Diversity, equity and inclusion (DEI) refers to practices and policies intended to support people who come from varying backgrounds and give them the resources they need to thrive in the workplace. DEI frameworks take into account factors like race, gender and sexual orientation, so teams can find ways to help employees from marginalized groups succeed.
What Is Diversity, Equity and Inclusion (DEI)?
Diversity, equity and inclusion (DEI) is a concept and practice used by organizations to recognize and value differences among people, ensure fair opportunities for everyone and foster a work environment where all feel welcomed and respected.
What Is Diversity, Equity and Inclusion (DEI)?
DEI (sometimes referred to DE&I or IE&D) stands for diversity, equity and inclusion. As a discipline, DEI is any policy or set of initiatives designed to make people of various backgrounds feel welcome and ensure they have support to perform to the fullest of their abilities in the workplace.
“We as employers need to make sure we’re including these individuals and that we’re giving them equity,” said Catalina Colman, former director of HR and inclusion at Built In. “We need to make sure that, not only do they have a job, but they have the same ability to get promoted, to contribute and have the same impact — in the world and in the workplace — as their peers.”
This kind of environment is created by following all three aspects of DEI:
Diversity
Diversity is the presence of differences within a given setting. In the workplace, that can mean differences in race, ethnicity, gender, gender identity, sexual orientation, age and socioeconomic class. It can also refer to differences in physical ability, veteran status, whether or not you have kids — all of those are components of diversity.
Why Diversity Matters
Diversity in the workplace is important because with different backgrounds come different points of view, which ultimately leads to better ideas and solutions.
“From a business standpoint, different perspectives directly influence a product — how it’s made, who it serves, how it functions and so on,” Colman said. “More perspectives make for a better product.” People from different backgrounds with varying life experiences will be able to provide new perspectives that help refine and enhance processes.
“The more diverse voices there are in your organization, the better your outcomes will be, purely from a business standpoint,” Colman said.
Even so, Colman urges employers to look beyond the business case: “I believe that if we give people the equitable opportunity to not only be employed, but to have employment with purpose and passion, our society can and will do great things. It’s a measurable good for everyone.”
Equity
Equity is the process of ensuring that practices and programs are impartial, fair and provide equal possible outcomes for every individual.
Why Equity Matters
In order to ensure equal circumstances for all individuals across the organization, equity requires that employers recognize barriers and advantages. This is the crucial difference between “equity” and “equality.”
“Equity takes into account the fact that not everybody is starting at the same level,” explained Colman. “Take home ownership, for example. A bank can make the statement that the loan application process is equal and that they will not discriminate based on race, gender or ethnicity. That doesn’t take into account student loans, familial debt, socioeconomic status.”
These limitations are what define barriers and give rise to advantages, ultimately leading to an inequitable process. Inequity permeates every aspect of your business, requiring vigilance and swift action. “You’re not going to be able to build diversity if you’re not taking the steps to be more equitable,” Colman said.
Companies that establish equitable environments not only support diverse workforces, but also incentivize employees to invest more energy and passion into their positions. “Equity is why we go to work,” explained Colman. “We want to get compensated fairly for our work, we want to be challenged, to learn and to contribute. People often choose an employer based on those things, which boil down to equity.”
Inclusion
Inclusion is the practice of ensuring that people feel a sense of belonging in the workplace. This means that every employee feels comfortable and supported by the organization when it comes to being their authentic selves.
Why Inclusion Matters
While the workplace does require professionalism and etiquette, an inclusive culture should not bar individuals from being themselves.
“Employees should not worry about code-switching or shielding part of their identity,” Colman said. “They should be able to walk through the door without feeling like something about them has to change.”
Inclusion is what maintains diversity. Without it, employees will simply leave the organization. “If a candidate walks into a workplace and they’re the only woman or BIPOC employee, they’re going to question the employer’s authenticity and values,” Colman said.
“People want to belong, plain and simple,” she added. “And marginalized individuals want to know that they’re not going to be the token person to represent a demographic. They shouldn’t have to worry about that in the workplace; they should be focused on how they’re going to have an impact within the company.”
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Why DEI Is Important: Benefits of Diversity, Equity and Inclusion
DEI is vital to creating and maintaining a successful workplace, one founded on the principle that all people can thrive personally and professionally. Bringing together people of various backgrounds leads to new and creative ideas. More importantly, a DEI strategy contributes to a space where all employees feel they have intrinsic worth, not in spite of their differences but because of their differences.
Below are a few more benefits businesses can enjoy upon embracing a DEI approach.
1. Strengthened Recruitment
DEI has grown in popularity among candidates and employees. In fact, three-fourths of job seekers and employees treat DEI as a major factor when weighing job offers and companies. Candidates recognize the positive effects of an environment that welcomes a range of backgrounds and want to join this kind of space.
However, employees aren’t the only ones who should be pushing for more diverse and inclusive cultures. Company leaders must also make the effort to implement DEI policies, and there are plenty of incentives for businesses to get started as soon as possible.
2. Higher Employee Retention
Once candidates join an organization, DEI can also play a role in convincing them to stick around. Feelings of inclusion make up as much as 35 percent of an employee’s emotional connection to their work and 20 percent of their wanting to remain with their current employer. Companies that take steps to cultivate a diverse, equitable and inclusive workplace can then reduce employee turnover and enjoy a more stable workforce through the years.
3. More Innovation
A Harvard Business Review survey of 79 large companies found that a 0.1-point increase in a company’s DEI ratings correlates to a 13-percent increase in that company’s ability to change. When companies construct inclusive teams, employees from diverse backgrounds can offer different ideas and perspectives. This makes it easier to solve problems, develop unorthodox approaches and craft creative solutions to help companies adapt on the fly.
