Employee engagement through DEI: How does it benefit businesses?

A sound DEI framework enhances employee engagement, leading to increased innovation, productivity, and overall organizational success.

Because without employee engagement, DEI initiatives will not be impactful, and vice versa. If your employees don’t feel seen, heard, and understood, attracting and retaining diverse talent will not work until employee engagement levels are improved with the help of DEI principles, among others. 

Many companies are facing challenges like, high turnover, and employee disengagement. This is not because of a lack of initiatives, but often because those initiatives lack authenticity and impact. Rigid DEI programs that are more performative than purposeful can backfire. They bring the risk of leaving employees feeling tokenized rather than truly included. When employees don’t see meaningful change or don’t feel a sense of belonging, even the most well-funded DEI strategies fail.

This is why it’s essential to start with a clear understanding of what DEI means and how it can be thoughtfully integrated into employee engagement strategies.

Defining DEI(B)

Diversity, Equity, and Inclusion (DEI) refers to a set of interconnected practices and principles that foster a workplace environment where all individuals, regardless of race, ethnicity, religion, gender, and sexual orientation, among others, are respected, valued, and given equal opportunities to thrive. DEI elements are often grouped because they are highly interconnected, and together, they generate more impact than if they are taken separately.

Diversity in the workplace refers to the representation of different population segments in a certain organization. Gender diversity, age diversity, ethnic diversity or physical ability and neurodiversity are some of the most common examples. But it goes beyond these. It can also be about diversity of ways of thinking, as mentioned in a McKinsey article. 

Equity is the fair treatment of all people to ensure that someone’s identity is not going to predict or influence opportunities and outcomes in the workplace. This is different from equality, which assumes that everyone should be treated the same. Equity considers someone’s unique circumstances and adjusts treatment accordingly to achieve an equal end result. 

According to McKinsey, inclusion relates to “how the workforce experiences the workplace and the degree to which organizations embrace all employees and enable them to make meaningful contributions”. Hiring a diverse workforce is not enough, striving to create an inclusive culture is critical to make sure the diverse workforce you’ve built also feels like their voices are heard. 

A newer addition to the mix, belonging refers to an employee’s sense of being accepted, valued, and included within the organization. It’s cultivated through inclusive practices, open communication, and recognition of diverse perspectives and contributions.

Why should businesses invest in DEI?

Companies that prioritize DEI as a tool for employee engagement outperform in innovation, profitability, and resilience. In a study by Deloitte, it is shown that diverse teams are more innovative, able to solve problems faster, and better positioned to serve a diverse customer base, meaning reaching larger and new markets. A 2023 report by McKinsey mentions that companies in the top quartile for gender diversity on executive teams are 25% more likely to have above-average profitability. 

If gender-diverse teams are also highly engaged, financial performance improves drastically. According to Gallup, diverse and engaged teams have an average of 52% higher net profit than single-gender and less-engaged units. 

But it goes beyond gender diversity. Already in 2020, McKinsey found that companies in the top 25 for cultural and ethnic diversity were 36% more profitable than companies falling in the bottom quarter.

Fostering an inclusive environment is also profitable. According to a BCG report, if employees experience or witness bias, discrimination, or disrespect, then they are 1.4 more likely to quit. Moreover, their research showed that 85% of employees of companies with diversity in senior leadership experience a sense of belonging, as opposed to only 53% of employees in companies without diversity in senior leadership. 

It’s clear that fostering an engaging workplace where all employees have a sense of belonging is no longer just a nice-to-have; it’s becoming a business imperative. How can you leverage DEI to foster employee engagement and drive business performance?

DEI and its impact on employee engagement

Employee engagement is the emotional commitment employees have towards their organization, influencing the willingness to contribute to its goals. According to Forbes, employee engagement is not employee happiness, nor employee satisfaction. Making employees happy with extra benefits such as free lunch, Friday night drinks, or a few extra holiday days will not necessarily mean that they will also work productively on behalf of your organization. 

Most organizations talk about employee satisfaction, but a satisfied employee will not necessarily go the extra mile on their own and might leave the company as soon as a better offer shows up. 

Employee engagement is directly impacted by DEI, which is why a strong DEI framework that fosters a sense of belonging can be beneficial for your organization. 

According to a study by Catalyst, positive experiences of inclusion explained 35% of work engagement and 20% of intent to stay at the organization. On the other hand, a lack of DEI support can result in higher turnover rates among underrepresented groups - for instance, one in three Black employees intended to leave their job within two years, compared to only one in four white employees. 

So, how can you foster inclusion and a sense of belonging among your employees using DEI and employee engagement strategies?

Effective employee engagement strategies using DEI

Research and renowned companies are raving about the business benefits of DEI and employee engagement. But how can you use DEI and employee engagement strategies and initiatives to access these benefits? Here are a few practical tips:

1. Listen to your people: Both before and after implementing any changes, launch surveys, organize interviews, and do desk research to find solutions that speak to the needs and challenges of current employees

2. Leadership commitment: Leaders must advocate for DEI efforts and set the tone for an inclusive culture. Their commitment is crucial in driving transformation and getting employees’ buy-in. 

3. Employee Resource Groups (ERGs): Establishing ERGs provides support networks for marginalized groups, promoting inclusivity and engagement. These groups are created and managed by employees, and can provide a community with information and resources through various activities. 

4. Workshops and training across employee units: Organizing workshop series on important topics such as inclusive leadership, psychological safety, among others, can raise awareness among your employees about current organizational challenges while also encouraging them to actively co-create a solution.

5. Inclusive policies: Implementing policies that accommodate diverse needs, such as flexible working arrangements or accessibility ensures all employees feel valued regardless of their unique identity and needs. 

Embracing diversity, equity, and inclusion is essential for fostering employee engagement and driving organizational success. By implementing inclusive employee engagement strategies, organizations can create a culture where all employees feel valued and, in turn, create value. 

The journey toward a truly inclusive workplace requires commitment, continuous effort, and a willingness to adapt, but the rewards are well worth the investment.