DEI: 5 Key Issues Facing Employers

Author: David B. Weisenfeld, XpertHR Legal Editor

With the advent of the Great Resignation, organizations that do not build on their diversity, equity and inclusion (DEI) initiatives risk losing talented employees from underrepresented groups to competitors. For this reason and many others, DEI issues remain paramount for employers in 2022, as having a plan in place is increasingly viewed as a must-have strategy.

Read up on the most critical areas organizations need to watch, featuring insights from a panel of experts on taking meaningful steps forward when it comes to embedding DEI as part of the workplace culture.

1. Momentum and Consistency

"Creating Employee Resource Groups (ERGs) and celebrating diversity days is great, but what happens after that?" asked corporate culture consultant Joy Stephens. "If you're going to work on diversity and we don't see anything, that's part of the Great Resignation. People will look around if they are not seeing progress." That progress goes beyond creating affinity groups and includes all aspects of DEI.

At the hiring stage, it means making the business case to look for talent in different places. "'We hire the best' sometimes means pedigree," said Cynthia Owyoung, author of All Are Welcome: How to Build a Real Workplace Culture of Inclusion That Delivers Results and VP of Inclusion, Equity and Belonging at Robinhood. "Having a definition of what best looks like may exclude a whole group of people."

Some ways to build momentum and ensure an organization attracts a broader array of candidates include:

  • Removing educational requirements that do not bear a direct relationship to the essential duties of a position;
  • Using diverse interview teams;
  • Reaching out directly to historically Black colleges and universities (HBCUs);
  • Establishing connections with diverse professional groups; and
  • Being open to geographical diversity.

As HR professionals develop the business case for advancing DEI in their organization, they should illustrate how a diverse and inclusive culture can serve as a competitive advantage that connects to long-term success. For instance, a McKinsey & Company report notes, "The most diverse companies are now more likely than ever to outperform non-diverse companies on profitability."

But as Stephens points out, diversity goes only so far without inclusion - in other words, it's not enough to cultivate a diverse workforce if all employees don't feel fully welcome and included. That is why a big part of establishing momentum and consistency centers around retention efforts. Some key inclusion questions to ask include:

  • Do employees feel respected, valued and understood?
  • Are there subtle ways in which people are being excluded?
  • Does the organization celebrate differences?
  • Is there an effective mentoring program in place?

If employees feel valued and connected and have a sense of belonging, they are far less likely to leave. Reducing turnover remains cost effective for any employer.

2. Transparency

There is a growing trend towards publicizing information on workforce representation and pay equity. To be viewed as an employer of choice, companies are increasingly publicizing what their workforce looks like and showing inclusiveness on their websites, according to Matthew Camardella, co-chair of the Affirmative Action and Office of Federal Contract Compliance Programs (OFCCP) practice group at Jackson Lewis.

"You also can incentivize good behavior [through transparency]," said Camardella. As an example, he cites the fact that private employers in the United Kingdom with 250 or more employers must publish data on their gender pay gap. While there are no penalties, Camardella explains that no employer wants to be called out, so this law drives positive results.

While the US does not have a similar law on the federal level, watch for requirements at the state level. For example, private employers in California with 100 or more employees are required to submit pay data reports to the Department of Fair Employment and Housing by March 31 of each year. The reports must include the number of employees in specified job categories and their pay bands by:

  • Sex;
  • Race; and
  • Ethnicity.

The reports also must include the total number of hours worked by each employee in each pay band during the reporting year. If a covered employer fails to submit a pay data report, the agency may seek an order requiring the employer to comply.

Even in the absence of such requirements, this is an area where many employers are making a concerted effort. "Employees want to see numbers," said Camardella. Being transparent helps to provide better access to more talent in the recruiting and hiring process.

A big challenge, though, is going beyond race and gender. "The conversation around disability and ability often gets overlooked," said Owyoung. "People are less likely to self-identify because it has some of the most stigma."

Camardella voiced a similar sentiment in noting that employers lack good source data for certain protected classes including:

  • Disability;
  • LGBTQ; and
  • Religion.

With greater inclusion comes more employees willing to self-identify. But with disability in particular, Camardella said the perception among many employees remains that bringing it up can only hurt. Similarly, many employees fear the stigma of bringing up mental health issues, so that remains another area where source data is lacking.

