Reaffirming DEI Investment: Why It’s Critical During Turbulent Times

The corporate layoffs that have impacted technology, consumer discretionary and financial companies in 2023 are gutting diversity, equity and inclusion (DEI) departments and could threaten companies’ efforts to increase underrepresented groups in their ranks and in leadership roles.

The urgency to navigate immense financial pressure can overshadow the long-term advantages of cultivating a diverse and inclusive workforce.

However, reduced investment in DEI programs results in reduced employee experiences of inclusion, according to BCG’s BLISS Index, a comprehensive and statistically rigorous tool that identifies factors that influence feelings of inclusion in the workplace.

Corporate investment in comprehensive DEI and employee-centric programming offers significant long-term value and is a powerful catalyst that drives employee satisfaction, boosts retention and builds stronger business outcomes, according to BCG’s BLISS Index. Companies that heavily invest in DEI programs have a 31% higher impact on making workers feel included than companies who invest less.

Gabrielle Novacek, a Managing Director and Partner at BCG, stresses the urgency for organizations to continue prioritizing the day-to-day employee experiences and workplace culture they foster within their companies. In addition to DEI programs, organizations should also focus on integrating inclusive behaviors and interactions into their everyday work practices.

“Effective DEI initiatives have a transformative, cascading effect within organizations,” says Novacek. “Investing in these day-to-day interactions can yield powerful results and significantly impact the environment that leaders create every single day when people come to work.”

BCG’s BLISS Index shows that cutting DEI resources can have a significant negative impact on business and culture, leading to increased turnover and lower employee satisfaction.

The solution lies in maintaining investments in DEI programs and policies, such as anti-discrimination and anti-harassment policies, paid parental leave, diversification of leadership teams and tracking of DEI metrics. This approach has a proven track record of fostering company growth and yielding tangible benefits through a more engaged workforce, a stronger reputation and increased employee retention.

Investing in DEI should continue to be a top priority for organizations looking to gain a competitive edge in today’s global business landscape. Reinforcing positive workplace behaviors helps to optimize DEI initiatives.

Organizations simply can’t afford to ignore the importance of DEI investment. To make substantial progress in DEI, BCG’s BLISS Index has identified three critical steps that leaders should take:

1. Allocate resources strategically: Despite financial pressures, leaders should make strategic decisions to prioritize investments to create comprehensive, employee-centric packages. The long-term benefits of employee satisfaction and retention and their positive effect on innovation and growth can help guide these decisions.
2. Share the business case for DEI: Leaders need to clearly communicate the business case for DEI to stakeholders. By highlighting the positive impact on employee retention and market competitiveness, leaders can build support for sustained DEI investments.
3. Build an inclusive workplace culture: Organizations should focus on creating a workplace culture that values and respects all employees. This includes building a culture where employees feel safe to make mistakes and be their authentic selves, which can be achieved by fostering diverse and equitable hiring, providing opportunities for advancement, regularly tracking retention rates and proactively examining any hiring disparities.

“Investing in DEI allows leaders to attract better talent, retain employees longer, generate more creativity, and deliver greater long-term results,” says Christoph Schweizer - CEO, Boston Consulting Group.