DEI trends all companies should watch out for in 2023

“Diversity and inclusion merit the same urgency as climate change. It’s time we started acting like it”. Ilham Kadri, CEO of Solvay, said it at the World Economic Forum Annual Meeting 2022 and we couldn’t agree more.

Diversity, equity and inclusion (DEI) are more than just a hot topic in the business world. As stakeholder demands grow – from investors all the way to consumers – and Gen Z takes the world of work by storm, DEI are truly becoming an integral part of business success.

In 2023, organisations need to move the needle by making one-shot diversity training a thing of the past and approach DEI as a cross-cutting strategic area.


Why are some companies still neglecting DEI?

Some organisations still struggle with DEI hurdles such as: executive leadership buy-in, budget constraints (particularly in current times marked by a war in Europa and economic instability), data availability, and lack of readiness to design a solid strategy. Many companies do not know how to tackle DEI and overcome these obstacles.

However, the cost of not ingraining DEI into the business strategy is growing higher as the business case for DEI grows stronger. Research shows links between diverse & inclusive teams and increased employee motivation, innovation, and performance leading to probability of higher profits for the company. 

Plus, in a world marked by a pandemic, employees are reviewing their work-life balance and priorities and pushing for remote work and more flexibility. If companies do not address these concerns preemptively they stand at risk of losing their employees to the competition or facing quiet quitting and declining performance. Certainly a scenario to avoid.

As we kick-off 2023, we want to help you internally build the case for diversity, equity, & inclusion and develop a solid strategy that actually pays off. Thus, we’re sharing top trends for DEI in 2023 that will truly make a difference for your organisation.


Trend #1: Data-centric DEI

Tracking diversity, equity, and inclusion is becoming more common. Stakeholders’ demands for accountability and transparency combined with the need to translate high investments in DEI into impact make collecting and analysing data paramount.

For a DEI strategy to work, however, simply doing a one-shot survey does to suffice. You need to collect data regularly, establish a baseline, define key priorities and metrics, and identify the owners of each goal. Only then will your DEI decisions be informed and backed by data.

According to a study from Harvard Business Review, most companies use one or more metrics to support their diversity and inclusion strategy. But you need to use the right ones in a combination of outcome and process metrics.

Outcome metrics indicate a problem whereas process metrics find out where attention is needed to bring about meaningful change. Outcome metrics indicate body count – e.g. the number of women and men in a company – and are vital to creating a baseline. 

Process metrics, on the other hand, can showcase employee turnover or the speed at which employees who are also parents move up the corporate ladder. A company should use both outcome and process metrics in its plan for achieving inclusion and diversity goals. 

Moreover, the use of data has helped diversity managers get other managers on board for DEI programs. The reason is that you can mode the discussion from opinion and ideology-based to fact-based, whilst tracking your progress. 

The diversity chief at a Georgia food firm, for instance, shared that their workforce demographics did not match the local demographics. Monthly metrics allowed her to see when and where the firm is losing ground and get out in front of the problem.


Trend #2: Inclusion as an enabler of diversity

“Diversity wins: How inclusion matters” was the title of a McKinsey report in 2020 – and rightly so. Their research has shown that the benefits of having a diverse workforce can only be leveraged through inclusion. And the reason is fairly straightforward. 

If you are the only person from a historically marginalised group in your team and the company culture is not inclusive you will hardly feel comfortable sharing your views and opinions. 

Increasing diversity does not, by itself, increase effectiveness. What matters is how an organisation leverages diversity and whether it is willing to reshape its power structure. Having an inclusive workplace culture will not only help you attract a diverse set of talent but also help you retain the diverse talent you attracted in the first place.

So, instead of increasing diversity and then working on inclusion, do it simultaneously. Inclusion can lead to more employee motivation, and, therefore, better performance. But it can also boost diversity in an organisation or team and unlock its great benefits such as increased innovation and employee retention.

Spotify is one of the companies that has seen this happen. After adopting an inclusion policy that allows employees to work from anywhere in the world, Spotify registered a 13% growth of African-American employees and 18% of Hispanic employees. In leadership, the female population increased from 25% to 42%. And the attrition rate of employees dropped by 15%, saving the company both a time and money.


Trend #3: DEI across the value chain

Diversity and inclusion aren’t just an HR or CSR affair anymore. Determining how well a company is doing with DEI involves factoring in internal and external practices. Focusing on DEI across the value chain means ingraining your business plan with these principles to impact all stakeholders including investors, outreach partners, suppliers, employees, and also customers.

Companies can do so by providing inclusive options to consumers and hiring diverse suppliers. By using a business model that has diversity and inclusion in its core, the company will be able to cater to a much wider customer base and show a conscious effort to support historically marginalised groups and extend your business impact beyond employment.

The transversality of DEI becomes increasingly noticeable as demands for inclusive purchasing and inclusive communication grow. Today, the internal focus on DEI is just a step towards a more diverse and inclusive company and considering all the stages of the value chain is mandatory.

You can find these and more trends on our free ebook. Download it for a deep dive into what will mark the world of DEI in 2023.

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