Diversity, Equity, And Inclusion: A Bridge From Risk Mitigation To Culture Change
3 concrete ways organizations can mitigate legal and strategic risks with DEI
Posted on 06-29-2021, Read Time: Min
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An effective diversity, equity, and inclusion (DEI) program requires an organizational commitment to increasing opportunities for everyone in the workplace, and particularly for individuals from traditionally underrepresented or marginalized groups. Starting with the highest levels of an organization, these programs involve policies and practices, including training, that can help prevent discrimination and harassment issues before they begin.
As we learn more about the power of DEI programs, we are finding that they not only help prevent discrimination and harassment, but also help mitigate other strategic risks, while offering a number of long-term benefits. Through the change they bring to an organization’s culture, DEI programs enhance collaboration and increase innovation, growth potential, and profitability. Using risk management and compliance as a starting point, DEI can improve the overall organizational performance, particularly in the areas of innovation and relevance to customers.
Preventing Discrimination and Harassment
Discrimination and harassment claims are costly to defend and resolve, and can be very disruptive to an organization. DEI programs help prevent discrimination by increasing awareness of its more subtle forms. Discrimination laws prohibit employers from using protected characteristics like race, gender, and age as the basis of employment decisions, from hiring and firing to work assignments, opportunities for advancement, and other job benefits.In many instances, however, discrimination arises from decisions that are not intentionally discriminatory, but are based on stereotypes and the biases that drive them. For example, a manager might decide not to offer a work opportunity that involves a significant amount of travel to a mother of young children, thereby limiting her opportunity for professional development and advancement. An effective DEI program will uncover the harmful effects of these biases and challenge decision-makers to avoid them.
Harassment is a form of employment discrimination that violates Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, (ADEA), and the Americans with Disabilities Act of 1990, (ADA).
—U.S. Equal Employment Opportunity Commission
—U.S. Equal Employment Opportunity Commission
DEI programs also help prevent harassment, which is a form of discrimination. According to the 2016 Equal Employment Opportunity Commission (EEOC) task force report on workplace harassment, diverse workforces are at greater risk of harassment. Employers need a true commitment to respecting diversity backed by accountability at every level to address this increased risk.
Going Beyond Compliance
Reducing HR risk around discrimination and harassment is only one part of why an organization should have a DEI program. Title VII of the Civil Rights Act of 1964, which "protects employees and job applicants from employment discrimination based on race, color, religion, sex and national origin," was a landmark legislation that has transformed American society profoundly. However, Title VII and other anti-discrimination laws have their limits.As Supreme Court Justice Scalia recognized in Oncale v. Sundowner Offshore Services, Title VII is not "a general civility code for the American workplace." 523 U.S. 75 (1998). Much of the exclusionary behavior that leads to inequality in the workplace is outside the reach of these laws, so to succeed with DEI initiatives, organizations have to go beyond compliance.
A DEI program and the education that goes with it can help managers and employees understand how their behavior fits within a larger cultural context, addressing both the moral basis of DEI initiatives as well as the business case for them. A critical part of embarking on a DEI journey is to help people recognize their own personal biases, and create a supportive environment where all employees are part of the solution.
Addressing Unconscious Bias With Education
Education in the form of training that includes reality-based scenarios is key to supporting a DEI effort. It can help people to better understand others who are different from themselves and approach them in a more inclusive way. Research on the effectiveness of training shows that it can help everyone understand how others can experience the same workplace in very different ways. It can also build knowledge of unconscious bias—why it exists, how it manifests itself, and its impact—and develop practical skills to address it.According to a study reported in the Harvard Business Review, research indicated that after DEI training, employees are more likely to "acknowledge their own racial biases, provide informal mentorship to racial minorities, and recognize the excellent work of their peers who were racial minorities." Researchers went on to say that "[i]t appears that helping people recognize biases towards one marginalized group of people can have positive spillover effects on their attitudes and behaviors towards other marginalized groups."
Learning to Appreciate Our Differences
Experts in the field of diversity counsel organizations to help employees understand that everyone has biases that are based on their personal life experiences. And by understanding and appreciating these differences, inclusivity can truly take hold. This approach applies not only to employees, but also managers.Eric Ellis, CEO of Integrity Development Corp. and a member of the Society for Human Resource Management's (SHRM) Diversity & Inclusion Special Expertise Panel, said in a conference address that to be intentionally inclusive, HR managers must ask themselves, "How am I going to disrupt the unconscious bias throughout all the stages of our talent lifecycle?" and begin to recognize the need "to 'own' my own bias and create a psychologically safe environment where other people could do the same."
After DEI training, employees are more likely to "acknowledge their own racial biases, provide informal mentorship to racial minorities, and recognize the excellent work of their peers who were racial minorities."
—"Does Diversity Training Work the Way It’s Supposed To?" Harvard Business Review
—"Does Diversity Training Work the Way It’s Supposed To?" Harvard Business Review
To ensure employees embrace diversity, equity, and inclusion, organizations have to help their people fully value and incorporate ideas they are not familiar with. As they understand biases better, a more inclusive culture can emerge, enabling more collaborative ways of working. That, in turn, creates the opportunity for increased productivity, motivation, and success for employees and their organizations.
