Why DEI Matters in 2022

Diversity, equity, and inclusion (DEI) in the workplace, growing in importance and visibility, is not simply the representation of differences among your employees but equal opportunity for and full participation by all your employees. DEI focuses on a host of differences, often those historically subject to underrepresentation or discrimination, including race, gender, ethnicity, religious affiliation, national origin, sexual orientation, language, disability, and age.

Current State of Diversity

Although much progress has been made in workplace diversity, progress remains to be made. And social, cultural, and health-related events of the past few years, including the COVID-19 pandemic, have made DEI issues more important than ever.

1. Non-Hispanic whites make up less than 60% of the US population for the first time

Before we jump into workplace diversity, it is important to note the changing demographics of the country as a whole. The 2020 census reported that non-Hispanic whites make up 57.8% of the US population, down from 63.7% in 2010. The shift is more pronounced for young people. For individuals under the age of 18, there is no majority racial or ethnic group.

2. 77% of the labor force identifies as white

The workforce is also becoming more racially diverse but at a slower pace than the overall population. In 2019, individuals that identified as white (including Hispanics) made up 77% of the labor force, which compares to 81% in 2010. Blacks and Asians made up 13% and 6%, respectively, of the workforce in 2019.

Showing Composition of the Labor Force by Race.

3. Women’s labor force participation rate in the US is 56%

According to Federal Reserve analysis, about 56% of adult women are employed or actively seeking work. This number hasn’t risen significantly since about 1990. Men’s labor force participation rate is about 10 points higher.

4. Women, People of Color, and LGBTQ+ employees report more challenges during COVID-19

A McKinsey & Company study found that women are 1.2 times as likely to cite a host of challenges (including workload increases, workplace connectivity, and worksite safety) than men. Likewise, People of Color are more likely to cite career progression and workplace safety challenges than whites, and LGBTQ+ employees are more likely than their cisgender counterparts to cite challenges in workplace belonging, increased workload, and fair performance evaluations.

Key DEI Issues

DEI issues can be different for each industry and each individual company. We have listed the following statistics that highlight some of the most common DEI issues.

5. Whites make up over 90% of construction managers and 85% of mental health therapists

Some sectors struggle to reflect the changing nature of today’s workforce and have lagged behind the general labor trends. Some examples include industries such as engineering, construction, law, and public relations.

Even a sector like nonprofit, which often serves underrepresented individuals, still has diversity issues. This is especially noticed at the advisory level where whites make up the vast majority of executive positions and board memberships.

Showing Race and Ethnicity Representation in Nonprofits.

6. Only 29% of respondents at small organizations think their workforce reflects the demographics of their environment

Small businesses particularly struggle with ensuring that their workforce mirrors the demographics of the area, with less than a third of employees agreeing or strongly agreeing that they do. Midsize and large companies fare better with 57% and 64% of employees, respectively, saying the same.

For tips on where to find a diverse talent pool for your open positions, read our guide on diversity job boards.

7. African Americans and Hispanic Americans make up 12% and 10%, respectively, of support staff positions but only 2% and 3% of executive positions

The issue of diversity goes further than the top levels of management. At each level of promotion, the percentage of nonwhite males decreases. Similarity bias states that you are more likely to hire individuals who you find to be similar to you. With the current trends combined with similarity biases, this trend is set to continue unless businesses consider diversity a priority.

Learn about other biases that might influence your hiring decisions and how to combat them.

Showing Employee Distribution by Race/Ethnicity and Career Level.

8. Nearly half of LGBT workers have experienced some form of unfair treatment at work

A May 2021 survey of 935 LGBT workers from the UCLA Williams Institute found that 46% of them have been unfairly treated at work. This includes not being hired, being fired, and being harassed. A full third of LGBT employees have left a job because of unfair treatment.

The number of workers who identified as LGBT in the US is around 8.1 million. Nearly half of those live in the 27 states that do not have laws specifically prohibiting discrimination based on sexual orientation or gender identity, making it harder for these employees to fight unfair practices.