4. Deeper Trust
Trust hinges on leadership building genuine relationships with employees, and DEI is a key component of this process. When companies make DEI commitments and don’t follow through, 40 percent of workers would think about leaving and 56 percent would no longer recommend their employer as a place to work.
Organizations that recruit diverse talent must execute DEI initiatives to make employees of different backgrounds feel respected and safe in the workplace. If businesses neglect their DEI commitments, employees of marginalized backgrounds may believe the company doesn’t care about them and lose the trust they once had in organizational leadership.
5. Improved Business Outcomes
Companies that listen to DEI advocates’ demands and make changes can benefit from a diverse and inclusive culture as well.
According to Forbes, increasing female partners’ shares by 10 percent often leads to a 10 percent rise in revenue. In addition, firms that display culturally and ethnically diverse executive teams are 33 percent more likely to lead their industries in profitability. When people feel welcomed for who they are, they perform at a higher level. It’s a win-win situation for everyone when companies take steps to diversify their workforces.
If your industry is ever going to be a place where innovation and ingenuity thrive, diversity, equity and inclusion have to take center stage. Employers must actively work to create meaningful change in spite of the history of injustice that has marginalized underrepresented groups within the workplace. This work is often spearheaded by HR departments.
HR’s Role in Implementing a DEI Strategy and Culture
For employers and people management professionals alike, the biggest challenge is knowing where to start.
“There’s no quick fix,” Colman said. “A lot of people immediately jump to figure out how they can make their company more diverse, but you can’t underestimate the importance of inclusion and equity. Without those two pieces, you’re not going to achieve true diversity.”
Understanding how each element of DEI builds upon the others is important to creating a work environment that is equitable and inclusive of all individuals. Just like DEI is a multifaceted process, Colman encourages employers to lean on each other.
“It’s not going to be a single HR person that addresses the issue of DEI for a company,” she added. “Lean on your professional community. You’re not going to be able to have all the answers because you don’t have all the perspectives.”
The focus on DEI has prompted a huge shift for HR. “I think the mindset has always been to avoid talking about these things,” Colman said. “We typically put them in the handbook and address them in training maybe once a year. We didn’t want to make people uncomfortable. I think right now, the call to action is about understanding how to navigate that discomfort and how to use that to elevate your workforce. It’s about doing the important work that is long overdue and becoming inclusive and equitable.”
Backlash Against DEI Initiatives
Large-scale, formalized efforts to make workplaces more inclusive date back to the passing of the Civil Rights Act of 1964, barring employment discrimination based on a range of protected characteristics. But many companies significantly increased their investment in DEI programs following demonstrations across the United States in 2020 against police brutality and systemic discrimination toward Black Americans.
In 2021, Joe Biden’s incoming presidential administration followed suit with a number of initiatives aiming to promote DEI within the federal workforce, including requirements that agencies assess their current DEI efforts and make strategic plans to improve them; create staff positions dedicated to advancing diversity, equity and inclusion; bolster demographic data collection efforts for the federal workforce; do more recruiting from colleges and universities serving underrepresented populations; and improve accessibility for federal employees with disabilities.
In many cases, this heightened focus on inclusion was short-lived. By 2024, the final year of the Biden administration, many companies were already scaling back their DEI investments — some quietly, others less so — and criticism of DEI had become a mainstay among conservative politicians and business leaders.
Donald Trump made ending federal DEI initiatives a top priority on the very first day of his second presidential term, referring to them as “illegal and immoral discrimination programs” and placing federal DEI workers on administrative leave while working to dismantle the programs.
That same week in January 2025, Trump issued an executive order that revoked Executive Order 11246 — known as Equal Employment Opportunity — which prohibited U.S. federal contractors and federally-assisted construction contractors and subcontractors from discriminating in employment decisions based on race, color, religion, sex, sexual orientation, gender identity or national origin. Executive Order 11246 was revoked alongside Executive Order 12898, Executive Order 13583 and Executive Order 13672, in an effort to “restore merit-based opportunity” and to “combat illegal private-sector DEI preferences, mandates, policies, programs, and activities.”
Trump’s January 2025 executive order asserts that private-sector DEI initiatives violate the Civil Rights Act of 1964 by promoting discrimination, and suggested the government might take legal action against companies and organizations deemed to be “DEI practitioners.” Days later, prominent tech companies like Google announced that they were scrapping their DEI hiring initiatives in an effort to comply with the various new Trump administration rules for government contractors.
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Frequently Asked Questions
What is DEI in the workplace?
DEI stands for diversity, equity and inclusion. It is based on the idea that recruiting and supporting workers of various backgrounds is integral to a company’s success, and encompasses policies and initiatives designed to help all employees feel welcomed and equipped to perform their jobs at a high level.
What is an example of DEI in the workplace?
Intentionally recruiting workers of marginalized backgrounds, hosting DEI workshops and training sessions and offering mentorship and support to employees of diverse backgrounds are a few examples of DEI in the workplace.
Why is DEI important?
DEI is important because it contributes to an environment where all employees, regardless of background, have fair opportunities to pursue work they’re passionate about while getting to be themselves in the workplace. By bringing in diverse perspectives, organizations also create a space where multiple voices are heard and innovation can flourish.
Why is there a backlash against DEI?
Not everyone agrees that DEI (diversity, equity and inclusion) initiatives are good for workplaces, which has resulted in backlash. Some argue that DEI policies cost too much to implement or are ineffective. Others worry that DEI initiatives lead to poor hiring decisions or even discrimination against people who aren’t from underrepresented groups.
