Beyond buzzwords: Understanding the impact of diversity, equity, and inclusion

Beyond buzzwords: Understanding the impact of diversity, equity, and inclusion

This insights report discusses how focusing on diversity, equity, and inclusion initiatives improves retention and performance.
Download report
← Back to Learn
Overview
Summary

A 2022 survey by GoodHire found 81 percent of respondents would consider leaving their jobs due to a lack of DEI commitment by their employer. While the cost of replacing an employee can range from one-half to two times their annual salary, it’s not just retention at stake when choosing whether to adopt a DEI strategy.

Eightfold’s research found that a commitment to DEI can benefit organizations in five key areas: retention, productivity, innovation, brand image, and profitability.

Read our latest insights report to learn:

  • How a commitment to DEI can sustain long-term growth and profitability
  • Why focusing on a skills-based talent strategy can help increase equity and decrease bias
  • Seven steps your organization can take to improve its DEI outcomes

People want to work for companies dedicated to diverse, equitable, and inclusive workplaces. According to a 2022 GoodHire survey of U.S. workers, 81 percent of respondents would consider leaving their jobs due to a lack of DEI commitment by their employer.

But the commitment to DEI must go beyond lip service. To be successful, organizations should embed DEI best practices into everything they do — hiring, promoting, and serving customers. Research and time have proven the benefits are worth it.

Not only do DEI initiatives help with hiring and retention, but diversity is a spark plug for performance. A 2021 study by Gartner revealed that eight out of 10 leaders found that DEI is extremely important in helping their organizations achieve their business goals.

In the last few years, the C-suite has begun to catch on. Roughly 40 percent of companies discussed diversity and inclusion in their earnings calls in 2020 compared to only 4 percent in 2019 — an increase of 900 percent. Overall, the benefits of DEI can be distilled into five key areas: retention, productivity, innovation, brand image, and profitability.

Employees want to work for diverse and inclusive companies

The cost of replacing an employee can range from one-half to two times the employee’s annual salary. In addition to the direct monetary costs of attrition, there are indirect costs, including lost knowledge and a negative impact on company culture, which can lead to lower productivity and engagement.

A 2021 study of 8,200 adults in the U.S. by Momentive.ai found that employees’ perception of their organization’s DEI efforts had a major impact on their job satisfaction. Eightfold’s research team confirmed this finding, discovering that an organization’s overall rating on Glassdoor

is highly correlated with its DEI rating — the more employees feel their organization values diversity, the higher that organization’s overall score on Glassdoor.

However, while many organizations prioritized working toward strengthening and supporting DEI practices in 2020, in large part due to the Black Lives Matter movement, more recent events, including market uncertainty and the economy, indicate that companies have perhaps shifted some focus elsewhere.

Eightfold data found that four out of the five top-performing firms fell below their respective industry averages in their retention ofunderrepresented workers (Blacks and Hispanics) in 2022. And all five firms researched fell drastically below the industry averages in terms of gender diversity throughout the 2019 to 2022 time period, except in one instance where the firm met the industry average.

The gender diversity data is, at least in part, attributed to the number of women who left the workforce during the pandemic to provide care for their families. Eightfold data has also shown that, in the tech industry, women are 65 percent more likely to be laid off than men, a factor that would have impacted their total workforce numbers in 2022.

In some good news related to retention and race, while Eightfold data saw three industry averages in racial diversity in the workforce decrease from 2019 to 2021, they rose in 2022 in healthcare, aerospace, and telecom. Pharma also saw a rise in 2021, but then fell back to 2019 levels in 2022. In terms of gender, all four of these industries are now on an upward trend in retaining women.

 

Download report

You might also like...

HR leaders are transforming their workforces with talent intelligence.

Get the latest talent news in your inbox every month

Sign up for our newsletter
Request demo

Share Popup Title

[eif_share_buttons]