3. Senior Leadership

The recent lawsuit by Brian Flores claiming the National Football League and several of its teams systematically discriminated against him and other Black personnel in its hiring and retention practices has placed renewed focus on DEI. Nearly 70% of NFL players are Black, but only two of its 32 head coaches are Black (plus one who is multi-racial). This disparity has placed a spotlight on the need for senior leadership to buy in when it comes to achieving diversity at an organization's higher levels.

While the disparity is less dramatic for many employers, there is no question that many organizations that can point to having a diverse workforce find much less diversity in the managerial ranks. "You need to be intentional about it," said Camardella. "It can't just be platitudes, or you don't move the needle."

From Stephens' perspective, the most important step senior leaders can take is providing the needed budget resources to DEI initiatives. "If you were going to start a new product, you would provide the resources to do it," she said. "Giving those resources [for DEI] is critical."

Chief diversity officers and senior vice presidents for DEI can play a valuable role. But there needs to be buy-in from the top of an organization to achieve meaningful change. To achieve that, HR should show leaders how DEI matters for the business from a competitive standpoint.

Senior leaders should be visible participants in promotion, recruitment and retention efforts earlier in the process, which will help the organization's bottom line. They also should attend various ERG meetings on occasion to show support to employees from diverse groups.

"Connect with senior leaders on an emotional level," Owyoung advises. Ask them, "Why does this matter to you?" Every leader has felt excluded at some point in their lives, and remembering those moments can help them connect to the experiences of people from underrepresented backgrounds, she explains.

Camardella adds that it is important for senior leaders to give time to achieve objectives. Setting measurable goals, without incentivizing based on protected characteristics, is part of the process. But DEI efforts must be constant. As Camardella says, "This simply cannot be done in one year."

4. Inclusion Challenges Amidst Remote Workforce

Inclusion issues can be particularly acute in a remote work environment, as organizations look for ways to maintain culture and community when employees are not working in the same location.

"Remote work during a pandemic is a huge inclusion challenge," said Owyoung. This can even be true for employers with hybrid work arrangements. She stressed that employers should still conduct Zoom meetings even if some employees are in person and some are remote, so everyone is operating on the same plane.

Owyoung advises building in time for "shooting the breeze" and socializing so that meetings are not 100% transactional. "On Zoom, people focus on tasks and miss those water-cooler moments," she explained. "It leaves open the opportunity for more inequity because there is inevitably proximity bias."

A Gartner survey from 2021 backed up that contention in revealing:

  • 64% of managers and executives believe in-office employees are higher performers than remote employees; and
  • 76% believe in-office workers are more likely to be promoted.

Gartner also has reported hearing from CHROs in surveys of their own employees that women generally are more likely to prefer working at home than men, so HR leaders must address these issues to prevent an increase in the gender wage gap.

For instance, promoting equal access to opportunities for remote workers is critical. Employers must ensure that promotional opportunities are based on objective standards and that an employee's location is not a factor, so that women and other workers are not disproportionately affected.

A report from the National Women's Law Center showed that nearly 1.1 million fewer women are participating in the workforce in 2022 than two years earlier, highlighting the uneven labor force participation across the genders since the onset of the COVID-19 pandemic.

As Gartner notes in What Women Want From a Hybrid Work Experience, this is creating an urgent need to understand women's perceptions of their employee experience and ways to enhance retention. Communicating effectively about work-life balance and creating a sense of belonging can be positive steps to stem the tide of the Great Resignation.

5. Broadening the Discussion

A key factor in the success of any DEI initiative is having the ability to see every person's point of view. "You can't only focus on Black women for instance," said Stephens. "To be truly inclusive, everyone has a right to be heard." This includes LGBTQ employees, the differently abled and white men too, according to Stephens.

She also cites the need for supervisors to manage different types of employees in different ways. They must create psychological safety for all to feel a sense of belonging as some employees from underrepresented groups may not be comfortable speaking up at meetings.

A lack of psychological safety can affect all employees. But Cynthia Owyoung asserted that bad employment practices may seem amplified for employees from these groups who are more likely to perceive unconscious bias.

"Being told you're not speaking up enough during meetings can be code for women being perceived as not being leadership material," Owyoung explained.

Along similar lines, Stephens said personality diversity often gets overlooked and that can leave introverts left behind. "It doesn't always have to be the loudest person who gets promoted, and this can become a DEI issue if employees from underrepresented groups feel less comfortable speaking up."

The panelists concluded that DEI remains an uncomfortable topic at times and noted that leaders must act as role models and reward risk-taking by creating a safe space so that employees also are willing to take risks.