Companies have been struggling to establish diverse, equitable, and inclusive (DEI) work environments for some time now.
On the one hand, it is demanded by workers, candidates, the market, and customers, this year Monster reports that 38% of recruiters agree that candidates are interested in their DEI efforts, on the other hand, only 5% rated it as a top 3 priority.
Though it has proven to generate a more productive, innovative workforce and a higher bottom line for companies that implement it correctly, only 15% of employees see DEI initiatives as a priority for their organization, in comparison to 35% of managers.
So, what makes it so hard to align and achieve and how can companies better position themselves in 2023?
Advantages and Financial Impact of DEI
It can be a challenge to get employees out of their comfort zone, or have management embrace change when they feel things haven’t completely fallen apart.
Change involves some risk, which can also cause stakeholders to push back, especially in times of tightened spending. But with change also comes opportunity. Let’s take a look at some of the significant financial benefits.
- Inclusive companies are 1.7 times more likely to be innovative leaders. By having a diverse and inclusive workforce, your brainstorming meetings can have a broader range of points of view and ideas to work with.
- Companies with more diverse executive teams are 25% more likely to have above-average profitability according to a study conducted by McKinsey.
- Studies have shown that more than 75% of job seekers surveyed would apply to a DEI-friendly company instead of with a company with no DEI policies or programs.
- Inclusive teams perform up to 30% better than homogenous teams, and research shows that companies with strong diversity have more than 2x better cash flow per employee.
Why DEI Policies and Programs Fail
There are many variables contributing to the challenge of DEI in the workspace. So let’s uncover why DEI has become such a challenge to businesses and organizations worldwide.
Equality is not the same as equity
When businesses prioritize diversity without equitable programs that create inclusive structures, and provide support and resources for a diverse workforce, employees might still face negative experiences and feel unsupported.
No matter how diverse your team is, it’s never enough without building inclusive environments and policies that distinguish between equity and equality.
Providing the same resources to all employees regardless of background, needs and considerations around their role means that some employees don’t move up the ladder or reach the same level of success as others.
This means that solutions revolve around differentiating between different employee needs and committing to equitable programs and an environment that makes all employees feel safe and heard.
Many companies lack a pay analysis
Whether we’re talking about gender, race or ethnicity the pay gap remains a huge topic of conversation that some companies have yet to reconcile.
For many employees, equity in opportunities and pay are a challenge to find and attain, but beyond that, many companies aren’t conducting internal analysis to determine whether or not their pay scale provides fair wages to all employees.
A recent study by census determined that although the gender gap has narrowed, women still earn 82 cents to the dollar against a man. This is reduced however when comparing women from different backgrounds.
While white women’s earning ratio increased by 15% in the last 30 years, Black women’s earning only increased by 4% and Latina women by 2%. Without reassessing pay scale internally, it could take another 400+ years to close the wage gap.
The talent shortage is a myth
Companies often argue that talent is hard to find. Reports site talent shortages at record highs and difficulty finding skilled talent. And surveys show that employers are more confidant than ever that they will "find the right works for open positions this year."
Contrary to the current narrative, it's not the lack of talent that's hindering employers from filling key positions, but a lack of vision and flexibility when it comes to hiring practices.
Olivia Moore, consumer partner at a16z, notes that high levels of employee job transitions and labor shortages create a massive opportunity for companies to rethink their hiring strategies. Four major reasons for this change include:
* Increased globalization: new technologies and increased connectivity allows for a reduced emphasis on geography/proximity and increased emphasis on skills and qualifications in hiring.
Increased competition: A lack of job security matched with more short-term, transactional modes of work have tipped the scales in favor of the gig-economy.
Demand for flexible work opportunities: Employers are being asked to provide more flexible work environments, adaptable schedules and internal opportunities to develop new skills, in order to attract and retain top talent.
A new wave of marketplaces: Most industries and geographies lack a globally connected LinkedIn equivalent. Platforms like Localized, the recruiting platform for early-stage international talent, are helping employers build reputation and connect with skilled, qualified talent in international markets.
Sourcing and vetting qualified candidates is more critical than ever and requires new recruiting mechanisms and candidate pools. If employers don't start to broaden their strategies, they could face internal labor shortages.
How to Start Applying DEI Policies and Programs in Your Company?
Develop a clear understanding of the issues
The first step in this process is for your company to understand your existing internal structures, policies and gaps. Speak to employee resource groups to get a better assessment of the internal sentiment of your diverse workforce.
If your organization lacks an internal support group, begin to develop them and create dialogue around various topics. These types of efforts can make a huge effort on employee satisfaction and retention.
Speak to your employees
Asking questions about their experiences, opinions, and ideas is a great way to get feedback and start difficult conversations. Develop and circulate an employee survey and track the results to evaluate your current efforts. Include your executive level team, leadership, and workforce.
By doing this, your company will start to understand what changes need to be made and how to create leadership and stakeholder buy-in.
Once you have employee feedback and leadership support, you can begin to develop sustainable programs, opportunities and initiatives for your diverse workforce.
Create safe spaces for your employees to give feedback and inclusive environments where employees feel safe and welcome to show up with their unique life experiences.
Wrap up: By detecting the barriers and concerns your company might face, the path to a diverse, equitable, and inclusive workplace will become more accessible and manageable.
Begin from within your organization and work outwards, see where your policies currently stand and what the gaps are, then plan and execute. Take it slow and ask for feedback periodically, not just once. Your employees will be happy to speak up if they feel supported, so keep them in the loop.
Expand your DEI efforts into your recruiting strategies by sourcing qualified, skilled talent from platforms like Localized that host a diverse range of candidates from different cultural, geographic and linguistic backgrounds.
Applying strong and well-thought DEI policies and programs will take your company to the next level. Your employees will feel safe and become more productive, top candidates will want to work for your business, and customers will prefer your products or services over the competition. If you're interested in learning more about diversifying your candidate pool, you can learn more by scheduling a demo.