DEI in the Workplace

Improving Company Culture and Performance with Diversity, Equity, and Inclusion

The first step to making a company stronger is to make the workplace fair and welcoming. We think that DEI at work works best when there is a lot of workplace diversity and all decisions are made fairly and with everyone in mind. Diversity is like energy that could be used. Equity and inclusion make it happen by deciding who gets opportunities, how work is divided, and how ideas flow. These choices can lead to better business outcomes if done correctly.

This report connects new research on diversity, equity, and inclusion to specific actions like making job descriptions better, doing structured interviews, and strengthening employee resource groups. You can also see DEI projects that you can do without spending a lot of money. You will learn about how psychological safety makes the workplace fair, how consistent habits lead to better financial performance, a healthier work environment, and a competitive advantage.

We also show you what to measure, how to link changes to business outcomes, and how to make a 90-day plan that fits with your company culture. Read on for a useful guide that you can use and improve.

Definitions that Help People Act

Diversity is About Who Is There

It includes things like race and ethnicity, sexual orientation, gender identity, nationality, disability, age, and other things that people have been through. Having a diverse workforce means having people from different backgrounds and ways of solving problems. This helps diverse teams spot risks and find opportunities more quickly. Senior leaders are more likely to find weak spots and better ways to add value when they ask for diverse perspectives on important decisions and really listen to them.

Equity is About How Opportunities Are Shared

Workplace equity means that everyone has equal access to information, tasks, sponsorship, pay, and chances for professional growth. It also means that everyone has equal opportunities to get the skills they need for the next job. Equity stops favoritism and gives rewards for things that have been shown to work. People are more likely to trust their bosses if they know they are being treated fairly and the rules are clear. This shows that diversity matters because it leads to better work and higher retention rates.

Inclusion is About How The Day Feels

Workplace inclusion can be seen in meetings, decisions, and praise. People can have different opinions in an inclusive culture, and they will not be punished for disagreeing. It also gives you a safe space to try new things and learn from your mistakes. Use the full phrase “diversity, equity, and inclusion” in policies and reports to make sure that everyone across the entire organization and the higher-ups are on the same page. These ideas are not just slogans; they are ways to run a better business and keep an inclusive workplace for everyone, even when things change.

How to Make Governance Work

Accountability needs to be clear and specific. The leadership team should set three to five DEI goals that are connected to results that the company already keeps track of. They should also pay for a DEI committee that works across departments and ties the work to the company’s mission and business strategy. Publish DEI progress twice a year so that everyone in the company can see what is working. To get leadership buy in, make sure senior leaders support you clearly and, when appropriate, link it to pay. Have the heads of the C-suite executives lead a quarterly review, fix any problems, and explain how each goal fits into the bigger picture.

Start with the problem. Many groups still do not see how DEI efforts lead to clear results. Do not just write this down as a side note. Think of it as a hole that needs to be filled. Just like you do for sales, quality, and safety, you need to make sure that diversity, equity, and inclusion are part of your regular planning and review cycles. That means setting goals with owners, setting deadlines, making budgets, and sending in regular reports. It also means making sure that every step is safe and follows the rules.

Make sure that data collection follows privacy laws, that interviewers are trained to do consistent evaluations, that ERGs are open to all employees so that diverse employees can participate, and that selection criteria are based on business needs rather than informal “fit.” Also, add a quick legal review to major policy changes and give each risk area a named owner so that issues do not get lost. Leaders should also talk about diversity initiatives in internal communications so that everyone knows what is expected and the workplace stays strong.

What to Make Official

Make a note of the owners and the scope. For each goal, choose an executive sponsor and the person who will be in charge of making it happen. Talk about how each project affects costs, quality, risk, or income. Be clear about who is in charge of the big changes and the diversity programs that help you reach more customers. Stop using vague ranges and make your goals clear. Keep an eye on three to five important numbers that most people can understand in a few minutes.

You could, for instance, look at representation by level, pass-through rates during hiring, pay equity by cohort, retention and employee engagement by cohort, and so on. Set a regular schedule: monthly meetings to talk about problems, a quarterly business review that includes DEI along with other important issues, and a semi-annual all-hands update that lists what has been done and what needs to be done next. Make your guardrails stronger. Every three months, look over 10–15% of hiring decisions to make sure the process is working and the paperwork is in order. If you are not sure if a process is fair, add a quick way to move things up and keep track of the results so that everyone can learn from them.

