DEI: A How-To Guide for Small Business Owners
What’s the easiest way to ensure your company is profitable? In our opinion (and most other business experts!)…it’s about building the right team and leading them to success.
Building a great team is different for every company, but one universal truth is this: A great team is diverse and inclusive, and treats each team member equitably. Not only is it the right thing to do, but making an intentional policy for DEI in your workforce has proven to create a productive environment for your employees AND it contribute to your bottom line.
What is it?
DEI, which is an acronym for Diversity, Equality (or Equity), and Inclusion is an intentionally created list of principles a company creates to ensure that the culture it promotes is one of fairness and inclusivity. While it may seem like a trending buzzword or something that sounds good, incorporating DEI procedures in your business can have massive positive effects that reduce HR complaints, keep employees longer, and create more avenues for profitability.
But before we get into those aspects, let’s start at the beginning and break down the different facets of DEI.
Diversity – While diversity is normally thought of as predominantly focused on skin color and ethnicity, practicing a culture of diversity goes beyond that. Successful diversity protocols also incorporate a myriad of demographics that include not only physical but psychological, socioeconomic, and social variables, too.
Equality/Equity – Equity and Equality are used interchangeably in this acronym, but the point of the “E” part of DEI involves making sure that there are no hidden barriers or subconscious biases that would prevent someone from having full access to the opportunities and benefits available for all employees. This includes not only healthcare benefits, but promotion opportunities, equal pay scales, and unbiased hiring practices.
Inclusion – Inclusion simply means that your staff feels welcome and involved in the company regardless of how they identify themselves.
Benefits of a Diverse and Inclusive Company Culture
Reduced Turnover – Employees who work for companies that make diversity a priority for their workforce report higher job satisfaction scores and increased trust in their employer, reducing employee turnover and hiring costs.
Better Revenue – Having a company that includes higher diversity rates has a ripple effect globally, resulting in increased revenue.
- Customer-facing employees have a 158% greater chance at relating to your customer base and closing sales when your customer feels represented and understood.
- Companies with an increase in diversity for their management teams saw an average of 38% more revenue than companies that did not invest in DEI practices.
- When it comes to the C-Suite level, companies with a mix of genders in their leadership team saw were 21% more likely to turn a profit.
How to Successfully Incorporate DEI Policies Into Your Business
The most successful businesses focus on not one, but all three factors of DEI, though it can feel overwhelming for a small company to get started with so here are some tips:
- Create opportunities for the conversation to begin – If you’ve already hired staff to help run your business, then it’s important that you instill feelings of openness and have open lines of communication with them, especially when it comes to finding weaknesses in your diversity practices. Ask employees for feedback (anonymously if they prefer) as to what their feelings are regarding your current-standing DEI practices and what you might be missing. Getting feedback from the “boots on the ground” staff can help shed light on potential blind spots management might be missing.
- Evaluate your customer base and make sure your customers feel represented – DEI can impact your bottom line, so it’s important that not only do your internal policies create inclusive environments but that your customer base is also aware of the steps your business takes to bring different types of people to the conversation. Showing that your business takes specific steps to represent as many voices as possible will not only give your brand a PR boost but will also ensure that the diversity of your customer demographics feel heard and represented in the corporate culture.
- Incorporate better guidelines for mentoring and coaching – Employees may sometimes feel demotivated or uncomfortable approaching management for mentoring or coaching if they feel there may be unequal opportunities due to being different from their managers. It’s important that companies remove these subtle biases by enacting specific practices for coaching, guidance, and feedback that make these opportunities more objectively focused on performance and less prone to subjectivity.
- Review your systems for hiring and promotion – Subconscious biases may impact the ability to hire qualified talent, so it’s important that hiring practices, from sourcing to interviews, are all reviewed and that potential opportunities for bias to affect hiring outcomes are completely removed. Many companies are utilizing AI to help combat this as different applications can create hiring procedures that evaluate the candidate based on metrics rather than subjective interview questions.
- Make DEI policies living documents – DEI is ever-evolving so it’s important that as your business grows so too do your procedures for keeping your company diverse and inclusive. Make sure that your diversity policies are regularly reviewed and updated as needed so that your business does not fall susceptible to outdated methods that can affect your revenue.
Want to create a DEI strategy for your business? Try this exercise. Do It Now!