Strengthening your employer brand using DEI

Once seen as mainly a compliance-based initiative, DEI (Diversity, Equity and Inclusion) has evolved in recent years to become a proven business strategy and now into a basic understanding that “it’s the right thing to do.”

Creating and sustaining a diverse and inclusive workplace reflects the wider societal acceptance of openness to individual talents, perspectives and differences. As the importance of an employer’s DEI reputation continues to increase, companies of all sizes are expected by employees, investors and consumers to establish more measurable, effective DEI initiatives with a lasting impact benefitting both employees and the company.

A 2021 report on inclusion efforts in Canada, part of the “Global DEI Census,” reported that 81 per cent of 1,413 Canadian survey respondents said their company is actively taking steps to be more diverse and inclusive. But the report also found widespread pay gaps at every level within organizations based on both gender and ethnicity, with the pay gaps being more pronounced in junior level jobs. And the survey found a significant portion of employees are likely to leave their current employer based on lack of inclusion and/or discrimination they have experienced, with ethnic minority employees being more inclined to do so because of such problems.

Increasingly crucial

Understanding DEI is thus crucial for business owners, managers and all employees as companies move to address this issue:

Diversity: The presence of differences within a given setting. In the workplace, that can mean differences in race, ethnicity, gender, gender identity, sexual orientation, age and socioeconomic class.

Equity: The act of ensuring that processes and programs are impartial, fair and provide equal possible outcomes for every individual.

Inclusion: The practice of ensuring that people feel a sense of belonging in the workplace. This means that every employee feels comfortable and supported by the organization when it comes to being their authentic selves.

Extensive research has demonstrated that effectively implementing DEI principles in the workplace and building a good DEI brand, besides promoting fairness, can provide extensive benefits. These include increased profitability and creativity, stronger governance and better problem-solving abilities, according to the World Economic Forum. “Employees with diverse backgrounds bring to bear their own perspectives, ideas and experiences, helping to create organizations that are resilient and effective, and which outperform organizations that do not invest in diversity,” the WEF states.

Diversity and revenue growth

For instance, a global study by Boston Consulting Group reported that companies with more diverse management teams have 19 per cent higher revenues due to innovation—demonstrating that diversity is not just a metric to be strived for; it is actually an integral part of a successful revenue-generating business.

“Growing research also suggests diverse teams make better decisions, are less likely to be influenced by unconscious biases and may benefit from differing perspectives,” according to a 2021 Mercer (Canada) Ltd. study. “Additionally, diversity of opinion can improve how managers source and identify talent within their own teams and portfolio companies,” the study said.

Achieving advances in DEI can also give your company an edge in recruiting. For example, a recent U.S. survey by American employer review website Glassdoor found 76 per cent of employees and job seekers report a diverse workforce is an important factor when evaluating companies and job offers. About 4 in 5 Black (80%), Hispanic (80%) and LGBTQ (79%) job seekers and employees report a diverse workforce is an important factor when evaluating companies and job offers.

Retaining top talent

Reports also show that most employees feel more engaged when they believe their organization fosters an inclusive workplace culture. They are more likely to look forward to work, take more pride in their job, have better physical and mental health and need less time off. Diversity and inclusivity also help retain top talent already within a company, all while attracting more outside talent, according to HR experts.

It also makes a difference in the marketplace. “Consumers also take notice of company behaviours and report doing business with – and avoiding – companies because of their behaviour, including the way they treat employees,” communications and marketing firm Weber Shandwick says. According to its 2020 study of employee and consumer attitudes: “Thirty-five percent of consumers say they have started or continued doing business with a company because of its employee treatment (28 percent have stopped for the same reason), while 36 percent say they have started or continued business because of a company’s commitment to diversity, equity and inclusion (versus 25 percent who have stopped for that reason).”

Investors increasingly looking at DEI

And a firm’s DEI brand is becoming an increasingly make-or-break indicator for investors. There are several motivating factors behind investors’ recent push to develop DEI allocation programs, Mercer Canada says in its report, “The Power of Change.”

“These include broad ESG-related goals, fiduciary or regulatory duties, and perhaps increasingly, a recognition that institutional investors — who control much of the industry’s capital — must act to address systemic imbalances,” the report states. “These investors have driven relatively rapid action on climate change and other environmental issues. Collaborative support could also lead to swift, positive change on DEI,” Mercer Canada notes.

In sum, it’s abundantly clear that today SMEs need to embrace DEI and commit to implementing its principles on an effective, ongoing basis.