In the past years, several world events have caused a dramatic shift in society. A global pandemic that caused millions of deaths and forced us out of our offices and schools, a global movement to end systemic racism, and the MeToo movement to challenge sexism. These societal changes have not gone unnoticed by insightful business leaders, who must consider the impact on their employees – but they also need to acknowledge that the impact will be felt differently by specific segments of the workforce, e.g., women, people of color, members of the LGBT community, and those with special needs.

The pressure to change how they do business comes from leaders, but also from the public, who want to know and see the measures that companies have put in place to increase diversity, equality, and inclusion in their workplaces. This message must also reach job seekers, 70% of whom, according to research, are looking to work for a company with a dedicated Diversity, Equity, and Inclusion (DEI) commitment.

Due to this demand for DEI investment and progress, companies have begun to see DEI as less of a ‘business case’ and more of a ‘business imperative’, that must be taken seriously. Without these measures, they will be unable to attract and retain the best people. Companies have already implemented a range of DEI practices, but little research has been done on what actually works. That’s why we were delighted to see this study, by the Wharton School of the University of Pennsylvania. Here’s a summary of the research, the insights gained, and how they fit in with our thinking around DEI practices.

The Research

There is a broad range of DEI practices to choose from, many of which are being implemented in companies around the world, but little assessment of the extent to which these practices drive workplace outcomes. The first study to investigate this, the Inclusion and Belonging Assessment, examines these relationships, with a survey of over 1600 working adults across 15 industries in the USA. This research was done while the US was dealing with two peaks in COVID-19 infections and a surge in interest in the fight for racial equity, justice, and inclusion.

The research looked at the issue through a ‘restorative lens’, seeing the workplace experiences as ‘ailments’ and the DEI practices as ‘medicine’.

“.. instead of emphasizing the robustness of companies’ DEI practice toolkits or demographic differences in employee experiences, we examine the relationships between DEI practices and outcomes. That is, drawing on another medical concept, we provide an evidence-based approach to examining DEI practices in the workplace. ”

The research broke the workplace practices into seven categories and examined how they affected the key concepts of Diversity – Inclusion – Belonging – Equity – Respect.

1. Diversity Recruiting Initiatives
2. Education and Training
3. Internal Diversity Partners
4. Managerial Involvement
5. Mentoring and Sponsorship
6. Physical Visibility
7. Workplace Policies

We have highlighted the most important practices, which drove many outcomes. This research confirms Semler Company’s views of these critical practices, though we have different names for them.

Our DEI MVPs

We have been working with organizations for many years to help them identify and implement their DEI policies, and we have come up with a shortlist of our ‘Most Valuable Players’ or MVPs.

Leadership and management

This corresponds to ‘Managerial Involvement’ from the research, which they define as ‘Supporting employees and DEI through managerial behaviors’. For Semler Company, this necessitates training and the establishment of practices of critical self-reflection, but also covers mentoring approaches from #5 on the above list.

Unambiguous value, governance, and policy statements

Corresponding to ‘Workplace Policies’ from the research, this involves creating a well-structured overall framework with regularly reviewed policies. Care should be taken to ensure that these policies don’t contradict each other, and that the requirements (to-dos and behavior) are easy to understand. Companies need to ensure that these measures aren’t just written, published on the website, and then forgotten. Communication is a critical component of this step, and this is often an IT systems issue which needs to be addressed.

Informal networks

In the research project, known as ‘Mentoring and Sponsorship’, these are programs that create community and alliances, for employees generally and specifically targeted at members of underrepresented groups. It is important to note that these networks work best when they are self-organized and have a push and pull effect. This is something Semler Company has helped to set up and continues to support.

Measuring and reporting

Once the policies have been written, the management trained, the employees informed and connected, it’s time to assess which of the practices had the most significant impact on outcomes. Defining KPI sets and targets that encourage the desired behaviors is not always easy but key to success. Taking some time and effort to do it right and implementing targets in performance management procedures has proven worthwhile.

It is essential that companies conceive and implement these measures holistically, not individually. These practices work best in combinations, e.g., creating and distributing policies that state values and commitment to DEI is an excellent first step but will only show results when employees see this commitment in their everyday working life. Managers who explain the workplace policies also need to help employees use them if required, e.g., by reinforcing a zero-tolerance policy for disrespectful or abusive behavior and connecting this to the workplace policies.

Summary

The creation and implementation of DEI measures and practices provides an opportunity for companies to gain business momentum by profiting from diverse perspectives. Companies with a higher representation of women on their boards of directors, for instance, outperformed their peers by 53% in return on equity and 42% in return on sales (Willis Towers Watson’s Insurance Consulting: How inclusion and diversity plays a critical role in risk management 2019). Companies also improve working conditions for their employees, which leads to higher employee retention rates and compliance with upcoming ESG regulation. The reputational gains when the company is seen as a welcoming environment for underrepresented groups cannot be underestimated

Semler Company can help you put together a well-considered framework that suits your business, industry, and company philosophy. We can also help with the implementation of this concept and ensure that you have a system in place to assess the outcome later and adjust measures as needed. Get in touch with us to find out more.