Upholding diversity, equity and inclusion for good 

In 2023, DEI ranked third among organizations’ priorities — the highest it’s ever been. That push continues in many regions, from EU directives on gender equity and pay transparency, to extended family leave in some countries. And despite the US Supreme Court ruling against race-conscious college admissions, many firms are still building a diverse and inclusive workforce. Yet change doesn’t come overnight.

Even with these activities and their impacts (caregivers in 2022 felt more engaged than ever before), companies with less-mature DEI programs have pulled back on their investments. Layoffs, budget cuts and a lack of corporate buy-in have fueled burnout, faster attrition and abandoned initiatives. And since employee preferences can vary by age, race and gender, foregoing a DEI lens could harm retention in the long run. It’s essential to restore and uphold these programs to make the most of the employee experience (EX), flexible working and modern technology.

Upholding and reinvesting in DEI isn’t just a good look; it’s good work and good business. Firms that invest in DEI are better positioned to attract and retain Gen Z workers, among others, who value inclusion and expect their employers to follow suit. Companies with mature DEI programs also tend to surpass those without in terms of speed to market, market share and exceeding expected revenue. What’s more, businesses with DEI teams report higher employee satisfaction — which has been shown to boost productivity by 13%. DEI teams can foster that satisfaction by improving EX. 

Employee experience (EX) is the intersection of an employee’s expectations, their environment and events that shape their journey. Designing EX is about ensuring the work environment meets employee expectations in the moments that matter. Much of this varies by dimensions of diversity, like gender and other demographics, and an intersectionality between them.

EX often looks vastly different between men and women. Compared to men, women’s sense of safety and well-being at work tends to be much lower. According to Mercer’s Global Talent Trends 2022–2023 report:

• Women (57%) are less likely to feel energized than men (69%).
• Women (50%) are less likely than men (60%) to feel their workplace is healthy.
• Men (73%) feel more empowered than women (63%) to take time off from work.
• Compared to women (61%), men (71%) place more trust in their firm to help with surprise expenses.
• Women (29%) tend to feel less financially secure than men (38%), now and in the future.

Beyond their health and safety, women also tend to report lower career satisfaction and support on multiple fronts:

• 58% feel less likely than men (67%) to thrive in their current role/organization.
• 66% think that it’s easy to sign up for internal gigs, compared to 75% of men.
• Just 40% are likely to dedicate more time to work, compared to 52% of their male colleagues.
• More men (72%) than women (62%) expect career support for those close to retirement.

Of course, EX varies by other dimensions as well. Mercer’s Inside Employees’ Minds 2022 study tells us that:

• In the US, Black employees’ sense of belonging increased by 8% year over year.
• Hispanic and Latino workers in the US reported major declines in balance and satisfaction.
• UK workers of Asian descent felt more motivated, but less likely to advance, than colleagues.
• LGBTQ+ employees in the UK feel much more stressed and exhausted than other workers.
• Canadian workers aged 25–44 tend to want work remotely, while those ages 55+ prefer the office.

So, why are some employee groups less likely to thrive at work? And how can employers address the issue? Given the market and retention issues that firms face today, DEI teams can (and should) help answer these questions — but embedding DEI into the EX and the employee value proposition is a firm-wide endeavor. In our experience, successfully driving change requires a focus on change and culture, as well as equity across pay, careers and EX.

Pay equity and transparency are crucial components of an EX that works for everyone. And while employers in certain geographies now face mandates around these issues, it’s also true that fair and clear compensation practices can help attract more high-potential workers from a much wider talent pool.

Conducting a pay equity analysis is not only a smart way to move forward. It’s a big step toward practices and policies that foster career equity — a broader push for DEI and environmental, social and governance (ESG) ambitions that uplift the employee experience.

And, fuel a positive employee experience in the moments that matter — from the exciting times like marriage, homebuying and having children, to the painful times like illness and bereavement.

Flexibility is a key piece of EX design. After years of remote work and asynchronous hours, many employees have come to expect a better work–life balance. Yet today, organizations are rethinking those flexible work policies and bringing people back to the office.

To be sure, the COVID-era work models were not serving everyone. Many jobs are time- and location-dependent. And in a noisy one-bedroom apartment, the work-from-home dream can feel more like a nightmare. Men and women have different takes on flexible working, too, according to Global Talent Trends 2022–2023:

• More men (52%) than women (40%) feel they work fewer hours when remote.
• Men (67%) are more likely than women (57%) to only join or stay with employers that offer hybrid/remote work.
• Women (38%) are less likely than men (48%) to feel connected to coworkers when working remotely.
• Men are more likely to associate productivity (67%) and creativity/co-creation (69%) with in-office versus remote work, compared to women (53% and 60%, respectively).

Despite these differences, both men and women prefer flexible work arrangements. Only 10% want to come back to the office full-time, and there’s no gender difference in UK worker satisfaction with flexible work. Still, females in the UK prefer the flexible hours, ad-hoc time off and remote work more than males, while UK men place more value on the ability to choose shifts and work part-time.

DEI teams can help fine-tune flexible work policies to be more inclusive. To account for the nuances among different employee groups, it’s important to consider all six dimensions of flexible work:

ChatGPT came online in late 2022, a season of layoffs and slow economic growth. Unsurprisingly, much of the dialogue around generative AI (GAI) quickly homed in on two potential benefits: productivity and efficiency. But if organizations continue to cut DEI programs in parallel, the risks of emerging technologies could soon outweigh the rewards.

For example, we continue to see how AI models more broadly can perpetuate the biases in their algorithms and training data:

• AI in recruiting can analyze, engage and select candidates based on criteria that excludes people from marginalized groups.
• Some early users got ChatGPT to suggest that race and gender should determine career aptitude.
• AI models can train on potentially biased company data, like performance reviews, and produce outputs that reflect those biases — e.g., assigning lower scores to employees from historically marginalized groups.

Another issue is the digital divide — unequal access, training and opportunities around these new technologies. Without guardrails, the digital divide can further widen the gap between the haves and the have-nots. DEI should be built into the digital transformation process so that every workforce segment can benefit.

As the workforce grows more diverse, DEI will continue to be a competitive edge for organizations. If your company appeals to only one population, but there’s a talent gap you need to close, approaching the problem though a DEI lens can help. It’s time to develop an inclusive employee value proposition that resonates with the whole working population — talent that reflects the full scope of human diversity in terms of race, ethnicity, culture, age, socioeconomic status, gender identity, sexual orientation, cognitive and physical ability, visible and invisible disability, work history, lifestyle, religion and more.

To that end, many talent-conscious firms are pledging to follow the Good Work Framework, a set of sustainable people strategies — including DEI, fair pay and transparency — outlined by the World Economic Forum. But as companies continue to scale back resources, we’ve yet to see if they can deliver on these and other public commitments — even when it seems no one is watching.

As a leader in people strategy consulting, Mercer continues to gauge and optimize the impact of DEI resourcing on brands and businesses. Contact a consultant to learn more or let us know if you’ve made changes that make a difference.