our 2020 Workforce Diversity Report. LinkedIn

Recruiting exceptional talent and promoting DEI go hand in hand

This small sample of market diversity trends is neither all negative nor all positive. There is still much work to be done. Businesses must create diverse workplaces if they hope to attract the next generation of talent, above and beyond ensuring productivity and financial gains.

Here’s how a customer of Ideal has taken steps toward a more diverse screening and hiring process:

“Using Ideal’s screening and matching feature, we spend less time sorting resumes and more time speaking with the most qualified candidates – a game-changer. The chatbot from Ideal enables us to engage and qualify candidates much more quickly, thereby enhancing the candidate experience. Ideal is now a core component of our HR technology stack!”

Corey S., Vice President of Talent Acquisition

For many job seekers, a prerequisite for prospective employers is the presence of diverse work environments. According to a Glassdoor report, 67% of job seekers consider workplace diversity to be an important factor when evaluating employment opportunities.

Taking Formal Steps Towards the Maturity of DEI

Successful organisations share a formalised DEI framework composed of three pillars:

Clearly articulated and disseminated DEI stance. Diversity, equity, and inclusion permeate the company’s mission, strategies, and practises in a way that is visible to the entire organisation in DEI-mature organisations.

Plans and programmes that specifically support DEI. Obviously, words can only go so far. DEI-mature organisations have or plan to implement forward-thinking hiring and onboarding practises, DEI steering committees, and consistent people and culture programmes.

A method for measuring performance and reporting on it. In addition to conceiving and launching DEI programmes, the majority of mature businesses also have robust tools for measuring and monitoring the performance of these programmes, such as software and regular reporting.

Diversity, equity, and inclusion must be a comprehensive business strategy, not merely an HR programme, in order to be successful. The definitions and distinctions we’ve made between diversity, equity, and inclusion will vary depending on the industry, business requirements, and context. To build a robust and sustainable DEI programme, however, a closer examination of DEI is required.