Workplaces globally are undergoing tremendous change, propelled by emerging technologies and accelerated by the pandemic. The social justice movements of 2020 further pushed companies across the globe to emphasize diversity, equity, and inclusion (DEI). DEI is a powerful concept significantly impacting workplaces, yet there is a noticeable lack of clarity around it. In this article, we explore DEI, its significance, and how organizations like ABEX can embed it effectively into their budgets.
Understanding Diversity, Equity, and Inclusion
- Diversity: The presence of differences within a given setting, including gender, race, religion, ethnicity, nationality, sexual orientation, socioeconomic status, language, (dis)ability, age, etc. Diversity encompasses groups that are underrepresented or marginalized in society.
- Equity: Ensuring access to opportunities and resources for everyone’s development and success, especially for those at a disadvantage. Equity requires understanding the root causes of disparities in outcomes.
- Inclusion: Providing opportunities for development and full participation in decision-making processes within an organization. Inclusion ensures that diverse individuals feel welcomed and valued.
Importance of DEI for Organizations
Organizations view diversity, equity, and inclusion as crucial for gaining a competitive advantage. According to the International Labour Organization, “companies with more inclusive business cultures and policies see a 59 percent increase in innovation and 37 percent better assessment of consumer interest and demand.”
Companies with a diverse workforce tend to outperform financially. McKinsey’s 2020 “Diversity Wins” report found that companies in the top quartile for ethnic and cultural diversity outperformed those at the bottom by 36 percent in profitability. Incorporating diverse perspectives into problem-solving processes can yield better outcomes, especially when addressing complex challenges.
Employees and job seekers increasingly consider a company’s diversity an important factor. A CNBC workforce survey reports that 80 percent of employees prefer working at an organization that prioritizes diversity, equity, and inclusion. Organizations that ensure fair hiring and promotion practices, implement ongoing training, form diversity committees, and solicit consistent employee feedback are more likely to excel.
How to Build DEI into Your Budget
Effective DEI spending requires effort to create an impact that resonates with employees and goes beyond surface-level commitment. Employers must determine if there are barriers affecting employment, opportunity, or inclusion and whether policies need modification or elimination. Here’s an outline of best practices to ensure meaningful cultural change before spending on DEI initiatives.
1. Evaluate Your Current DEI Initiatives
Organizations must understand their workforce compared to the market to learn about existing inequities based on demographics. Gathering information about employee perceptions of the company and employee demographics provides an overview of workplace diversity and equity. This helps identify areas of concern and opportunities for improvement. Employee demographic data may include age, gender, language, race, disability, ethnicity, religion, nationality, family status, learning styles, personality type, and more.
2. Goal Setting and DEI Budget Planning
Diversity, equity, and inclusion initiatives differ significantly across companies. Practices addressing DEI include facilitating development activities to celebrate culture and improving DEI-related communication and philanthropy. Organizations should clearly budget for DEI initiatives, and leaders must communicate these priorities to employees and the business community.
3. Distributing the Budget
The distribution of a DEI budget depends on organizational goals. Budgets can be allocated to workplace functions or business activities, such as training, marketing, recruitment, and philanthropy. Companies typically allocate part of their diversity budget to cover general administrative costs like staffing and payroll for DEI-related staff.
4. Recruitment and DEI Team
The scope and responsibility of DEI departments differ for every company. Large organizations may have a chief diversity officer or a DEI team reporting directly to leadership and overseeing all DEI programs. Smaller organizations often rely on their human resources department. Salaries and recruitment budgets for DEI are typically dependent on the overall corporate DEI budget, with more funds dedicated to hiring in-house employees to promote these values.
5. Programs and Follow-Through
Building cultural and inclusive decision-making across the organization helps teams harness existing team diversity and capitalize on diverse ideas. These programs should be monitored to see outcomes, such as increased representation of identified groups and improved employee scores. DEI initiatives require ongoing workforce reviews to respond to changing needs. Establish procedures for follow-ups and periodic reviews of DEI initiatives and goals.
Conclusion
Diversity can enhance an organization’s working environment. With initiatives like ABEX’s DEI programs, employers can build inclusive workplaces with diverse talent. Embedding equity promotes impartiality and justice in processes, procedures, and resource distribution within a workplace. Embracing and celebrating diversity, equity, and inclusion in the workplace ensures a positive atmosphere for employees at all levels and helps an organization achieve enduring results.
