We’re ‘on the brink of a DEI backslide’: What does this mean for businesses?

2023 has seen a decline in diversity, equity, and inclusion (DEI) growth, with many workplaces falling behind in their policy.

According to the Diversity, Equity, and Inclusion Report 2023 from DDI, we are “on the brink of a DEI backslide”. A main contributor to this is a lack of trust and effective leadership, which is pushing workers away from organisations.

Compounding this is companies not delivering on DEI promises. According to DDI, in the last two years there has been an 18 per cent decrease in the number of leaders who endorse their businesses’ DEI efforts.

Kris Grant, ASPL Group chief executive, commented on the findings: “Despite public commitments from employers, women, migrants, older workers and persons with disabilities still face considerable disadvantages in the Australian labour market.”

According to Ms Grant, companies in Australia aren’t doing enough to promote strong diversity. Addressing gender pay gaps is one critical area that has seen neglect.

“Discrimination and entrenched social norms are still resulting in substantial labour market participation and wage gaps, with the gap between male and female wages in Australia is much wider than in many other OECD countries, including NZ, Italy, Spain and in Belgium, where wages are almost equal,” Ms Grant said.

DDI said that one effective way to promote inclusion is by encouraging flexible working. According to the report, ethnic and racial minorities feel more included when they’re allowed to work remotely.

However, leaders must still work to build strong relationships with remote workers. DDI listed the top three ways to do so as:

1. Fostering and maintaining a relationship that is built on trust.
2. Dedicating time to recognise team members’ success.
3. Encouraging team members to raise concerns and challenge the status quo.

Leaders who did this correctly had employees that were seven times more likely to report strong inclusion in their workplace.

Ms Grant agreed: “The federal government has set a good example, as we recently saw with the Australian Public Service (APS) agreeing to one the most generous WFH policies in the country, with no caps on WFH days.”

“This is a huge win for employees and will encourage greater workplace diversity by enabling, for example, women in caring roles to more easily maintain paid work and their careers and people with physical disabilities to work in an environment in which they are likely to be more comfortable and productive.”

Ms Grant noted that in Australia, the public sector is leading the charge in DEI, with the private sector lagging behind.

“While our public institutions are leading by example, many private companies and SMEs are not doing enough to encourage workplace diversity and inclusion,” Ms Grant said.

“Public policy should support companies and small- to medium-sized enterprises (SMEs), in their efforts to diversify their staff, for example, by providing concrete ‘how-to’ guides and even offer diversity consultants to achieve greater inclusion. Proactive communication about the rationale of diversity policies is not only important for firms but also on a public policy level, as it is essential to achieving equality of opportunity for all.”

The benefits of effective DEI policy are significant. DDI highlighted some of the top benefits:

• 11 times more likely to have high-quality leaders overall
• 10 times more likely to have a strong leadership bench
• four times more likely to have leaders who understand and act on changing customer needs and perspectives
• 3.2 times more likely to engage and retain top talent
• 2.4 times more likely to outperform peers financially

“Different perspectives and experiences can cultivate a culture where new ideas can surface and greater understanding of others is achieved,” explained Ms Grant

“Strategies to promote inclusion can also strengthen trust in employers by demonstrating their commitment to values such as fairness and equality. This may increase employees’ engagement in the workplace, leading to greater efficiency and staff retention.”