Understanding Diversity, Equity, and Inclusion in the Workplace

Today, many businesses are making greater efforts to consciously bring in different voices, backgrounds, ages, genders and cultures into the workplace and taking active measures to ensure everyone feels welcomed and comfortable in their work environments and teams. Diversity, equity, and inclusion (DEI) in the workplace can be a tremendous asset to help companies and their employees grow and thrive.

While it's common to see the terms diversity, equity, and inclusion used together, they each have different meanings. Read on to learn what diversity, equity, and inclusion in the workplace means, the importance of each, and how you can promote DEI initiatives within your organization.

What is diversity?

Diversity is a catch-all word that represents the differences that exist between individuals. A diverse workplace is one where the workforce is comprised of a wide range of staff members of varying ages, genders, sexual orientations, abilities, ethnicities, education, and backgrounds. Workplace diversity can be expressed through hiring, engaging and empowering employees, and respecting the unique talents and perspectives that are expressed across these differences. Examples of diversity in the workplace are varied and multi-dimensional. One example may be having a leadership team composed of roughly equal numbers of men and women representing different religions, cultures, or sexual orientations. Another example can be having a mix of both older and younger workers on a team capable of fusing new ideas with deep industry knowledge.

What is equity?

Equity is promoting impartiality and fairness within the procedures, processes, and distribution of resources throughout your organization. It takes into account the fact that not everybody begins on the same "starting line" — that there are barriers and advantages that different groups of people within your organization face — and requires employers to implement systems that ensure all employees have equal access to the same possible outcomes within your organization. This may, for example, include implementing a standard performance review process that evaluates employees based on their progress meeting concrete goals, in order to minimize any potential for unconscious bias. Or, it may include having more transparency around the wage range for different positions, by making job descriptions more accessible to employees.

What is inclusion?

Inclusion is fundamentally about a sense of belonging and that experience is rooted in identity. If an employee feels excluded or uncomfortable in a work situation, chances are that person will struggle to identify with the larger whole. In turn, this can have the potential to impede a worker's creativity and productivity. Inclusion in the workplace is an organizational effort, practiced by every employee and leader, that aims to make groups of culturally, socially, and physically different people feel comfortable, accepted, and equally treated.

Inclusion examples can be any number of actions an organization takes to make this happen. It can mean ensuring wheelchair accessibility to all meeting rooms or providing technology to help the hearing impaired. Part of an inclusion initiative includes giving employees a chance to provide input regularly without being shut out of conversations during meetings or in social groups. It can occur in the form of making sure mentoring opportunities for advancement and leadership skill development are available to those who have traditionally lacked access to such opportunities or recognizing skill sets that come from different types of backgrounds such as veterans or older workers. Some organizations may encourage employee resource groups that are open to all staff members to highlight a group's culture and challenges so their peers gain new insights and appreciation for their colleagues' skill sets and perspectives.

What is the difference between diversity and inclusion in the workplace?

Diversity refers to the different number of traits and characteristics that make people unique, while inclusion refers to the behaviors and social norms that ensure people feel welcome. Diversity and inclusion in the workplace can positively impact employees' creativity, performance, and productivity, and can also extend a company's appeal to a wider market, which can be a valuable tool in a culturally diverse country like the United States.

What is the difference between diversity and inclusion? The terms are not interchangeable. Diversity in the workplace may focus on unique groups of individuals such as veterans, women, or a cultural minority group such as Hispanic, Latino, Black, or members of the lesbian, gay, bisexual, transgender, and queer (LGBTQ) community. Inclusion refers to specific actions an organization takes to empower diverse individuals to ensure they feel comfortable, valued, and heard. Ultimately, through an inclusion mindset, a business strives to help every member of its diverse workforce feel as if he or she identifies and belongs with their teams.

Why is diversity, equity, and inclusion in the workplace important?

Implementing a robust DEI program is worthy of consideration by HR leaders, business executives and owners: Many business key performance indicators — such as profits, sales, customer satisfaction, and innovation, among others — can often be improved with and investment in DEI. Here's a closer look at some of the key advantages that a diverse and inclusive workforce can bring.

