Unlocking the Business Case for DEI: Maximizing ROI, Engagement, and Innovation

Anthony Santa Maria

Anthony Santa Maria

The “business case” for DEI is, and probably always will be, a hot-button topic. Despite proof that there is a direct relationship between DEI, innovation, and financial results, business leaders are still not giving DEI the investment it deserves. 

In 2021, the Washington Post asked U.S. companies, which had promised a total of $49.5 billion to diversity programs, how much they actually spent. It received responses confirming less than 4% of that amount — $1.7 billion.

Business leaders often forget that people programs solve a pressing business issue. And one that long predates the pandemic and hybrid work: when employees don’t feel a sense of belonging at work, they check out. They don’t learn, they don’t contribute, they don’t stay. 

The cost associated with attrition is enormous — today, it’s nearly $350 billion a year! And a big share of that cost is directly related to a lack of inclusion and belonging. Sixty percent of employees who left their companies in the last year did so because of a lack of inclusion and belonging. 

Breaking down the business case for DEI

At Praxis, we get this question from our partners every day. What’s the business case for DEI? What’s the ROI? We love this question. Because when companies launch DEI programs with intention, the results speak for themselves.

To confront the ROI question head-on, Praxis called on our in-house experts to discuss the latest trends in DEI, ways to maximize ROI, and proven methods for improving employee engagement and experience. 

In our most recent webinar, called “Proving the Value of DEI Training: Measuring Impact and ROI,” Dr. Olivia Holmes (Curriculum Measurement Lead) and Sabrina Rønningen (Head of Client Impact) draw on a wealth of experiences working with Fortune 500 clients to show what DEI success looks like.

“The typical assumption is that having diverse employees means, inherently, that you’re able to capture more market share and perhaps expand productivity. This is true, but we’ve found it’s an incomplete narrative. What really does work is focusing on those levers that drive inclusion, belonging, and engagement.”

The answer to unlocking those levers, Rønningen explains, is data.

“When businesses have the appropriate data to know how and where to focus action, companies see increased success and innovation,” she explained.

Looking at recent data on what’s motivating DEI performance today, Praxis’s team identified the following trends:

More cross-functional partnerships

“Talent leadership is starting to take new shape, becoming more cross-functional. DEI departments are working closer with L&D, realizing that it really takes a cohesive effort” said Rønningen.

With 83% of organizations looking to build a more people-centric culture this year, and human skills singled out as a key priority for L&D teams, cross-functional departments are a must.

“We can’t expect to keep doing the same things every year, the same type and nature of programming and skills development, and expect a different result. Working across functional leadership within the talent team is a key takeaway,” said Rønningen. 

Be clear about what your business is trying to accomplish with learning

“Make sure you’re crystal clear from the start of every learning program how you’re connecting learning to the business,” said Rønningen. 

This ensures employees don’t feel their time is being wasted or that their learning is happening in a silo. Learning needs to be contextually relevant and be directly applied to employees’ day-to-day. Dr. Holmes recommends narrowing the focus of impact measurement to acquired competencies (or skills learned) and knowledge retention. 

Tracking skills gained alongside productivity and culture surveys directly show how your programs led to company success. 

Embrace the latest tech — or get left behind

Don’t be afraid to embrace the latest tech when upskilling your teams. Immersive L&D solutions increase confidence in skills application by 275%. This is because they’re designed to capitalize on knowledge and research about how people learn. When learning is done well, companies see positive results. 

“With one of Praxis’s clients, a Fortune 100 company, we saw that employees were +15% less likely to look for alternative jobs and +8% more motivated,” said Ronningen.

The changes in behaviors are also telling — “One of our earliest clients, a Fortune 500 Tech company, saw that even 8 months after training, over half of employees noticed changes at all levels of their org, including management and leadership” said Rønningen.

Partner for success

In the past decade, we’ve seen work spill beyond the office and become not just an extension of, but a primary expression of, our values and identities. In order to sync our work with those values — inclusivity and equity chief among them — we need to focus on our behavior and how it promotes (or inhibits) collaboration. This is true both within an organization’s teams and its external partnerships.

For many organizations looking to improve L&D, DEI and engagement, partnering with outside experts is the right choice. They have the resources and expertise to design and implement a forward-looking solution for the company. That frees up time for company leaders to focus on managing the day-to-day. And they can adapt the approach to stay up-to-date with the latest trends. This approach minimizes stress and maximizes results.

According to a report by McKinsey & Company, companies with DEI training see increased employee satisfaction and outcompeted their competitors by 36%.

“Recognize and settle into great partnerships and integrate them into that role you have,” recommended Rønningen.

Real change takes time

Creating a vibrant, inclusive company culture takes time. But prioritizing your people’s learning and development will generate trust and goodwill fast.  

“One of the best ways to support behavior change is to build knowledge, skills, and practice to help people deeply understand how to collaborate and work across differences, and to inspire psychological safety. This is the only way to inspire peak performance across teams” said Rønningen. 

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