Diversity and inclusion in the workplace is vital to businesses that want to be profitable, robust and evolutionary. One of the benefits is improved and enhanced employee experience which in turn improves customer experience and business ROI. More importantly, a diverse and inclusive workplace is a sign that a business is an active part of the global community which includes people of all cultures, ethnicities, sexual orientations, socio-economic status, beliefs and values.

There have been advances in the fight against racism and prejudice but there remains a lot of work to do. According to a report from the Center for Talent Innovation, there are only four African American CEOs of all Fortune 500 companies and only 3.2% of senior-level managers are African American.

As prominent leaders have recognized, racism is systemic and institutional. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases and a member of the White House Coronavirus Task Force, was recently asked by Rep. Bobby Rush, D-Ill. at a U.S. House hearing if institutional racism was a contributing factor in why black communities have been affected more than white communities by COVID-19. “Obviously the African-American community has suffered from racism for a very, very long period of time and I cannot imagine that that has not contributed to the conditions that they find themselves in, economically and otherwise," Fauci replied. "So the answer, Congressman, is yes.”

Business leaders can play a key role acknowledging racism and making diversity and inclusion core values of business.

Make Employee Experience a Priority

Business leaders are in a unique position to improve the quality of life for employees. By enriching the employee journey, from initially sourcing and recruiting each employee, taking them through the hiring and onboarding process, to the nitty gritty aspects of daily work, all the way through the retirement process, a leader is able to provide employees with growth opportunities, ongoing education, a sense of belonging, accomplishment, camaraderie, engagement and personal satisfaction.

"Employees want to be able to feel a strong sense of affiliation to their organizations and when it is more diverse and inclusive - enabling many voices to be heard -it helps them to stay connected to the organization," said Richard Orbé-Austin, author and founder of Dynamic Transitions Psychological Consulting. "This sense of belonging increases employee satisfaction and the willingness to refer others to the company. They feel seen, valued, and heard, which are powerful motivators for the employee experience.” Dr. Orbé-Austin is a psychologist and diversity, equity and inclusion (DEI) expert, who consults with organizations about how to enhance the employee experience.  

Employee experience is about empathy, understanding that employees are people with hopes, dreams, families and feelings. Empathy is not just a buzzword - it’s an important core business value. A 2019 report from BusinessSolver indicated that 82% of employees would consider leaving their job for a more empathetic organization. More importantly, from an ROI viewpoint, the report also said that 78% of employees would work longer hours for a more empathetic employer. Empathy makes leaders more effective, facilitates employee productivity, loyalty and engagement and ultimately affects the bottom line.

By focusing on employee experience, leaders are able to build a sense of trust and connection with employees. Employees want to feel recognized as individuals, that their talents, abilities and insights are welcomed and they are a valuable part of the company, not in spite of their differences but because of them. That is where diversity and inclusion can truly make a difference, but it needs to be across the board.

Dr. Erika Pryor of EPiC Career Network said employees will only feel truly empowered when they are supported in their efforts rather than hampered as typically happens. “Companies can support an inclusive culture by creating a work environment where women and [people of color] can work absent of hyper surveillance, microaggressions and constant questioning, among many other day-to-day challenges which are emotionally taxing and ultimately distracting time and energy from doing great work,” she said.

A More Inclusive Definition of Diversity and Inclusion

The definition of diversity has changed quite a bit in the last 20 years. Historically, it referred specifically to gender, race and ethnicity but now the concept has broadened to include people of different ages, educational backgrounds and technical abilities, languages, religious and political beliefs, socioeconomic histories, sexual orientation and identity, cultures and abilities.

Inclusion is not the same as diversity. It refers to the sense of belonging that comes with knowing that an employee is listened to, heard, respected and valued by his or her peers as an individual. It means being able to embrace one’s own sense of individuality and subtle differences. D&I provide a sort of psychological safety net for employees, said Orbé-Austin. “Psychological safety refers to the fact that you feel comfortable voicing your concerns, ideas and critiques without fear of being punished," he said. "Diversity and inclusion can provide psychological safety and improve the employee experience by giving them freedom to be their authentic selves with a voice and power to impact the organization.”

The benefits of D&I in a business include a host of potential positive outcomes, including greater empathy, innovation, creativity, productivity, versatility, as well as higher employee retention, a broader skill set and a wider range of insights and perspectives. From an employee experience perspective, DEI can increase employee engagement.

