Why DEI still matters in the workplace - Glassdoor for Employers

Why DEI still matters in the workplace

Diversity, equity, and inclusion (DEI) roles increased by 55% following George Floyd's murder in 2020, with both the public and private sectors hiring DEI professionals in waves. The tide, however, is receding amid massive layoffs in the historically progressive tech sector and legislative pushback in a handful of states. DEI-focused roles had a nearly 40% churn rate at companies engaged in layoffs in 2022, compared to approximately 24% for non-DEI roles.

As the economy teeters on the brink of recession, DEI efforts are no longer getting the attention and funding they did a few years ago, but they remain important to creating a healthy workplace culture.

"In 2020, a lot of companies made big commitments, big statements around the DEI roles and goals," said Reyhan Ayas, a senior economist at Revelio Labs. "As we are observing a turning of that tide, I think it's very timely that we actually look into companies to see if they have kept up with those big statements they made."

While some critics argue that DEI is hurting businesses, proponents say it's simply responsible policy-making.

"DEI is about finding out and fixing those root causes of inequality and potential discrimination," Lily Zheng, a DEI strategist and consultant wrote. "Sometimes, it's intentional and overt racism, for example. Other times, it's biased policies, the lack of process, or accidental exclusion. Whatever it is, we fix it, with the goal of building a workplace free from discrimination, that works for everybody," said Zheng.

Is the DEI era over? Let's consider why prioritizing inclusion still matters in the workplace - both from social and financial perspectives - and how companies should approach DEI policies moving forward.

Benefits of implementing DEI in the workplace

Studies have repeatedly shown that diverse teams outperform homogeneous teams.

  • A 2021 report in Psychology Today noted that diverse teams are better at launching new products, troubleshooting existing products, planning for the future, and responding to crises; researchers attributed this to diverse teams exposing and correcting faulty thinking, generating novel ideas, and accounting for a wider array of variables in planning
  • A 2020 McKinsey study encompassing 15 countries and more than 1,000 companies found the relationship between diversity on executive teams and the likelihood of financial outperformance has strengthened over time, with the most diverse teams outperforming the least diverse teams by 36% in profitability
  • A 2018 Gartner study found that "inclusive teams unlock diversity benefits by improving team performance by up to 30% in high diversity environments."

In addition to generating revenue, DEI policies are critical in retaining Millennial and Gen Z workers. When searching for a job and company to work for, 36% of employees ages 18-44 say DEI policies are an important factor. (Those two demographics currently account for 38% of the workforce - a number expected to grow to 58% by 2030. )

Plus, an overwhelming majority of employee reviewers of all ages on Glassdoor - between 61-72% percent over the past six years - view their company's DEI program as a positive benefit, as opposed to 15-21% who listed it as a con.

The takeaway: DEI is good for business.

Lingering DEI issues in the workplace

It's important to remember that DEI is time-intensive work. It takes years, not days. Despite many companies putting more effort into their DEI policies over the last three years, the inaugural Glassdoor Equity Xray™ reveals that there's still a long road ahead to gender and racial equity. 

Glassdoor evaluated employee experience at 371 companies and found: 

  • 18% of employers had significantly different workplace experiences between men and women.
  • Men rated the company higher on average than women at two-thirds of companies.
  • There were significantly different workplace experiences across race/ethnicity groups at 39%  of companies.

When DEI is a seasonal theme instead of a holistic approach to business, workers question leaders' commitment: 29% of workers surveyed in a 2023 Indeed survey said they believe their company's DEI and belonging (DEIB) efforts are only reactive to current events, and 24% described them as "performative in nature." Furthermore, 35% believed DEIB initiatives are prioritized and socialized only during holidays such as Martin Luther King Jr. Day and Juneteenth.

The practical impact for employers is a higher risk of turnover: For example, the Indeed survey reported that 49% of Black workers in the U.S. are currently considering or actively looking for a new job.

DEI is still important

Real diversity and inclusion is about empowering employees and job applicants by acknowledging and celebrating what makes them different. More than 3 in 4 employees and job seekers say a diverse workforce is an important factor when evaluating companies and job offers. Approximately 80% of Black, Hispanic, and LGBTQ workers consider a company's diversity when evaluating job offers, and nearly half of Black and Hispanic workers have quit a job after witnessing or experiencing discrimination at work.

Don't throw out your DEI strategy. Here are some tips to help you retain talent and deliver better results