Tips for Constructing an Effective DEI Program in Your Organization

Diversity, Equity & Inclusion (DEI) has been on corporate boardroom agendas for some time, but it has attracted more urgency in the last two years, fueled by a growing sense of unrest and a wider call for social justice during the COVID-19 pandemic. Fortune reported that American companies are now spending $8 billion annually on DEI initiatives.

A driving factor behind the focus on DEI is the growing evidence that these initiatives are tied to an improved bottom line. According to research aggregated by the careers website What To Become, companies with successful diversity and inclusion commitments report financial returns up to 35% higher than national industry medians, 70% of diverse companies are better positioned to capture new markets, and 78% of workers believe that diversity and inclusion offers a competitive advantage.

But these corporate investments are about more than social impact and business performance, they’re also about Human Resources. Nearly one in three employees think their employer lacks a sufficient commitment to DEI and there is a direct connection between those DEI concerns and an employee’s intention to quit their job, according to a 2022 survey by Buck. The survey found that employees are more likely to leave an organization if they think diversity in cultures and backgrounds are not respected, their company is not committed to DEI, or their company does not provide diverse offerings for a diverse workforce.

“Today, workers are looking for diversity, equity and inclusion to be a cultural imperative in the workplace,” said Johnny C. Taylor, CEO of the Society for Human Resource Management. “They want to feel the tangible advantages of an inclusive work culture.”

Indeed, HR Dive reported in June 2022 that employees are keeping the pressure on employers to deliver on DEI commitments, leading some to set public goals and even release occasional status reports, so company executives “may want to ensure DEI efforts are well-received and find ways to ensure accountability.”

“I think there are two main questions to ask before you get started on a DEI program,” said Rrissi S. Gray, Senior Director of Healthcare Compliance at GI Alliance in Dallas, during a recent State Net Hot Topic Series Webinar that focused on compliance considerations for building DE&I programs. “First, what does DEI mean to your organization? There are some possible answers that are tangible and other answers that are more philosophical. The second question is, what are your objectives for the program? You may be looking to better recruit employees or you may have ambitions on being part of a social movement. These are very different goals and need to be discussed in advance.”

Gray was joined by fellow panelists Walette Stanford, Ethics Director/Ethics Officer at JEA Corp in Jacksonville, Fla., Kimya Johnson, Chief Diversity Equity & Inclusion Officer at Jackson Lewis P.C. in Philadelphia, and Keilon Forest, Policy Director at the Association of Corporate Counsel Foundation in Washington, D.C. The program was moderated by Rich Ehisen, managing editor of State Net Capitol Journal, a LexisNexis publication that covers state public policy issues and trends nationwide.

“DEI is a journey, not a sprint,” said Ms. Stanford. “You need to have clear objectives and you need to have management support to stick it out for the long run.”

The panelists shared eight best practices for constructing an effective DE&I program:

Assessment

“DEI success begins with an assessment to understand where your organization may be today,” said Ms. Johnson. “DEI is not ‘one size fits all’ so it’s important to truly get a handle on where your organization is and where it needs to go. I advise companies to set realistic expectations for your program and not to over-promise on how much you can accomplish within a specific time frame. If you have unrealistic expectations and fail to manage those expectations, you run the risk of trying to be all things to all people, which just won’t work.”

Metrics

“This isn’t the time to be vague about your business goals with a new corporate program,” said Mr. Forest. “It’s important to set specific milestones and targets for DEI so you can measure your actual progress and evaluate how effective your initiatives have been in this area.”

Budget

“Where your treasure lies, there your heart lies also,” said Mr. Forest. “You need to establish a budget that is sufficient for funding your overall DEI program and then you can align that budget with the individual initiatives that will help you achieve your organization’s DEI goals and objectives.”

Champions

“DEI requires champions on the executive team in order to be taken seriously throughout your organization,” said Ms. Johnson. “This sends a clear message to your workforce that we’re serious about this commitment and will allocate the resources needed to get it done.”

Hiring

“Look for groups of people who are often overlooked by our traditional ideas of applying DEI to hiring strategies,” said Mr. Forest. “For example, you might think about how to attract women who left the workforce for a period of time and are now struggling to find an on-ramp back into their careers.”

Salary Transparency

“Many organizations have discovered that sharing salary information improves trust by being more transparent with employees,” said Ms. Stanford. “In addition, this can help eliminate some unconscious bias that may have crept into the organization with salary disparities.”

Privacy

“We need to ask people how they self-identify in very personal terms in order to accurately monitor DEI efforts,” said Ms. Johnson. “But we also need to build in appropriate safeguards and policies to protect personal information and ensure data privacy. This may require new systems, new disclosures and new approaches.” Ms. Gray advised leaders to “be very intentional about what personal data you want to collect” and to “work closely with your legal and compliance departments to make sure that you are collecting that data properly and storing it appropriately so it is protected.”

Evaluation

“There are two key elements to this process,” said Mr. Forest. “First, you need to put the right DEI benchmarks in place and measure how you are doing against those program metrics. Second, you need to keep a close eye on your retention metrics for real-time feedback on how the program is being perceived within your organization. People stay where they’re happy so this is an important element to monitor.” In addition to metrics, it is also important to solicit and evaluate employee feedback. “It’s especially critical to collect feedback from departing employees as they tend to be more honest and open about their experiences at your organization,” said Ms. Gray. “This feedback will help you assess how you’re doing.”

Even as corporate executives invest in the development of their DE&I programs, compliance professionals need to be aware of recent legislative developments at the state level that could have an impact on the way these programs are implemented. For example, state legislation passed in Florida and New Hampshire has raised questions about whether it is now permissible for discussions about topics such as gender identity and racial justice to be encouraged in the workplace.

Watch a recorded playback of the State Net webinar, “Compliance Considerations for Effective DEI Policies,” for insights about the growing importance of diversity, equity and inclusion programs, tips for constructing an effective DE&I program, and related legislative developments that require ongoing monitoring for compliance.