“Empathy is the engine of innovation,” said Saleema Vellani, professor of design thinking and Chief Innovation Strategist of Innovazing. "To innovate, we often have to learn from those that we had the least in common with and that comes through empathy.” Research shows a positive two-way correlation, Vellani said, with diversity driving innovation and innovation reinforcing diversity and inclusion.

Customers of a business are themselves diverse but many times those who make up the infrastructure of the business are not diverse at all. From a cultural perspective and a business perspective, this just doesn’t make sense. “If your customers, clients, members, stakeholders, users or constituents extend beyond white men, then why wouldn't your leadership teams, boards, line workers, B2B vendors and service providers, and on down the line also be representative of your customers?" Pryor said. "If not, you are missing the many opportunities to keep your customers top of mind when you ignore innovations, contributions and great work accomplished when diversity and inclusion are embraced and supported at all ranks of your company.”

The Profit Motive

According to a recent McKinsey Report, businesses in the United States that embrace racial and ethnic diversity are more profitable. In fact, the report shows that with every 10% increase in the racial and ethnic diversity of a business’ senior-executive team comes a 0.8% increase in earnings. Additionally, businesses that are in the top quartile for racial, ethnic and gender diversity have a 25% greater likelihood of being more profitable than the national median for their respective industry. Diversity is beneficial for ROI.

Similarly, a report from Cloverpop entitled Hacking Diversity with Inclusive Decision-Making found that all-male teams were able to make better decisions than individuals 58% of the time. When the teams were made up of three or more diverse employees, their performance went even higher, outperforming individuals up to 87% of the time. Team diversity also enabled them to make decisions twice as fast.

“Research continues to demonstrate that diverse teams outperform non-diverse ones when it comes to creative problem solving," Orbé-Austin said. "For employees who are motivated by problem solving, it enables them to have a better experience when engaging in work projects, which require it.”

Further, research from Great Place to Work showed that DEI in the workplace not only increases the chances of a business surviving a recession, but allows them to thrive. Publicly traded companies with highly inclusive workplaces were able to survive the 2008 recession and gain a return on their stocks that was four times greater than the S&P 500. The report also noted that businesses that embraced diversity have more than three times the revenue growth over businesses that do not. Diversity pays dividends.

The effects that DEI have on employees also has a positive effect on the profitability and productivity of a business. Orbé-Austin said diversity and inclusion helps employees go above and beyond for the organization and its leaders. "When there is a recognition by the organization of the talents and skills from people of all diverse backgrounds, it facilitates a strong commitment level, allowing productivity to also be boosted," he said.

Related: 4 Ways to Embrace the Challenges of Diversity in the Workplace

DEI Fights Structural Racism and Prejudice

DEI lends itself by design to the creation of a team of people that by the nature of the group learn to appreciate the contributions of each member of the team. It’s hard to be racist or prejudiced when the people you rely on every day are members of the same groups that typically experience racism and prejudice.  

Often, people who are reluctant to embrace DEI are simply more comfortable around people similar to themselves. That is an issue that must be addressed in order for real changes to occur, Vellani said, emphasizing the need for people to get out of their comfort zones. “When we get comfortable with being uncomfortable, that's when we open the doors to innovation," she said. "In other words, diversity is a reality and inclusion is a choice. In order to embrace inclusion and have it be a catalyst for innovation, we need to have a high degree of emotional intelligence.”

Discomfort will lead some in the organization to resist change, Pryor said, and that is the moment when it's important to take a stand. "This is the critical moment when the rubber meets the road," she said. "Will you retract your changes because the discomfort from your white colleagues has you feeling ostracized (much like your few employees of color)? Or will you stand on the side of change and help people find ways to live into progress at the organization in a meaningful way? The effects of either decision each time it presents itself will have a significant impact on your company culture moving forward.”

Truly embracing a culture that values DEI means companies have to stop tolerating racist behaviors and practices and review how policies are implemented for any unconscious and conscious bias, Pryor said.

Learning Opportunities

Leaders: Practice Self Awareness

Getting out of their comfort zone is especially important for organizational leaders. It's important for leaders to recognize and own up to their own prejudices before practicing diversity and inclusion with employees. Before we can understand others we need to have a deep understanding of who we are and where we're coming from, Vellani said.

“We must be aware of the unique lens that we see through," she said. "How we see the world as well as how the world sees us. As we do that we develop more of that self-awareness, and we can better articulate our own identity and our biases. We can also move from strongly preferring our perspective and embrace other perspectives as well. Basically we stop looking for sameness, because innovation does not come from sameness.”

