Over the past year, diversity, equity, and inclusion (DEI) has grown from being a buzzword into a business imperative. It’s no longer a concept organizations say is important — it’s one that impacts everything they do, from hiring and business development to hitting their financial goals, and more.
After a year like 2020, the importance of diverse, tolerant, and adaptive workforces is clearer than ever. As McKinsey & Co. found in their latest report, Diversity Wins [1], the most diverse companies are more likely to outperform less diverse peers in profitability. In the case of gender diversity, it was by 25%. In the case of ethnic diversity, that number jumps to 36%.
Yet despite findings like these, progress remains frustratingly slow. Organizations and talent teams striving for progress are often left unsure of which steps to take next — even more so without industry benchmarks to contextualize their own efforts and help light the way.
We want to solve this challenge and empower people teams with industry benchmarks and reliable data. So we partnered with Zogby Analytics to conduct an online survey of more than 500 HR decision-makers and over 1,000 employees and collected the results in our new report, The State of Diversity, Equity, and Inclusion Efforts: Progress, Priorities, and Opportunities.
Our objective is to provide a well-rounded picture of the state of DEI in 2021 from both the employer’s — and employee’s — perspective. Here’s a preview of 3 key findings from that report.
What does diversity, equity, and inclusion mean?
This term gets thrown around a lot in industry articles, newspapers, and business publications these days. And we’re glad to see it getting the attention it deserves. Before diving into the takeaways, though, it’s important to revisit the DEI acronym.
Here’s what we mean when using the terms involved:
- Diversity. At its core, it comes down to representation. It’s ensuring that individuals from different walks of life, with unique backgrounds and experiences, are consistently employed at a company. This includes looking at identity markers, such as race, ethnicity, gender, disability, sexual orientation, and religion.
- Equity. It’s about creating a fair playing field. It focuses on ensuring all individuals within an organization receive fair access, opportunity, and advancement. Equity efforts can include identifying and removing barriers, as well as making accommodations, so every employee has an equal chance at succeeding.
- Inclusion. A set of actions that focus on creating an environment where all employees feel welcomed, respected, and valued. An inclusive workplace invites everyone to participate and bring more of themselves into the workplace.
[Related: Diversity Hiring Strategies: Building Company Buy-in in 2021]
Takeaway #1: DEI is among the top 5 priorities for companies in 2021
The pandemic has rocked nearly every industry. As a result, employers have had to make many unprecedented changes — and fast. Every process, from hiring and onboarding, to team building and employee development shifted online, creating strategic and technological challenges for HR teams.
These unforeseen changes have made it more difficult for companies to prioritize DEI efforts, as organizations see a greater need to ensure continuity. Despite a pressing need to build up new skills among their people taking first priority, DEI is still a top concern for many organizations.
Top 5 priorities for employers this year: (2)
- 65% new skills and competencies among employees
- 35% succession planning
- 33% developing change management tactics
- 31% diversity, equity, and inclusion efforts
- 31% improving employee engagement/satisfaction
For those companies who are lagging behind their peers to make DEI progress, the outlook is getting more polarized. McKinsey found that the growing rift between high performers and low performers increases the chance of a performance penalty. In short, the time to act is now.
[Related: Diversity Hiring Strategies: Building Company Buy-in in 2021]
Takeaway #2: There’s a disconnect between employers and employees on DEI progress
Employers have made many strides in transforming their inclusion initiatives. Our survey found more than half have formalized a DEI strategy for their organization, while 47% have created or reviewed their existing DEI policies and have communicated them to employees.
Yet despite this forward progress, employees have a different perspective on the matter. A quarter of respondents say their company hasn’t implemented any equity measures and 24% say the same about inclusion. That’s a big disconnect between employers and their people.
2 out of 3 job seekers say that a diverse workforce is an important factor when evaluating companies and job offers (3).
This difference in experience shows that communicating to your workforce about DEI is critical — not only does it demonstrate to employees that you are actively working to drive change, but it also ensures workers aren’t misinformed or feel disconnected, especially in a hybrid or remote working environment.
[Related: 5 Diversity Recruiting Best Practices]
Takeaway #3: People teams are getting better at measuring DEI progress
Without measuring the effectiveness of DEI efforts, there’s no way to confirm whether or not true change is taking place. Evaluating company progress can be tricky because DEI permeates every part of the employee experience. So, while changes may be working effectively in one area, there may be a need for improvement in another. For example, while recruiting efforts may yield a diverse pool of candidates, diversity could be lacking when it comes to actual hires. Or, despite a diverse workforce, employees may feel excluded. That’s why it’s vital to measure DEI in a number of different ways.
“DEI is about both the actual state of the work environment and how people feel about that environment — and the tangible impact these can have on the organization.”
Annie Lin, VP of People at Lever
The good news is that people teams are getting better at measuring their DEI progress or success. The metrics they’re using? Hiring results, employee demographics, employee experience surveys, and check-ins with employees to track their efforts and impact.
[Related: 5 Practical Ways to Move the Needle on Diversity, Equity, and Inclusion]
The road ahead is long, but the future is promising
Ultimately, DEI is a journey, not a destination. Despite the work that awaits them, most organizations are optimistic about their ability to achieve measurable DEI success and are committed to finding the strategies and technology they need to succeed.
Is yours one of them? See how your organization’s DEI efforts, results, and challenges compare to industry benchmarks in our full report. Get your copy of The State of Diversity, Equity, and Inclusion Efforts: Progress, Priorities, and Opportunities.
- Source: McKinsey & Company, Diversity wins: How inclusion matters
- Source: Lever, The State of Diversity, Equity, and Inclusion Efforts: Progress, Priorities, and Opportunities
- Source: Glassdoor, What Job Seekers Really Think About Your Diversity and Inclusion Stats