Benefits and Challenges of Diversity & Inclusion in the Workplace (2024)

The positive impact of diversity and inclusion is profound.

According to Deloitte, diverse companies enjoy 2.3 times higher cash flow per employee and Gartner found that inclusive teams improve team performance by up to 30 percent in high-diversity environments. Yet only 40 percent of employees agree that their manager fosters an inclusive environment.

Popular HR influencer, Brene Brown, says, “we need to do more than diversity and equity and inclusion. We need to create real belonging in our culture.” In her own business, Brown has reframed diversity, equity and inclusion (DEI) efforts as DEIB, which stands for Diversity, Equity, Inclusion and Belonging. Our philosophy on D&I is rooted in two themes: connection and belonging. These elements must go hand-in-hand in the workplace in order to truly make an impact.

What is diversity and inclusion?

Diversity and inclusion is an organization’s effort, policies, and practices that ensure different groups or individuals of different backgrounds are culturally and socially accepted and integrated into the workplace. An organization that focuses on diversity and inclusion will employ a diverse team of people that reflects the society in which it operates.

Diversity refers to political beliefs, race, culture, sexual orientation, religion, class, and/or gender identity differences. In the workplace, diversity means your staff consists of individuals who bring new perspectives and backgrounds to the table.

Inclusion means that everyone in the diverse mix feels involved, valued, respected, treated fairly, and embedded in your culture. Empowering all employees and recognizing their special talents is part of creating an inclusive company.

Both aspects of D&I are important一diversity without inclusion can result in a toxic culture, and inclusion without diversity can make a company stagnant and uncreative. Companies are starting to focus more on diversity, but many disregard the inclusion piece of the puzzle. Without a concerted effort towards both inclusion and diversity, your workforce will feel out of place and unsupported.

The Quick Guide to Diversity and Inclusion in the Workplace

What is DEI&B?

DEI&B stands for diversity, equity, inclusion, and belonging. In the workplace, these are organizational values demonstrated through hiring individuals of different backgrounds and perspectives and encouraging their participation and success. Diversity includes equal representation of different ethnicities, ages, genders.

What is belonging in the workplace?

The Achievers Workforce Institute defines belonging as an experience of connection, security, and community — it’s about feeling at home in one’s place, without reservation. A true sense of belonging at work is the deepest outcome measure of engagement.

Benefits of diversity and inclusion at work

• Bigger talent pool
• Increased employee engagement and trust
• New perspectives and innovation
• Better decision-making
• Improved performance
• Stronger business results and profits

A diverse and inclusive environment establishes a sense of belonging among employees, making them feel more connected and productive. Organizations that adopt D&I practices see huge gains in the form of business results, innovation, and decision-making.

Bigger talent pool

Expanding your recruitment searches to more diverse candidates—including background, ethnicity, age, etc.—widens your talent pool and increases your chances of finding the best hire.

Diversity will improve your current business and 67 percent of workers consider diversity when seeking employment. Hiring more diverse individuals is crucial in attracting more interested, qualified applicants.

Increased employee engagement and trust

When employees feel included, they’re more engaged and go the extra mile for the organization, having a ripple effect on profitability, team morale, and retention. People working in inclusive workplaces also tend to have better physical and mental health and take less leave for health issues. When companies support D&I initiatives, a whopping 83 percent of millennials are actively engaged in their work.

What’s more, by building an inclusive work environment, you can instill greater trust between employees and leadership. Since only 1 in 5 HR and engagement leaders agree that their employees deeply trust their company leaders, teaching leaders to recognize and reward employees for doing their best work can alleviate this issue. To be truly inclusive, all employees must recognize each other.

Learn how to strengthen engagement and facilitate trust with your workforce

New perspectives and innovation

The Harvard Business Review found a statistically significant relationship between diversity and innovation outcomes. The most diverse enterprises — in terms of migration, industry, career path, gender, education, age — were also the most innovative, as measured by their revenue mix. Diverse teams can also better identify products and services that fit the needs of emerging customer profiles.

Better decision-making

Diverse teams make better decisions. Cloverpop, an online decision-making platform, examined 600 business decisions made by 200 teams. They found that diverse teams have a 60 percent improvement in decision-making. In particular, gender-diverse teams outperformed individual decision makers 73 percent of the time, and teams diverse in geography, gender, and age made better business decisions than individuals 87 percent of the time.

Improved performance

Diversity is a competitive differentiator 一 McKinsey found that for every 10 percent increase in gender diversity, EBIT rose by 3.5 percent. Companies with significantly more racial and ethnic diversity are 35 percent more likely to outperform competitors. Harvard Business Review also discovered that diverse companies are 70 percent more likely to capture new markets, which, in turn, yields higher performance.

Stronger business results and profits

Harvard Business Review found that more diverse companies report 19 percent higher revenue. Additionally, businesses that are in the top quartile for racial, ethnic, and gender diversity have a 25 percent greater likelihood of being more profitable than the national median for their respective industry. This is especially true during times of crisis. Great Place to Work assessed hundreds of publicly traded companies before, during, and after a recession. Highly diverse, inclusive companies experienced a 14.4 percent gain while the S&P 500 saw a 35.5 percent decline in stock performance.