9. Nearly half of Black and Hispanic employees have quit a job after experiencing or witnessing discrimination

A more significant number of employees than you might expect have quit a job because of what they see as unfair treatment in the workplace. Glassdoor found that 47% of Black and 49% of Hispanic employees have taken this action. This compares to 38% of white employees.

Discrimination and diversity are linked and can be a vicious cycle because a company’s lack of diversity may be due to unfair treatment that has occurred in the past. The cost of replacing these employees can cause a financial strain on companies (Gallup reports it can cost anywhere from half to up to twice a worker’s annual salary to replace them).

10. More than 75% of job applicants report that having a diverse workforce is important when making a decision on where to work

Lack of diversity not only makes employees more likely to leave but it also makes job applicants less likely to select an employer if all other factors are equal. Three-fourths of all job applicants say diversity is an important consideration, and that number is higher among historically underrepresented groups, including women, Black, Hispanic, and LGBTQ job seekers. In fact, 41% of Black and LGBTQ job seekers will not even apply to a job when there is a lack of diversity in the company.

Showing Importance of Diversity to Employees Job Seekers.

Make sure you promote your company’s diversity efforts as part of the recruiting and hiring process so candidates will know your commitment to the issue.

11. Only about 40% of organizations have mature diversity initiatives

One reason many organizations do not have diverse teams, especially in leadership, is because their diversity in the workplace programs are new—or even nonexistent. A 2021 HR Research Institute survey found that only 41% of HR professionals feel their organizations’ DEI initiatives are at advanced or expert stages. About 20% felt those initiatives were just beginning in their organizations, and 10% said “little or nothing has been done to increase DEI.”

12. Only 12% of businesses hold managers responsible for recruiting diverse candidates

Many companies are reluctant to hold employees accountable for their diversity efforts. Instead of it being assigned to managers or recruiters, it is typically assigned to the compliance department, where more emphasis is placed on having a policy versus implementing the policy. Only 12% of managers and 11% of recruiters are responsible for sourcing or recruiting candidates from diverse populations according to the Josh Bersin Academy. As a result, these initiatives may not be shown the same priority as goals that will be on an employee’s performance review.

Benefits of Diversity in the Workplace

When speaking about diversity, one of the main things that employers ask is if investing in diversity makes them more successful. Tracking any business decision to financial success can be hard because business decisions are not typically done in a vacuum. However, listed below are some financial and non-financial benefits of prioritizing a diverse workforce.

13. Companies with diverse executive teams are likelier to have better profitability

Diversity has shown to have a positive impact on many companies’ bottom line. According to a McKinsey & Company study, companies in the top quartile of gender-diverse executive teams are 25% more likely to have better-than-average profitability than companies in the bottom quartile. The same trend was seen with ethnic and cultural diversity, although that 25% goes up to 36%.

14. Companies are 2.6x more likely to retain their workforce if they employ strong DEI measures

Businesses that spend time and resources on removing barriers and promoting DEI initiatives are 2.6 times more likely to increase employee engagement and improve retention. This is in part because they are more likely to create a sense of belonging and connection among employees, among other things.

Showing Outcomes of a DEI Focus.

15. Employee perception of their company’s diversity efforts impact workforce happiness

The Workforce Happiness Index, from CNBC and SurveyMonkey, is a rating derived from an employee survey that measures pay, advancement, value, autonomy, and meaningfulness. That score is 12 points lower among employees who don’t believe their company is not doing enough relating to DEI as compared to those who do (63 to 75).

Making diversity content a significant part of your training and development initiatives can help ensure your employees know the importance you place on the subject.

The fact that employees are happier when employers make the appropriate investment in DEI shows the importance of these initiatives. Happier employees are more productive, more engaged, and stay in their current job longer.

Bottom Line

Diversity is increasingly top-of-mind for both employers and employees, not to mention consumers (several studies show heightened consumer interest in companies’ DEI initiatives). The diversity in the workplace statistics we’ve covered above should give you insight into the current environment and explain some of the benefits of embracing diversity. It not only helps an employer’s profitability but also boosts employees’ morale, retention, engagement, and decision-making.

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