Creates a positive environment

Diversity is the fuel for inspiring new ways of thinking and inclusion is the foundation of a person feeling welcomed, encouraged, and safe to share their ideas. Together, DEI have the ability to encourage a positive work environment. Fear, anger, and hostility can be the by-products of prejudice; the hostile or negative attitude towards others on the basis of their identity. In contrast, supported with a large body of studies and research, psychologists have long maintained that positive emotions help strengthen a person's intellectual resources and contribute to a group flourishing. Embracing diversity through hiring practices and inclusion can replace prejudice and friction with admiration, support, and empathy — all of which can foster a healthier, more positive work environment and desirable corporate culture.

Expands your talent pool

Static sourcing techniques and perpetually culling through the same resources and talent pool give HR limited exposure to potential candidates. A focus on diversity can help you attract new, highly qualified candidates. For example, consider partnering with a group for women engineers when hiring for technical positions or expanding your college recruiting program to historically diverse colleges. Focusing on diversity in the workplace at the sourcing stage can expand your candidate base and create a richer and more diverse staff.

Increases innovation with new perspectives

People from different countries, professions, and backgrounds have unique insights, skills, and perspectives. Bringing different ideas together can help push innovation forward and give team members a wider range of skills from which to draw for creative solutions. New ideas and a fresh way of looking at problems can help companies move beyond traditional applications and embrace ideas that eliminate roadblocks, open up new markets, and more.

Improves performance

There are many dimensions to diversity, equity and inclusion, but fundamentally committing to both is a powerful way to show employees that they belong and are valued. Performance is likely to improve when employees feel recognized, appreciated, and a part of the team. In this capacity, a person can feel comfortable and safe in expressing their differences. This too leads to improved performance. Diversity can also increase the potential for friction. But when handled respectfully, disagreement can improve a team's performance. When differences of opinion are supported with respect and healthy debate, team members are challenged to come up with more thoroughly explored options which can lead to better decision-making.

Increases employee engagement

Diversity can bring new perspectives to your company, but unless employees engage with others and share their ideas, those perspectives stay locked inside individuals. When staff members feel comfortable offering suggestions, safe from discrimination or harassment, and can depend on the integrity of their colleagues they will likely feel more comfortable taking a calculated risk such as sharing an unusual idea. In doing so, employees may feel more connected to the team and are likely to develop an increased sense of camaraderie and satisfaction – important elements to higher employee engagement.

Reduces turnover

Employees may leave for reasons outside of your control, but employee turnover may be reduced by improving the work environment. Practicing DEI in a meaningful way may reduce employee turnover and create a culture of retention. How? By fostering an environment of teamwork, productivity, and engagement, DEI inclusion can significantly reduce some of the primary reasons that drive employees to quit: negative, unsafe work environments, lack of satisfying work, and no opportunity for advancement.

Expands your markets

Diversity in your workforce can give you access to the talent, expertise, and perspective needed to expand into global markets. From language skills to the ability to navigate cultural differences, a diverse workforce can help you lead expansions from within, making it easier to support a consistent company culture and a high level of performance.

Improves reputation

Increasingly, customers want to engage with businesses that align with their values and treat their employees respectfully. Recruiting and encouraging people with different backgrounds to participate in your business generally establishes a positive reputation for that business. Potential clients and customers may feel more valued with a business that emphasizes respect and empathy. Connection to the community is another dimension that diversity may bring to your company's reputation. As diverse groups are employed and rise to leadership positions they serve as role models to their respective communities, perhaps inspiring others to do the same. Businesses that empower people with this ability are likely to be associated with positive characteristics.

Making DEI a priority

Diversity, equity, and inclusion is increasingly becoming an organizational priority, gaining a much-needed foothold in companies around the world. In fact, HR leaders say their companies are planning to increase the emphasis they put on DEI efforts by approximately 30% in 2021.*

But, creating and fostering an inclusive and diverse work environment requires more than simply recognizing that differences exist among your workforce; it means recruiting, hiring, retaining, and developing employees from many backgrounds, making sure their voices are heard and incorporated, and providing them with equal access to success within your organization.

To learn more about how your organization can get started on the developing a successful DEI program, read our Diversity, Equity & Inclusion Guide.

*Based on an online survey of 1,000 HR decision-makers at U.S. companies with 20 to 500 employees. Survey conducted from May 11, 2021 through June 3, 2021.