What are examples of DEI?

Bringing DEI to life within your organization can take on various forms. Examples include:

• Celebrating diverse holidays and important dates for different employee groups
• An address/statement to employees from the CEO/senior leadership team
• Creating mentorship programs for underrepresented groups
• Publishing content or a video on diversity in your workplace on your website or social channels
• Revising your employee value proposition to include a focus on DEI

What are 4 types of diversity in the workplace?

The four types of diversity in the workplace are:

1. Internal: Situations that a person is born into
2. External: Things related to a person but aren’t characteristics they were born with
3. Organizational: Differences between people that are assigned to them by an organization
4. Worldview: A multitude of factors (including the above) that come together to form our worldview

It’s important for an organization to understand and address each of these areas to better address diversity in the workplace.

What are the 4 pillars of diversity and inclusion?

To nurture and drive diversity, equity, and inclusion in the workplace, it’s important to have a framework that clearly guides an organization’s efforts. The four key pillars to include in your strategy should be:

1. Community
2. Growth
3. Education
4. Engagement

What are the core values of diversity and inclusion?

Equity and connection are values at the heart of diversity and inclusion. At its core, diversity and inclusion is intended to support different groups of individuals, such as those from different races, ethnicities, religions, abilities, genders, and sexual orientations.

Many organizations build their diversity and inclusion values and strategies into their overarching core company values, so that they are an intrinsic part of the organization’s guiding principles.

Challenges of diversity and inclusion

Creating a diverse and inclusive workplace is easier said than done. Below are some of the top challenges that organizations face when it comes to leveling up their diversity and inclusion strategies.

Leadership involvement

D&I initiatives must align with your organizational goals and values. A study of Fortune 1000 companies showed that 41 percent of respondents said their organizations had very informal diversity efforts with no structure because they’re “too busy”. Organizational change begins at the top. Upper management needs to allocate resources to D&I efforts, even in the face of uncertainty.

Once you’ve garnered adequate support, ask critical questions about your company’s workforce. Oftentimes, these questions bring about tough, but necessary, conversations to drive true change.

HR department and individual managers are responsible for enacting change and sustaining a D&I-centric culture. These groups should receive training and present a unified front that upholds D&I practices while measuring the company’s progress toward D&I goals.

Measurement

The only way to know if D&I is improving in your organization is to measure and track it. An annual survey is not enough. You need to practice continuous listening and collect real-time insights into what your employees are thinking and feeling.

Continuously give employees the opportunity to voice D&I concerns, as they have an in-the-trenches view of possible conflicts that managers may not. Use this feedback to think of new ways to incorporate people-centric initiatives and build a trustful relationship with employees to foster better overall performance.

Be sure to measure diversity and inclusion–related KPIs . Look at the change (or lack of change) in metrics. Coming up with diversity KPIs is relatively simple if you break down your workforce by gender, race, geography, etc.

Inclusion is tougher to measure, but there are two key ways to do it. First, look at the Inclusion Climate — equitable employment practices, integration of differences, and inclusion of decision-making. Second, measure the Perceived Group Inclusion Scale. This gauges employees’ sense of belonging and authenticity.

Remember: Gathering data is just one piece of the puzzle. You need to follow up and take action to ensure that you’re using insights to strengthen your approach and impact.

Find out how to fuel your HR team with data and properly measure

Intervention and training

Manager require training on D&I goals, why they’re important, and what’s expected of managers. Leadership teams need to lead by example, from integrating D&I into their hiring interview process to the way they treat their fellow employees. Every manager should build an inclusive team environment by recognizing their biases, listening to their employees and recognizing them for their everyday efforts. Employees too should receive D&I training to help avoid and overcome biases.

Training sessions need to show that companies know about current biases in the workplace and explain how your D&I program is an opportunity for all employees to acknowledge and improve.

Silos

Many organizations struggle with silos which encourage exclusivity rather than inclusivity, decrease productivity and productivity, etc. Before deploying a recognition program, Meijer, a family-owned superstore based out of the U.S. Midwest, was aware that silos could severely hinder collaboration. After implementing their recognition program, the strength of networks in each Meijer store location increased.

Discover how to strengthen connections across your organization

Breaking down silos and increasing connections across your company are instrumental in strengthening D&I throughout your organization. Unsure where to start? Try Meijer’s approach and start leveraging the power of employee recognition.

How to foster diversity in the workplace

• Base standards on objective criteria
• Frequently recognize and reward employees
• Leverage tools to measure D&I
• Double down on employee resource groups or committees
• Practice psychological safety
• Gather employee feedback
• Incorporate D&I into hiring practices and beyond
• Document best practices and policies

There are myriad ways to start incorporating diversity into your workplace. Here are a few of the ideas to get started.

Base standards on objective criteria

Objective criteria reduces the chance of bias or prejudice. Meet as a team to openly discuss these criteria, and build collaborative actions plans together to avoid unconscious bias as much as possible. One way to collect everyone’s point of view is to use something like Achiever’s Action Builder feature which allows managers and teams to find a focus, build a plan, and collaborate on effective action.

