Actions over acronyms: The business case for DEIB

The phrase diversity, equity, inclusion, and belonging (DEIB) has become ubiquitous in corporate boardrooms, academic circles, and even casual conversations. But while the acronym and variations are well known, the concepts are often misunderstood, misapplied, ignored, and—most recently—weaponized.

As echoed by Michael C. Bush, CEO of Great Place to Work, every element of DEIB is important, and a society or workplace that values diversity, ensures equity, fosters inclusion, and cultivates a sense of belonging is undoubtedly a better place to live and work. The principles create an environment where everyone has a chance to contribute, thrive, and feel valued—and that makes workplaces more profitable, even tripling stock market performance.

Supporting workers across all ethnicities and backgrounds also will recession-proof your business. Over a 12-year down economy when the overall stock market dropped 36%, stock performance increased 14% at companies where marginalized workers had positive experiences.

People-first cultures are more innovative, resilient, and have stronger cash flows because they have created workplaces for all. They’ve intentionally hired and developed people from all backgrounds, and established employee resource groups (ERGs) to make sure they’re listening to those voices.

It is the actions in the acronym—not the individual words or letters—that create these business outcomes.

Saying is easy, doing is hard, being is the goal

The true measure of DEIB success is rooted in company actions to support accelerated business growth. These concepts, when intertwined with the principles defined by Great Place To Work, fosters a culture of innovation, productivity, and employee satisfaction.

It’s important to have a common understanding of each element of DEIB to have intellectually honest conversations around these topics. Here is my definition of each term, and positive business outcomes when put in practice.

Diversity: Referring to the differences among people, including but not limited to race (e.g., white, Black, Asian, Indigenous), ethnicity (e.g., Mexican, Irish, Italian, Scottish, Puerto Rican, Filipino), gender (e.g., man, woman, nonbinary), sexual orientation (e.g., lesbian, gay, straight, bisexual, asexual), age (e.g., young, old), ability (e.g., physically disabled/non-disabled, neurodiverse), socioeconomic status (e.g., low-income, high-income), and perspectives (e.g., political, religious).

Despite diversity initiatives’ perceived slowdown of late, a McKinsey study done every three years shows progressively stronger proof (including the most recent 2023 study) that top quartile companies in ethnical representation had a 39% greater likelihood of financially outperforming their bottom quartile peers. Moreover, the study also found that companies with more than 30% women employees are significantly more likely to outperform those with fewer.

The highest innovations occur when every employee can participate. Companies building an “innovation by all” culture are more agile—resulting in 5.5 times the revenue growth than peers with a less inclusive approach.

For instance, members of Dow’s LBGTQ+ ERG partnered with Under Armour to create the Under Armour Pride Collection shoes built by a diverse group of scientists and engineers who informed the product’s innovative technology, having a direct impact on the business.

Equity: Ensuring everyone has fair access to opportunities and resources, regardless of their background, identity, and physical and/or mental ability. For example, providing additional support to students from socioeconomic, physical, and/or mentally disadvantaged backgrounds to level the playing field.

Equity aligns with the concept of trust and fairness, ensuring that all employees have fair opportunities to succeed. When employees feel fairly treated and have equal opportunities for advancement, they are more engaged and productive.

Equitable workplaces experience half the turnover as their peers and have employees who are six times more likely to help recruit talent, according to Great Place to Work research.

Inclusion groups for women at Cadence, for example, influence business decisions around policies and programs, which has helped the tech company attract and retain female talent.

Inclusion: Creating cultures where everyone feels valued, respected, and supported. This includes celebrating diversity of thought and communities and ensuring everyone’s voice is heard. Inclusion directly correlates to the idea of camaraderie and respect, essential elements of a positive, high trust culture where employees can bring their authentic selves to work.

When employees don’t feel comfortable sharing their personal details, like their disability status, sexual orientation, or other parts of their identity, that’s an indicator of lower overall trust.

Not feeling included also improves retention according to a Great Place to Work study. Employees are 1.8 times more likely to stay with their company if they feel like full team members, and are 1.5 times more likely to stay if they believe management cares about them.

Belonging: The sense of connection and acceptance within a community or group. It is fostered by creating a supportive environment where everyone feels welcomed and valued for their unique contributions.

A 2021 BetterUp study found that employees with a high sense of belonging take 75% fewer sick days than employees who feel excluded, translating to almost $2.5 million in lost productivity annually per 10,000 workers. The same study discovered that employers see a 56% increase in job performance when they feel like they belong, resulting in a $52 million gain annually per 10,000 employees.

When employees feel a connection to their company, they are more committed to its success. This leads to improved collaboration and higher levels of employee advocacy, pride, and camaraderie.

ERGs are extremely effective in fostering belonging, and are powerful sources of innovation, talent development, and revenue growth.

According to new research, compared with nonmembers, ERG members are:

• 40% more likely to feel good about their company’s impact on the community
• 30% more likely to have confidence in their executive team
• 23% more likely to report a psychological and emotionally safe workplace
• 23% more likely to say their company is a great workplace

Actions speak louder than words

By integrating DEIB principles into the Great Place to Work Trust Model, organizations can cultivate a culture where employees thrive. This involves more than just implementing policies and procedures; it requires a genuine commitment to creating an environment where everyone feels valued, respected, and empowered to reach their full potential.

Our actions must support data-driven decision making, not just feel-good initiatives. We must hold leaders accountable for progress, not just for using the right buzzwords. We must invest in ERGs and support systems that actually make a meaningful difference to the business.

Let’s stop obsessing over the letters and start focusing on outcomes. DEIB is not a destination, it is a journey. It requires constant evaluation, adaptation, and a commitment to continuous improvement. And most importantly, it requires action.

Brian K. Reaves is executive vice president and chief belonging, equity, and impact officer at UKG.