DEI as a Factor in Risk Prevention
At the same time that DEI education can create a more elevated culture, it can also help mitigate legal and strategic risks in a way that protects both organizations and employees. The reverse is also true—a lack of diversity and inclusion in an organization can create risk. In his LinkedIn article, governance expert David Doughty makes the case that, "There is a growing view that a lack of diversity and inclusion in the workforce is a major strategic business risk," and adds that there is a "serious reputational risk, which will influence how stakeholders, including prospective and current employees, customers and regulators" view organizations. He goes on to say that diversity and inclusion is “...a business risk that demands to be actively measured, monitored and managed."There is a growing view that a lack of diversity and inclusion in the workforce is a major strategic business risk.
How to Mitigate Strategic Risks
The right approach can turn this negative into a positive. A successful DEI program, with a strong educational component, can mitigate strategic risks by reshaping cultural awareness and addressing inequalities in systems and processes, thereby creating a more equitable and inclusive environment that reverberates throughout the organization.Here are some concrete ways by which organizations can mitigate their legal and strategic risks with DEI.
1. Reduce costly turnover: Use an inclusive approach to make all employees part of the solution
With education and training that takes a positive, all-inclusive approach, employees can get the tools they need to build trust, listen, recognize and avoid exclusive behaviors and micro-aggressions, and become empowered to amplify others’ voices. That leads to an environment where people feel supported, safe, and comfortable—where employees can naturally become more engaged. And engagement is critical to avoiding high turnover, a major risk for organizations. According to a Gallup report, "Highly engaged business units have 41 percent less absenteeism and 17 percent more productivity. Within high-turnover organizations, highly engaged business units experience 24 percent less turnover."
2. Avoid damaging interactions with customers: Help employees develop sensitivity and empathy
Examples abound of situations where employee interactions with customers took a bad turn around diversity-related issues. And much of this relates to an employee’s ability to empathize with their customer.
According to Forrester’s research, "Empathy is critical yet elusive. Consumers are gravitating toward brands that prioritize people over profits. While nearly all businesses know the importance of showing customer empathy, most struggle to deliver it." With proper education and training, employees can learn to spot potentially sensitive situations and have the skills they need to manage them successfully.
3. Broaden a dwindling talent pool: Remove systems and processes that perpetuate biases
One of the toughest challenges for an organization can be addressing ingrained systems and processes that can create built-in biases.
For instance, some processes and systems may deny an equitable opportunity for advancement. Or certain hiring practices may have an inherent bias that might cause some people with diverse backgrounds to feel excluded. Removing these barriers helps retain existing talent and opens the doors to a more diverse talent pool.
With education and training that takes a positive, all-inclusive approach, employees can get the tools they need to build trust, listen, recognize and avoid exclusive behaviors and micro-aggressions, and become empowered to amplify others’ voices. That leads to an environment where people feel supported, safe, and comfortable—where employees can naturally become more engaged. And engagement is critical to avoiding high turnover, a major risk for organizations. According to a Gallup report, "Highly engaged business units have 41 percent less absenteeism and 17 percent more productivity. Within high-turnover organizations, highly engaged business units experience 24 percent less turnover."
2. Avoid damaging interactions with customers: Help employees develop sensitivity and empathy
Examples abound of situations where employee interactions with customers took a bad turn around diversity-related issues. And much of this relates to an employee’s ability to empathize with their customer.
According to Forrester’s research, "Empathy is critical yet elusive. Consumers are gravitating toward brands that prioritize people over profits. While nearly all businesses know the importance of showing customer empathy, most struggle to deliver it." With proper education and training, employees can learn to spot potentially sensitive situations and have the skills they need to manage them successfully.
3. Broaden a dwindling talent pool: Remove systems and processes that perpetuate biases
One of the toughest challenges for an organization can be addressing ingrained systems and processes that can create built-in biases.
For instance, some processes and systems may deny an equitable opportunity for advancement. Or certain hiring practices may have an inherent bias that might cause some people with diverse backgrounds to feel excluded. Removing these barriers helps retain existing talent and opens the doors to a more diverse talent pool.
All of the strategies above will also mitigate two other major organizational risks: reputational fall-out and legal risks associated with diversity-related missteps. Once a company’s reputation is damaged—either through public humiliation or with lawsuits over its practices—it can be very difficult and expensive for the organization to recover. In some cases, it may be impossible.
Companies Are Committing to DEI
Many companies are starting to demonstrate the value they place on diversity, equity, and inclusion by taking concrete steps to include DEI in their plans. An overview of a survey by the Society for Human Resource Management (SHRM) reported that 62 percent of HR professionals responding said their "organization plans to take action to combat racial inequities." And according to LinkedIn's 2021 Workplace Learning Report, nearly two-thirds (64 percent) of learning and development professionals globally—and nearly three-quarters (73 percent) in North America—report that their executives have made diversity and inclusion (D&I) programs a priority. HR risk and compliance professionals have an important role to play in this work.As the case for DEI programs grows stronger, the realization of their power is starting to take hold. And as more companies see the positive results that DEI can create, by serving as a bridge from mitigating risk to effecting positive culture change, leading to increases in innovation, growth, and prosperity, others will follow suit. The need to press forward with DEI is as much a business imperative as it is a moral responsibility.
Author Bio
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Alex Miller is a Senior Product Manager at Kantola Training Solutions. Visit www.kantola.com Connect Alex Miller Follow @KantolaTraining |
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Natasha Nicholson is the Content and Communication Leader at Kantola Training Solutions. Visit www.kantola.com Connect Natasha Nicholson Follow @KantolaTraining |
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