Why DEI Initiatives Are Important

Diversity matters with photo of diverse team smiling

So, why are diversity, equity, and inclusion (DEI) initiatives important? And what is the return on investment (ROI) of DE&I?

Good news! There are many ways to measure the value of diversity, equity, and inclusion initiatives. Bad news: it’s not easy to find accurate, comprehensive metrics for calculating the overall effectiveness of your DEI program. That’s  particularly true when you’re measuring outcomes related to change management and cultural transformation.

That’s likely to change over the next few years, as more companies make DEI initiatives a core part of their business strategy. In the meantime, here we’ll look at a few key metrics you can use to measure the effectiveness of your DEI program.

ROI of DEI initiatives

To determine the ROI of DEI initiatives, you need to measure both business outcomes and employee perceptions. Here are a few metrics to measure each. You can find more HR metrics here.

  • Business outcomes
  • Leadership-oriented measures:
  • Increase in revenue/profitability
  • Decrease in costs/over  haul
  • Customer or member satisfaction ratings
  • Bottom-line-oriented measures:
  • Cost-saving or -creating innovation
  • Improvement in process efficiency
  • Human-oriented measures:
  • Employee satisfaction ratings
  • Retention rates
  • Voluntary turnover rates
  • Perception-oriented measures:
  • Volunteer rates (when compared to industry norms)
  • D&I-related surveys (e.g. employee feedback on diversity initiatives)
  • Measurement challenges

Measuring the impact of DEI initiatives is challenging, but not impossible.

Keeping track of data is important for understanding the diversity of your workforce, seeing how your DEI efforts are doing over time, and measuring how your organization's DEI status compares to others in your industry.

Fortunately, there are solutions for many of these problems. For example, you can improve the validity and reliability of diversity data by standardizing how you collect it.

Over time, all these efforts should result in accurate, consistent data that can be used to:

  • Show the need for DEI programs
  • Demonstrate the impact  of initiatives and efforts
  • Show the need for greater investment

To do that, you’ll need to measure both business outcomes and employee perceptions.

  • Build a case for DEI investment
  • How to build a case for DEI investment

When trying to build a case for DEI investment, you’ll run into several common objections. This is primarily because diversity initiatives cost money but don’t generate revenue, at least not in the immediate term.

Before you can generate revenue from your diversity initiatives, you need to first spend money on implementing and nurturing them. These initial costs are usually a hindrance to investment, but a good ROI story can help overcome resistance.

Use statistics from leading companies to state your case if you don't have your own first-party data to back up your initiative. For example, companies with above-average gender and racial/ethnic diversity in leadership roles are eight times more likely to be in the top 10% of organizations for financial performance (DDI, 2020).

Co-create your DEI initiative with your team and leadership

This will require you to operationalize a culture of authentic collaboration by building trust with leadership and your team, as well as using your HR data to determine important DEI metrics with your people analytics journey.

What is DE&IAB? DEI can encompass accessibility and belonging (DEIAB)

  • DEIAB (Diversity, equity, inclusion, accessibility, and belonging)- Leadership and especially HR teams must make an attempt to focus on DEIAB, and creating an environment that operates on these principles.
    • Diversity is the presence of difference. Who is here? 
    • Equity is the fair and just treatment for all. Whose needs are met?
    • Inclusion is encouraging and embracing difference. Who is heard?
    • Accessibility is Openness to all. Who can participate?
    • Belonging is the identification with a community. Who feels welcome?


JEDI (Justice, Equity, Diversity, and Inclusion) - JEDI is an acronym for inclusivity in the workplace. It focuses on justice, equity, diversity, and inclusion, ensuring that everyone is treated fairly and comfortable, with no discrimination. 

Often times, DEI programs make an attempt to address this, but not comprehensively.

Posted on October 21, 2022 in ,

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