Diversity, Equity and Inclusion (DE&I) should be a business priority for every company. Yet many companies still lag behind, with 75% of workers saying that their employers need to do more.
And yet, when HR leaders try to launch a DE&I initiative, they often run into roadblocks. DE&I efforts require a lot of dedication, effort and investment. And it's hard to secure the necessary resources unless you've got support from the top.
Getting leadership buy-in is easier if you can show that your project will produce tangible results. But how can you get them to invest in something that doesn’t directly generate revenue, like Diversity, Equity and Inclusion?
Building an argument in favor of DE&I investment
Any conversation about expenditure eventually comes down to Return on Investment (ROI). The CEO wants to know one thing: if they spend money on this now, will it result in greater profitability further down the line?
For an ROI argument, you need to show that money spent on DE&I training is an investment with a future payoff. To do this, you’ll need to gather as much data as possible.
How much does a diversity, equity and initiative cost?
DE&I initiatives tend to operate on a large scale. You’ll need to get the entire organization involved, from the top of the hierarchy to the bottom. Plus, you may need to implement structural changes in your existing people strategy.
Here are some of the major cost centers involved:
DE&I analysis
If you’re beginning a new DE&I initiative, you’ll start by studying your current state. This might mean hiring an outside consultant to gather objective feedback, plus the cost of running focus groups with past and current employees.
Process optimization
You’ll then need to review internal processes to ensure that they support your DE&I goals. For example, if employees say that your harassment policy isn’t fit for purpose, you’ll need to work with your HR team to develop a new policy.
Recruitment
Your hiring process is key to your success as an inclusive employer. You may need to upgrade your current recruitment strategy so that you’re more welcoming to minority candidates. You might also need to review your employer branding.
Salary benchmarking
If there are equity issues in your salary structure, you’ll need to address them. This may impact your overall spending on salaries, as you bring some workers up to wage parity.
Education
Training, mentoring, and education are often the most time-consuming elements of any DE&I initiative. You have to work with your current team to help overcome cultural obstacles to diversity and inclusion. That can take a lot of effort and patience.
Cultural initiatives
An inclusive culture can require some investment. You might organize seminars and events to promote DE&I, or create internal forums where people can talk openly about diversity issues that impact them.
All of these aspects of your DE&I initiative require an investment of resources. The question now is: what is your expected return on that investment?
What are the benefits of a diversity, equity and inclusion program?
DE&I initiatives can offer tangible benefits with a clear dollar value. Some of the costs you can look at include:
Reduced liability
Harassment issues can lead to expensive lawsuits. Wrongful termination settlements cost between $5,000 and $40,000 over half of the times, with 7% of cases settling for over $100,000. A diverse, inclusive culture should reduce the risk of litigation.
Lower compliance costs
The HR team spends many hours each year dealing with complaints. These complaints exist within a tangled compliance framework of local, state and federal laws. If you can reduce the number of complaints, you’ll reduce the associated compliance costs.
Greater availability of talent
A DE&I-first employer has an advantage, as they can attract people from a broad range of communities. This results in a lower overall Time to Hire for vacancies, which is currently around 45-50 days for in-demand roles.
Improved employee engagement
Only around 37% of employees say that they feel engaged in their work. A low rate of engagement can impact productivity, and ultimately hurt your retention rates. Multiple studies have shown that strong DE&I practices can help to drive up engagement levels.
Reduced employee turnover
Workplace hostility can cost you employees. Around 35% of Black professionals are considering leaving their job in the next two years, with many citing microaggressions as a factor in their decision.
Increased revenues
DE&I can impact your company’s business performance by unleashing creativity and helping you connect with diverse markets. Studies show that inclusive companies are typically twice as likely to exceed financial targets. Such companies are also eight times more likely to achieve better business outcomes.
You can build a strong case by pointing to real data from within your organization. For instance, you might pull figures on engagement metrics and staff turnover, or speak to the legal team about settlements.
Getting your DE&I initiative off the ground
If you can show that DE&I initiatives produce tangible benefits for companies, you will be able to build an irresistible argument.
It helps to have an expert that can help you build your case, plan your strategy, and get your initiative off the ground. Why not book a no-obligation consultation call with Helios HR today? Let's talk about how you can become a more diverse, equitable and inclusive employer.
