How to build DEI into your budget

Workplaces globally are undergoing tremendous change propelled by emerging technologies and accelerated by the pandemic. Moreover, the social justice movements in 2020 pushed companies across countries to lay emphasis on diversity, equity and inclusion (DEI). DEI is a powerful term that is majorly impacting the workplace. Yet there is an obvious lack of clarity around it. In this article, we take a close look at DEI, its significance and how organisations can embed it.

What are Diversity, Equity and Inclusion?

Diversity is the presence of differences within a given setting that may include gender, race, religion, ethnicity, nationality, sexual orientation, socioeconomic status, language, (dis)ability, age etc. It includes groups that are underrepresented or marginalised in society.

Equity is ensuring that access opportunities and resources are provided to everyone for their development and success, especially those who are at a disadvantage. Building equity requires an understanding of the causes of disparities in outcomes in society.

Inclusion is when diverse individuals can get opportunities for development and fully participate in the decision-making processes within an organisation. Inclusion enables people that are different to actually feel welcomed and valued.

Why is DEI important for organisations?

Organisations are regarding diversity, equity and inclusion as a source of competitive advantage. The International Labour Organisation asserts that “companies with more inclusive business cultures and policies see a 59 per cent increase in innovation and 37 per cent better assessment of consumer interest and demand.”

Companies with a diverse workforce tend to financially outperform. In its 2020 “Diversity wins” report, consulting firm McKinsey found that companies in the top quartile for ethnic and cultural diversity outperformed those at the bottom by 36 per cent in profitability. Bringing diverse perspectives and using them in your organisation’s problem-solving process is likely to yield better outcomes while trying to address complex challenges.

Employees and job seekers are also increasingly considering a company’s diversity to be an important factor. A CNBC workforce survey reports that 80 per cent of employees prefer working at an organisation that prioritises diversity, equity and inclusion. Organisations that ensure fair hiring and promotion practices, implement ongoing training, form a diversity committee and solicit consistent employee feedback have a higher probability to excel.

Ways to build DEI in an organisation

Effective DEI spending requires more effort to generate an impact that resonates with employees and goes beyond the surface level commitment. Employers must determine whether there are barriers affecting the employment, opportunity or inclusion of individuals and whether any policy needs to be modified or eliminated. Before you start spending on DEI initiatives, here’s an outline of best practices that can ensure meaningful cultural change.

Evaluate your current set of initiatives

Organisations must understand their workforce in comparison with the market to learn about existing inequities based on demographics. Through information about employee perception of the company and employee demographics, employers will have an overview of the workplace diversity and equity of their practices, which will help identify areas of concern and improve upon them. Employee demographic data may include age, gender, language, race, disability, ethnicity, religion, nationality, family status, learning styles, personality type and so on.

Goal setting and DEI budget planning

Diversity, equity and inclusion initiatives in companies differ significantly. Practices that companies engage in to address DEI include facilitating development activities to celebrate culture and improving DEI-related communication, philanthropy etc., depending on the objectives of the company. While considering the funding for specific programmes, an organisation should look at diversity in its corporate environment. Organisations must clearly budget for DEI initiatives and leaders at companies with such workplace programmes must support them by communicating these as priorities to their employees and the business community.

Distributing the budget

The distribution of an organisation’s DEI budget is dependent on its goals, as already mentioned above. The budget can be distributed and channelled towards workplace functions or business activities (such as training, marketing, recruitment, philanthropy etc.). Companies typically divert a part of their diversity budget to cover general administrative costs like staffing and payroll for DEI-related staff.

Recruitment and DEI team

DEI scope and department responsibility are different for every company. Large organisations may have a chief diversity officer or a DEI team that reports directly to the leadership and oversees all DEI-based programmes while smaller organisations depend on their human resources to front them. Typically, the salaries and recruitment budget for DEI is dependent on the budget for corporate DEI whereby more funds are attributed to hiring in-house employees to promote these values.

Programmes and a follow-through

Build cultural and inclusive decision-making across the organisation for teams to effectively harness existing team diversity and capitalise on diverse ideas. These programmes should be followed through to see the outcomes of increased representation of identified groups and improved employee scores to understand the success levels of the implemented programmes. DEI initiatives require an ongoing review of the workforce to respond to changing needs; therefore, employers must establish procedures for follow-ups and periodic reviews of their DEI initiatives and goals.

Diversity can improve the working environment of an organisation. With initiatives like the Careernet Prism, employers can build inclusive workplaces with diverse talent. Embedding equity will promote impartiality and justice in processes, procedures and distribution of resources within a workplace. Embracing and celebrating diversity, equity and inclusion in the workplace not only ensures a positive atmosphere for employees at all levels but helps an organisation achieve enduring results.