Diversity in the workplace — or the lack thereof — has been a hot button issue for decades. But in recent years, the call for companies to take action and create equity in professional settings has reached a fever pitch. As employers continue to battle a challenging talent market, it's clear they must make changes to build productive workforces and sustainable success.
In May 2020, the murder of George Floyd ignited a racial reckoning across America, and today, those challenging and valuable conversations are ongoing in both personal and professional worlds. Employers are increasingly investing in diversity, equity and inclusion (DEI) programs to create safer spaces for all employees, and examining their own recruiting and hiring practices to build workforces that more accurately represent the diverse communities they serve.
But progress, of course, takes commitment and time — and the road to full equity and inclusion is a long one. Consider this: Despite an increased (and much lauded) focus on DEI efforts, according to new research from EBN's parent company, Arizent, most non-white employees are less likely than their white counterparts to report feeling valued and that they belong at their organization. Black, indigenous and people of color (BIPOC) report that their professional input is requested significantly less than their white colleagues.
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Humanity aside, that's also bad business: According to 2019 research by McKinsey, companies that exhibit cultural, ethnic and gender diversity are significantly more likely to outperform less diverse organizations on profitability. Plus, employees who work at companies that exercise a genuine commitment to DEI are significantly more likely to view their workplace as a healthy, successful one.
So what's the hold up? To fix the diversity problem still challenging so many organizations across the U.S., employers have to learn to walk before they can run. Step one is identifying the root of the problem; from there, it's about identifying who is being impacted, acknowledging the challenge and working to change or improve it. We dug into this new research to explore the state of inclusion across industries, the effect a dedication to DEI can have on business, and how people leaders and HR professionals can continue to champion diversity in their firms.
For workers of color, inclusion remains elusive
Across industries, BIPOC and Hispanic employees — non-white men and women making up 21% of those surveyed — are more likely to feel isolated and excluded at work (see Figure 1). That's impacting comfort levels when it comes to contributing valuable ideas at work: Non-white employees are twice as likely to have their input overlooked and feel uncomfortable disagreeing in meetings.
The lack of inclusion is felt most acutely by BIPOC and Hispanic women, who frequently feel unsupported at work. While 67% of white men, 66% of white women and even 63% of non-white men feel supported and helped by colleagues in positions of power, just 47% of non-white women agree. In addition, only 56% of non-white women report that their curiosity is encouraged at work, compared to 73% of white women.
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The loss of that intellectual capital is a worrying trend for business- es that understand the long-term value of diversity within all levels of an organization. Across all industries surveyed, achieving leadership roles within organizations — director level or higher — appears to be significantly more challenging for men of color as well as all women, with women of color again seeing the worst outcomes (see Figure 2).
Does DEI have a reputation problem?
Most respondents feel strongly about the value different experiences can bring to the workplace. In fact, 95% of respondents across all demographics and industries agree that they have something to learn from people who are different from themselves.
And yet, it's clear that when it comes to DEI policies, there's plenty of nuance and even contradiction within employee sentiment. Nearly all respondents feel they can benefit from working with people unlike themselves, but just 66% of total employees believe that companies make better decisions with a diverse employee base — though responses vary significantly between white men (61%) and non- white men (68%) as compared to white women (78%) and non-white women (85%) (see Figure 3).
Employees who have positive feelings on DEI efforts see "diversity" and the always-valuable "diversity of thought" as going hand-in-hand. In contrast, employees who do not think companies' decision-making abilities are boosted by diversity express concern that "diversity" has become a priority over creating "diversity of thought," with one respondent sharing: "I think that sometimes [DEI] becomes overemphasized above merit and actual productivity. Additionally, it is rarely about tolerance and more about being a full supporter of someone else's views or values — especially to the exclusion of more conservative viewpoints on some cultural issues."
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The (significant) ROI of DEI
When discussing DEI efforts, the question inevitably comes up: What's the ROI on these programs? Despite any skepticism across industries, for companies that have made active commitments to and investments in DEI — whether by implementing ERGs or using equitable hiring practices — the positive results are practically immediate. For example, 29% of companies report having diversity targets for hiring. Among those, race, ethnicity and gender targets are most common. When asked how successful their company had been at achieving its diversity target goals over the year, 93% reported that they'd been moderately to extremely successful (see Figure 4).
Of course, some of the concerns expressed by respondents — such as DEI efforts shifting hiring to metric-based rather than merit-based — may be revisited when discussing these statistics. But this kind of focus on inclusive hiring brings success to organizations beyond DEI goals.
According to McKinsey, companies with women in more than 30% of executive roles are likely to outperform companies with lower gender diversity. In 2019, the firm found that the top quarter of ethnically and culturally diverse companies outperformed the bottom quarter in profitability by a significant 36%.
Organizations that have a strong commitment to DEI score well on five pillars that track workplace health: do leaders create a sense of belonging; is the input of employees actively requested and respected; do colleagues use their power to help the disenfranchised; is curiosity encouraged; and are honesty and integrity seen as core values?
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This kind of culture can greatly affect the valuable exchange of thought happening within an organization. When employees interpret their organization as a healthy one, negative experiences dissipate and workers' comfort levels and willing- ness to bring their best ideas to the table can flourish (see Figure 5).
Perhaps one of the biggest tests of a company's DEI programs is whether or not employees would recommend their companies to minority groups. Considering the current state of recruiting, employers need all the help they can get.
More than 80% of employees whose companies have a genuine commitment to DEI would recommend their company to women, more than 70% to non-white employees and employees with different religious views, and more than half to LGBTQ people (see Figure 6). That's a significant opportunity to engage top talent — and an indisputable sign that investing in inclusive cultures can shore up a company's future success.
