DEI: What Is It & Benefits

Diversity, equity, and inclusion (or “DEI”) is a key value for many organizations. DEI refers to the composition of a company’s workforce and how the company treats its employees. Companies that excel in DEI generally perform better for many reasons. For example, companies that excel in DEI are able to attract better talent, better understand their customers, and develop better ideas. This article will share more on several DEI topics including: what is DEI, what are DEI’s goals, what are examples of DEI, why is DEI important, and what are the benefits of DEI.

What Is DEI

You may be asking yourself – well, what is DEI. DEI stands for diversity, equity, and inclusion. You can think of DEI as three main areas:

Diversity

This refers to the composition of the workforce – aspects of diversity include but are not limited to: race, ethnicity, sexual orientation, physical ability, and gender

Equity

Equity refers to how people are treated; specifically, if people are treated equitably, they will have similar end results. Equity differs from equality. Equality refers to when everyone is treated the same. On the other hand, equity takes into account people’s experiences and circumstances

Inclusion

Inclusion refers to including and embracing the entirety of the workforce

DEI Goals

In order to achieve a diverse, inclusive, and equitable workforce, it is important to set clearly delineated goals across these dimensions. These goals will help ensure progress is made for DEI issues. DEI goals include:

• Increasing the representation of women across the firm
• Ensuring people in the same role make the same amount of money each year
• Implementing practices for inclusive recruitment including resume writing
• Hosting inclusive events, e.g., for LGBTQIA+ month
• Adding a training for staff on inclusive language

DEI Topics

DEI topics are wide in nature and include:

• Gender diversity
• Ethnic diversity
• Racial diversity
• Inclusive language
• Equitable pay
• Microaggressions

DEI Examples

DEI examples include:

• Having diversity targets throughout the organization
• Having diversity groups throughout the organization (e.g., for women)
• Having equal pay for the same job

DEI vs ESG

While DEI and ESG both aim to better the workplace, their aims are different. Specifically, DEI aims to improve the diversity, equity, and inclusion of the workforce. On the other hand, ESG focuses on environmental, social, and governance issues and seeks to improve the company’s performance across these dimensions.

DEI Best Practices

DEI best practices include but are not limited to:

• Ensuring diverse representation, especially in leadership roles
• Developing an inclusive recruiting process
• Having trainings to combat microaggressions
• Having trainings on inclusive language
• Having DEI resource groups

Why Is DEI important?

DEI is important for many reasons. First and foremost, strong DEI practices encourage a diverse and equitable workforce with engaged employees with differentiated points of view. In addition, companies with strong DEI practices generally perform better. For example, a study from McKinsey showed that companies whose executives had the top quartile of gender diversity performed better than companies whose executives had the bottom quartile of gender diversity (read more here).

Benefits of DEI

As stated earlier, the benefits of DEI are multi-faceted and lead to a more engaged workforce and, as a result, better business performance. Benefits of DEI include:

• Hiring top talent
• Having a more engaged workforce
• Retaining top talent
• Having a diversity of viewpoints and, as such, making better decisions
• Increasing employee engagement and productivity

Some Say DEI Is Toxic- Is It?

Some push back on DEI concepts. DEI in itself is not a negative thing, though at times it’s implementation leaves a bad taste in people’s mouths. Arguments against DEI include that DEI is toxic and actually can create reverse discrimination. The reality is that proponents of DEI, need to walk their inclusive talk- even with DEI dissenters. Statistics show that DEI is somewhat of a political issue as “about 78% of Democratic and Democratic-leaning workers said that focusing on DEI at work is a good thing, as compared with 30% of Republican and Republican-leaning workers” (HR Dive). Because of this, competing narratives can cause confusion and create hesitancy. This is a very real issue that companies need to take into account with implementing DEI initiatives.

The goal is that DEI initiatives create a better environment through developing a diverse, inclusive, and equitable workplace. The vast majority of  people can get on board with this goal, so it’s up to companies to implement DEI in a way that hears the voices of all involved. Granted, this can be tricky!

DEI Statistics

As mentioned earlier, one of the benefits of being a leader in DEI initiatives is better business outcomes. This benefit has been supported with several research studies. For example:

• Per a LinkedIn study, over 70% of employees and job seekers considered diversity an important aspect to consider when determining which job to choose
• Per Pew Research, nearly 60% of works thought focusing on DEI at work is a good thing
• Per McKinsey, companies that deliver on gender and ethnic diversity have better financial performance than laggards in the field

Conclusion

Therefore, DEI assesses the diversity, equity, and inclusion initiatives an employer has. Companies that excel in DEI generally perform better. Reasons they perform better include: more diverse points of view, more engaged employee base, etc. Employers can set up goals to monitor their progress on achieving a diverse, equitable, and inclusive workforce. For example, employers can track the percent of leadership that are women. Given the importance of DEI, it is fair game to ask about companies’ DEI initiatives during the interview process. For example, you can ask about employee resource groups for LGBTQIA+ individuals. To get tips on how to ask these questions to interviewers, consider getting 1:1 coaching with an ex-MBB consultant here.

 

Additional Resources:

• Diversity Consultant: What Do They Do?
• Why Networking is Crucial in Consulting Recruiting (Podcast)
• Consulting Resume: Complete Guide