Make changes based on the size and situation. The founder of a startup with 50 employees might only need two metrics and a monthly review. A company with 5,000 workers might need to look at things more closely by function and region. Diverse companies that do business all over the world should make sure that rules for language and data are the same everywhere, and that calendars match up with local holidays and religious or cultural observances. But they should still follow the same rules around the world for fair treatment and equal opportunities. The most important thing is to make sure the structure is strong enough to matter and easy enough to use. Also, connect DEI efforts to the areas where they can help you get ahead of the competition the fastest.

Guide to the Talent Lifecycle

Attract: Job Ads and Sourcing That Are Open to Everyone

The first step in hiring is to use clear language. Job descriptions should include the skills needed, the must-haves, and the actual pay range. Research shows that using gender-coded language can make qualified women less interested. On the other hand, using neutral, inclusive language can make people feel like they belong and build a more diverse talent pool.

Changing a few words can attract more job seekers, including younger employees who look at how a company presents itself when evaluating companies where to work. Be clear about how committed you are to DEI in the workplace and what candidates can expect. Also, put your state accommodations and contact information at the top of the page, and do a bias scan before you post. This is about making sure that everyone has equal access to see and get information, as well as fostering diversity and making the workplace more diverse.

Select: Fair Hiring and Representation

Structure is what makes hiring fair. Use evidence-based interviews with consistent prompts and calibrated scoring, and include work samples that are similar to the job. Structured interviews are better than casual ones because they help people avoid making quick decisions. Create panels with people from different backgrounds who have all been trained to do evaluations in the same way.

At each step, keep track of the candidates’ race, gender, national origin, gender identity, and sexual orientation to see where they leave and why. Do not use “culture fit” to mean “same.” Instead, look for skills and potential. This way of looking at gender diversity and ethnic diversity makes it easier for underrepresented employees to get involved without giving any one group an unfair edge. It also helps bring in a diverse pool of talent from a wide range of backgrounds.

Candidates are choosing companies based on how honest they are, how quickly they work, and how well they keep their promises. Candidates see that the criteria are clear, the scheduling is polite, the feedback is timely, and the reporting is clear.

Onboard and Grow: Making Inclusion Happen on a Large Scale

Set clear goals for new hires and check in with them often during their first 45 to 60 days to help them get off to a good start. Use simple routines that show employees feel valued, like giving them credit for their work and recognizing their culture contribution. Give employee resource groups (ERGs) money and an executive to support them. ERGs help workers from different backgrounds and those who are not well represented connect with each other, practice being a leader, and make decisions. Make sure that employees participate in ERGs and that they are linked to learning, mentoring, and career advancement. Show managers how to ask questions, explain the situation, and give clear feedback. Make sure that everyone gets a fair share of high-visibility work and stretch roles. Do not ask too many people to speak for whole groups of people. To see how well marginalized groups are doing, look at the contributions they make to culture in reviews and keep an eye on how engaged employees are.

Learn: Make Habits, Not Events

It is better to have regular short, useful lessons than just one. Add DEI training to your normal hiring, giving feedback, having meetings, helping customers, and choosing suppliers. Add long-term DEI programs like paying for rising diverse talent and checking for pay equity to your training. To keep improving DEI, write down the DEI practices that work and have short reviews after each hiring or promotion cycle. Over time, these habits work better than slogans, and leaders can see how consistent behavior leads to visible results in an inclusive workforce. Real change does not happen overnight, it takes time.

Return on Investment and Measurement

Make measurements simple and connected to value. Keep an eye on representation, hiring speed, pass-through rates, pay equity, promotions, and retention and employee engagement. Add items about inclusion to your pulse to find out if your employees feel safe and heard. Connect these signals to results such as safety, quality, speed, or income. Set goals and time frames so that movement is clear and on time.

Talk about evidence that is mixed. Big studies show that executive teams that are made up of people from different backgrounds are more likely to do better. On the other hand, studies that only look at race and ethnicity find a weaker link between race and ethnicity and profit. Do not think of these results as being in conflict with each other. Diversity is hidden potential.

When equity and inclusion open it up, it pays off. This is the activation model: gains happen when fair process and inclusive behavior move with representation. Check it out by seeing if diverse teams that improve inclusion scores and representation also improve output, quality, or time to delivery within two to four quarters.

Take a simple approach to ROI. Begin with a baseline quarter. Pick one or two units to be the pilot and leave the rest as controls. Keep an eye on the changes that happen before and after, as well as the gap between the two groups on outcomes that finance already values. The savings from lower turnover are equal to the number of exits times your replacement cost.