While there has been a lot of talk about diversity, organizational change has been slow to come, said analyst and author Lauren deLisa Coleman. “I think they need to address that this is about a perceived loss of power and ‘place’ first," she said. "They need to create honest conversations around that to get to the root of the issue and bring in sociologists at both the junior and senior employee levels over a series of interactions to identify subconscious cultural bias, review it, and help to create a way forward that is gentle and re-framed beyond ‘loss.’ It's not a zero-sum game.”

One of the main ways leaders can embrace DEI is to ensure people who hold positions of authority over employees include people who are diverse. When employees see people like themselves in leadership, they have a greater sense of belonging as well as a sense that what they say will be taken seriously.

"Having women and [people of color] -- that's right, more than a token one here and there for good measure--at the highest ranks is an impactful strategy to bring diverse voices to the table. Importantly, women and POC must be imbued with the same institutional power, access to budgets and support as their contemporaries to ensure we are equipped with the same tools for success.”

Social segregation is an issue that needs to be addressed. Business leaders can take the lead by encouraging social interaction among the diverse group of employees that work for them, particularly in terms of social events. "We all still tend to self-segregate in ‘off hours,’" Coleman said. "This is where job leads are often shared, trust built, etc. Business leaders need to start thinking creatively and offering cool, compelling events before, after work, weekends.” 

"It is shocking how most people stay within a certain demo. They are missing so much. Leaders can not only set an example, but go on ahead and give the greenlight for events and more, too!”

Embracing diversity is not simply an HR affair, Coleman said, adding that leaders should also "broaden horizontally" and think about additional ways to engage such as advisory councils to increase opportunity. 

DEI should not simply be a one-off exercise or a policy but rather a culture whose influence goes beyond the organization, Vellani said. “It’s about understanding your customers, understanding who could be your customer, your partners, your sponsors, your funders, your investors, and your community," she said. "Understanding it in a more holistic manner, using influence mapping, stakeholder mapping, different tools to get there, to see it from a bigger picture and zoom out is increasingly important.”

Pryor said companies should look closely at pay disparity to address inequalities within the business. If female employees or people of color are paid less than their white counterparts that's a good indicator that a business is not serious about DEI. "I'm sure there are some weak justifications such as 'experience' or 'background,'" she said. "These circumstances, which are countless and happen at every type of company, non-profit and government agency, clearly illustrate that a company is not interested in embracing a diverse and inclusive work culture.”

Pay disparity is well known in many companies and has a corrosive effect on company culture, deflating morale and sending diverse employees for the exits, Pryor said. "Right the wrong of pay disparity and compensate women and people of color the same as their white counterparts and let your company and teams know you have not been immune to racialized practices and you're actually doing the work,” she said.

Related: What Corporate Social Responsibility Looks Like in 2020

DEI and Corporate Social Responsibility

Corporate social responsibility, or CSR, has taken on a greater meaning in the last six months. Until recently, CSR was focused on sustainability, global warming and adherence to D&I principles, all geared towards the creation of a positive, empathetic image for the business. Now, the focus is on the COVID-19 crisis, with a greater focus on D&I as well as a direct focus on getting rid of racism in the workplace. It has also taken on the idea of white privilege and responsibility for the racial makeup of the leadership of an organization.

A 2019 report from GlobalWebIndex indicated that 68% of online consumers in the US and the UK would consider not using a brand based on poor or misleading CSR. Nearly 50% of those polled were willing to pay more for brands with a positive, socially conscious image. Consumers want to know where businesses stand on social issues. After George Floyd, an African American man, was killed by a white police officer, demonstrators took to the streets around the world in anger and protest against racism and police brutality. As a result, many companies, including Apple, Twitter, Reddit, Facebook and Google, publicly showed support for the Black Lives Matter movement, protesters and African Americans.

Employees also want to believe in the business they work and having a personal investment in the values of their employer gives them a sense of purpose and meaning.

Grindr, the LGBTQ dating app, showed its support in the fight against racism by removing its ethnicity and race filters and releasing a statement: "We will continue to fight racism on Grindr, both through dialogue with our community and a zero-tolerance policy for racism and hate speech on our platform." It then donated to the Marsha P. Johnson Institute and Black Lives Matter, while asking others to donate as well. Its customers and employees have no doubts about where the business stands on the issue.

All of which weaves back into the overall employee experience. When organizations incorporate and practice DEI as a core value of business, employees feel more comfortable expressing their ideas, are more loyal to a business, and have a sense of belonging and self-satisfaction that equate to higher productivity and ultimately profit for both employee and employer.

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