Frequently recognize and reward employees

Appreciating employees for who they are shows that you care about them as a person. Take full advantage of an engaging recognition and rewards program that encourages your workforce to publicly celebrate their peers’ strengths, but also their uniqueness. Employees should be recognized by their c-suite, managers, and peers for everyday wins, both small and big.

“From a leader’s perspective, a tool like recognition should be used to promote inclusive leadership.” – How HCM Technologies Can Scale Inclusion in the Workplace by Gartner

Recognition tools should be used to promote your company values, especially the ones that speak to your company’s D&I initiatives. Give your employees the ability to tie each recognition to a particular company value supporting D&I.

Access 4 must-know tips on how to leverage recognition to boost community

Leverage tools to measure D&I

Use staple HR tools to monitor your progress toward becoming a more inclusive, diverse company. Employee engagement software can help you better understand your organization’s blind spots. Use your voice of the employee solution to measure how your workforce is feeling about current D&I initiatives and gather feedback on areas to improve. If you have a recognition platform in place, look at your recognition activity dashboards to immediately identify any teams or individuals that might feel underappreciated.

Consider adding other typical D&I KPIs like the percentage of employees belonging to minority groups, average tenure of employees based on age or ethnicity, etc. Measure these KPIs before and after you implement new D&I initiatives to understand where you are improving and where you can do more.

Double down on employee resource groups or committees

Building employee resource groups (ERG) or networks is a fantastic way for groups of people to connect at work, especially at large organizations in which employees can feel disconnected. For example, consider starting a women’s network, LGBTQ+ network, or D&I committee.

Pro tip: Jeff Cates, CEO and President of Achievers, shares 11 employee networks to consider for your company to build an inclusive culture.

You can use your internal platform’s features to announce these groups so employees can join, to feature upcoming events, or to request idea submissions.

According to Jeff Cates, employee networks are “perhaps the single greatest way to promote the type of inclusive culture that helps people thrive and businesses stand out.” Outside of ERGs, think about establishing a D&I steering committee that consists of employees from all areas of the business to drive and advocate for D&I initiatives.

Companies need to embrace D&I for an improved employee experience. Ask yourself, “How are my employee networks and other D&I initiatives guided by an overall D&I strategy?” As you build and grow your employee networks, remember to focus on creating thoughtful conversations and strategies around D&I in the workplace.

Practice psychological safety

It’s imperative that a workplace is a safe space for everyone. Establish a culture where people feel empowered to flag situations that are alarming, or even just uncomfortable. Workplaces that ensure psychological safety and trust help employees to speak up.

Gather employee feedback

Surveys and continuous feedback platforms give an opportunity to hear information directly from employees. Gathering honest feedback on a frequent, real-time basis allows you to course-correct if something is awry. If you’re not already, try leveraging pulse surveys to regularly capture your employee’s input and gather the pulse of engagement. Ask specific questions related to D&I to get employees’ thoughts on how to build a more inclusive work environment. Be ready to take action on feedback—this is critical for employees to provide feedback in the future. Show them that their voices matter.

Learn how to take the pulse of employee engagement at your company

Incorporate D&I into hiring practices and beyond

Diversity needs to be part of your hiring practices. Set up diverse panels of interviewers who will select candidates based on skills and experience. Train your hiring managers on unconscious bias and what can’t be asked during an interview, such as aspects of a candidate’s personal life or religion. Employee too should be open and conscious of biases they might bring into a meeting or one-on-one session with a colleague.

Consider virtual coffee chats to connect two employees at random to meet and talk about anything they want. This helps employees across various locations and departments get to know each other, build meaningful relationships, and create a culture of belonging.

Document best practices and policies

A company’s policies and practices should be available to all workers at all times. The code of conduct should be updated regularly and outline the company’s approach to diversity and non-discrimination. Consider adding a non-discrimination module into your annual employee training to reinforce its importance to the company. Other policies should clearly summarize the company’s stances on compensation and benefits, and employment conditions and termination.

Reap the benefits of a diverse and inclusive workforce

Not only is D&I a move in the right direction morally, it is also smart from a recruiting and company growth standpoint. As many as 57 percent of employees believe their companies should improve diversity among the internal workforce. Furthermore, an increasing body of evidence suggests that organizations that maintain their values and commitment to employees during economic hard times are the ones that continue to thrive.

Today, there are many tools that companies can use for D&I initiatives. A great platform, however, tackles D&I from many angles—it helps support your ERGs, rewards employees working on D&I initiatives, offers public and inclusive recognition, and even infuses specific values around D&I into your program. The platform should also help employees feel heard and empower managers to gather and take action on feedback, especially regarding diversity and inclusion. The Achievers platform delivers on all fronts.

Achievers is committed to creating a culture of belonging. Our award-winning platform is a great fit for organizations looking to strengthen their D&I initiatives. Start reaping the benefits of the Achievers platform by requesting a live demo.