The value of faster hiring is the difference in days-to-fill times the daily value of the open role. The value of fewer safety or quality problems is the number of incidents that do not happen times the average cost. When inclusion scores and process quality go up before outcomes, and when controls do not move in the same direction, it becomes clearer what caused something to happen. Ethnically diverse companies say they have real advantages in innovation and reaching new markets, even though the links between profit and context are different.

It is important to be open. A lot of businesses share information about gender but not race or ethnicity. To build trust, make it clear where the system is fair or needs work, and make DEI a normal part of business reporting, publish a short report with both representation and process metrics.

Things You Should Not Do

One common mistake is to treat change like a campaign. Real progress does not happen overnight, you have to wait a while to see it. Another issue is putting too much weight on certain groups without fixing the process, which can leave out groups that are already having trouble getting help. Leaders change, and no one is in charge of the next step. Training only happens once, and the way decisions are made does not change. Data is collected but never talked about in business reviews.

Leaving everything up to HR is a bad idea because inclusion is something that sales, operations, and product managers think about every day. DEI goals that are too vague also get stuck. Make sure your goals are time-bound, public, and tied to accountability so that progress keeps happening even when the news cycle changes. Also, tell managers to hire people from different backgrounds when they need to fill hard positions.

90-Day Action Plan for C-Suite Executives

Weeks 1 to 2: Set the Bar

Set two DEI goals for the entire organization based on specific problems in your data, such as having too few diverse people in senior leadership or not hiring enough people early on. Please explain how each goal supports the company’s mission and current business strategy. Bring business leaders together to start or update the DEI committee. Make sure everyone knows what their job is, how much money they have to spend, and how to report back. Assign a senior sponsor and an operational owner to each goal.

Let the company know how you will keep them informed about DEI progress and how your daily work will change. Start a legal and risk review of policies that affect hiring, pay, and ERGs, and make sure that your data practices follow privacy laws in all the places where you do business.

Weeks 2 to 6: Start Two Moves with A Lot of Leverage

Rewrite five job descriptions for the department with the most early-stage drop-offs for underrepresented groups. Use inclusive language, focus on skills, and get rid of wish lists that keep qualified people from applying. Over the next two hiring cycles, make it your goal to raise the pass-through rate by a certain amount.

Open a new sourcing channel that gets a wide range of candidates, including people from your area. Also, give candidates a simple process map so they know what to expect. Set rules for pilot meetings and add open leader office hours to promote DEI and hear concerns quickly.

Regularly check in with your employees to make sure they feel safe and heard when they talk about problems. This is also the time to move from selection interviews to structured interviews and work samples. Make sure that decisions are clear and consistent by writing down scorecards and training interviewers.

Weeks 6 to 12: Expand the DEI Initiatives That Are Working

Give money to two DEI projects that are moving forward, and then send out a short scorecard with the results so far and the next steps. Write down how these DEI programs are connected to metrics and the right to make decisions. When working on high-stakes projects, make sure to include people from different backgrounds on your teams. This will help you build workplace diversity and embrace diversity across the company. Also, partner with businesses that have a lot of different skills or reach. Change the incentives as you learn so that managers keep pushing the work forward, and make sure that regular business reviews include progress. Make sure that everyone can join ERGs, link their plans to learning and mentoring, and give leaders who support them time to do so.

End Result

You should see a clear change in how people work, a wider funnel, and early signs that DEI in the workplace helps with strategy and performance. Leaders should be able to see how changes in talent affect the value of customers and how quickly things get done. As you go through the cycle over and over, small improvements add up and show up in better decisions, more engaged employees, and higher employee retention. You can test the activation model on your data over two to four quarters, when the quality of the process and inclusion go up before improvements.

Why Businesses Should Care About Diversity, Equity, and Inclusion

Long-term DEI efforts make the work environment safer, help people come up with better ideas, and give businesses a competitive advantage. Set clear goals, use honest data, and stick to your routines when you launch a new product. Make sure everyone is treated the same, has equal opportunities, and is included in everyday life.

Remember that ethnically diverse companies are more likely to do well, that inclusive practices can turn variety into new revenue, that diverse companies can often reach new customers faster, and that gaps in race and ethnicity information can make risk harder to see. In the next 60 days, your short-term goal is to publish a one-page DEI dashboard, review 10–15% of recent hiring decisions, and rewrite three job descriptions to use skills-based, inclusive language.

You will build a strong, inclusive workforce that can solve hard problems with new ideas and a common goal as you try out and expand on what works. Keep pushing for DEI programs at work because they are important.