Understanding HR's Role in Diversity, Equity, and Inclusion

Traditional HR Sucks at ​Diversity, Equity, and Inclusion.

HR's role in many organizations is to protect the business from lawsuits and controversy.  This approach leads to many inequities in the workplace, and will ultimately hurt a company culture.  Operating from a mindset of fear will never work, and it's also absolutely no fun!  If all you worry about is getting a lawsuit or EEOC claim, you can't focus on making your organization a great place to work.  

Diversity, Equity, and Inclusion is hard.  It's a journey that will never end.  However, New School HR Practitioners can make small, pragmatic changes in their organization to move them forward.  

Let's start by understanding the basics:  
 
Definition of Diversity
Let's start by defining diversity. Diversity is defined as a state of being, diverse or a variety of things a range of different things in the context of our organizations.  Diversity can be defined in many different ways. There's diversity of race, diversity of gender, diversity of thought, diversity of national origin, and the list goes on and on. I think about diversity as a state of being.  Diversity is not an action you can take.  Think of diversity as a noun.  When an organization talks about their “Diversity Strategy”, many times, this takes the shape of counting diverse qualities within their company, and setting quotas on where they would like to be.  

Definition of Inclusion: 
Inclusion is the action or state of including or being included within a group or structure. This is important because all of our organizations have an opportunity to impact diversity, but the things that we do to impact diversity, by definition, are inclusive actions.  Inclusion is a verb.  It is something you can DO to impact diversity and equity within an organization.  In an organization, focusing on an inclusion strategy will shift a focus away from counting your total number of diverse employees towards actions that can make people feel a part of the group.  
Here’s an example:  If you have a Black member of your board of directors, by definition, you have diversity on your board.  This is admirable, as board diversity is typically very lacking.  However, if that individual does not feel that they are a part of the group, or their opinions, beliefs, and perspectives are not valued, diversity will not support your organizational goals.  In order for that person to be effective in their role, an inclusive environment is critical.      

Definition of Equity: 
Equity is a little bit different but equally important as diversity and inclusion. Equity is defined as the quality of being fair and impartial and in the context of diversity within our organizations, equity is extremely critical to ensure that your employees and team members are being given the same opportunities as others.  Think of this as all employees starting from the same place as everybody else.  As we look at each individual's situation, we all come from different places and have different levels of fairness in life.  This matters to an organization because if you have an organization that is non-equitable, you will struggle.  Your culture will not feel inclusive, and diversity will typically be poor. 

Here is a video to describe how equity works:  https://www.youtube.com/watch?v=PJAgPF5FNTQ

Why do these terms matter to an organization?  
As you think about your teams, you should also be thinking about your customers.  A good rule to think about is that your diversity should mirror the diversity in your community.  In the same context, you should also aspire to mirror your customers.  If you have a team that can mirror the wants, needs, and experiences of your customers, they will inherently provide better products and services.  This isn’t just about responding to recent political and social unrest.  This is a business imperative.  In the next section, we will highlight multiple business cases that demonstrate the imperative.    

What is the business case?   
Some people hate that you need a "Business Case" to articulate the importance of DE&I initiatives.  The truth is that this is the language of business, and HR needs to be able to speak in this language to articulate why we need to take steps in this area.  If we can define value, cost, and action steps, we will secure funding and budgets to take action.  This is critical for success!  

We will start by looking at the statistical business case for diversity, inclusion, and equity:  
If we take a look at businesses around the world, there's clear statistical research that shows that inclusion, equity and diversity drive results within organizations. 

Here are some research results: 

• McKinsey’'s research shows that gender diverse companies are: 
  • 15% more likely to outperform their peers.
  • Ethnically diverse companies are 35% more likely to do the same.  https://www.mckinsey.com/business-functions/organization/our-insights/delivering-through-diversity 
• Catalyst research shows that companies with more women on their board statistically outperform their peers over a long period of time  https://www.catalyst.org/research/women-on-corporate-boards/
• Deloitte Australia research study showed that inclusive teams outperform their peers by 80% in team based assessments.  
• Deloitte conducted a study of 450 companies over a two year period:
  • They showed a 2.3 times cash flow per employee three year period.  
  • Smaller companies had 13 times higher mean cash flow from operations. 
  • Diverse organizations were 1.8 times more likely to be change ready.
  • 1.7 times more likely to be innovation leaders in their market. 
  • Organizations were 3.8, times more likely to be able to coach people for improved performance.
  • 3.6 times more able to deal with personnel performance problems.
  • 2.9 times more likely to identify and build leaders.

Let’s take a look at generational diversity. 

• In the group born between 1980 and 1996 commonly known as millennials, 43% of them identify as non white. 
• Millennials consider cognitive diversity, or diversity of thought as just as important as traditional diversity. 
• 75% of millennials would take a pay cut to work for a socially responsible company.
• 76%, consider a company's social and environmental commitments before accepting a job.
• 64% would not take a job if an employer does not have a strong corporate responsibility practice.  
• The next generation, Gen Z, was born between 1997 to 2010. This is the future workforce and your future customer. 
• 49% of Gen Z identify as non white. 
• 72% of Gen Z believe that racial equality is the most important issue today. 
• 36% say equality is the most important cause that they want their employer to support. 

In addition to the statistical business case, there is also a human business case to be made. Not only is this good for business, but it's also just the right thing to do.

In the organizations where diversity has been a focus, you will see higher engagement levels. You can look at teamwork levels you can see how people are collaborating. You can see how communication flows within an organization. If an organization has high levels of inclusion, equity, and diversity, it fosters organizational trust.  This creates a culture who works well together, and who ultimately drives better business results. It's also just a better place to work.

If you can ensure you support and foster the necessary processes to change organizational structures to support diversity, inclusion, and equity, you will find success.  However, this is not easy.  Organizations are hard to change.  Culture change takes years, and we have been operating with processes and structures that have been in place for decades.  In order to foster the necessary change, it starts with leadership, and incremental progress.  

Start by taking a first step:  Assess your organization and start to define a business case.