What is diversity, equity and inclusion (DE&I) Flashcards
What does equity refer to?
Equity refers to fair treatment for all people, so that the norms, practices, and policies in place ensure identity is not predictive of opportunities or workplace outcomes. Equity differs from equality in a subtle but important way. While equality assumes that all people should be treated the same, equity takes into consideration a person’s unique circumstances, adjusting treatment accordingly so that the end result is equal. In an episode of the McKinsey Talks Talent podcast on the inclusive workplace, McKinsey senior partner and talent expert Bill Schaninger offers a view on the implications of equity when sourcing talent: “There’s a real difference between equal and equitable. Suppose we said, ‘All interns are created equal. We pay them nothing.’ The people who can afford an entire summer without getting paid are likely already coming from a position of privilege.
What does inclusion refer to?
Inclusion refers to how the workforce experiences the workplace and the degree to which organizations embrace all employees and enable them to make meaningful contributions. Companies that are intent on recruiting a diverse workforce must also strive to develop a sufficiently inclusive culture, such that all employees feel their voices will be heard—critical if organizations want to retain their talent and unlock the power of their diverse workforce.
Why is diversity in the workplace important?
The latest findings draw from a data set that encompasses 15 countries and more than 1,000 large companies, as well as research on employee sentiment, and the results show a correlative relationship between business performance and diversity. It’s worth noting that greater access to talent and increased employee engagement contribute to this performance effect. The business case for diversity is robust, and the relationship between diversity on executive teams and the likelihood of financial outperformance has gotten stronger over time.
Some of the key findings from the latest Diversity wins report include the following
There are clear correlations between diversity and business performance. Analysis of 2019 data shows that companies in the top quartile for gender diversity within executive teams were 25 percent more likely than companies in the fourth quartile to have above-average profitability (up from 21 percent in 2017 and 15 percent in 2014).
The greater the representation of gender diversity, the higher the likelihood of outperformance. For instance, companies where more than 30 percent of the executives are women were more likely to outperform companies where this percentage ranged from only 10 to 30. The most gender-diverse companies see a substantial differential likelihood of outperformance—48 percent—over the least gender-diverse companies.
The business case for ethnic and cultural diversity is also strong: in 2019, companies in the top quartile bested those in the fourth quartile by 36 percent in profitability. Notably, the likelihood of outperformance continues to be higher for diversity in ethnicity than in gender.
Despite employees’ support of diversity, there are high levels of negative sentiment on inclusion—namely, equality, openness, and belonging—particularly around equality and fairness of opportunity.
Most employees support diversity, with overall sentiment on diversity 52 percent positive and 31 percent negative.
What other benefits (apart from profitability) can organizations realize from inclusion and diversity?
Winning talent: Organizations that monitor the demographic profile of their workforces are better able to retain top performers while making sure that diverse talent isn’t lost.
Improving the quality of decision making: Diversity brings multiple perspectives to the table during times when enhanced problem-solving skills and vision are needed.
Increasing customer insight and innovation: Diverse teams are typically more innovative and better at anticipating shifts.
Driving employee motivation and satisfaction: Research in Latin America showed that companies that are committed to diversity are 75 percent more likely to report a pro-teamwork culture.
Improving a company’s global image and license to operate: Companies that can maintain or increase their focus on inclusion and diversity during crises are poised to avoid consequences such as struggling to attract talent or losing customers and government support.
What is intersectionality?
Intersectionality, a term coined by Professor Kimberlé Crenshaw in 1989, refers to the ways different parts of one’s identity intersect or overlap with one another. For instance, gender is one aspect of a person’s identity, but so are sexual orientation and race. A Black woman who is queer, or a White woman who has a disability, may take a perspective that acknowledges how those different aspects of their identity overlap or intersect. McKinsey’s Women in the Workplace 2021 report, for instance, found that LGBTQ+ women, as well as women with disabilities, are much more likely than women overall to experience microaggressions on the job.
Acknowledging intersectional identities can strengthen companies and communities more broadly
