Since the pandemic, employees have had more choices on where to work. With this, employees are more selective with the companies that they work for. Many employees are focused on working for ethical companies that share their values. With diversity, equity, and inclusion (DEI) being a prevalent topic, one new employee is curious to see if DEI could play a role in employee retention, if other companies have found success through incorporating DEI, and how to create a diverse and inclusive work environment.
This case describes the high turnover that companies in the United States are experiencing post-pandemic. Companies have taken strides to make themselves more attractive to workers, such as offering a pay increase and bonuses. Despite their efforts, companies are still struggling since most competitors are also incentivizing potential employees in the same way. With the structure of the job market and so many companies being understaffed, job seekers are being selective with where they want to work. This selectiveness goes beyond financial motives; many employees are focused on working for ethical companies that share their values.
Background
FreshMart, a food retailer, has noticed that the Covid pandemic has increased employee turnover and made it difficult to recruit new employees. FreshMart has tried to incentivize its employees, as well as potential employees, with an increased pay and starting bonus. Despite the company’s efforts, employees continuously leave. The frequent turnover and understaffed locations have led to financial loss, low employee morale, and customer dissatisfaction. The company held a meeting to discuss retention efforts and reasons for employee turnover.
Throughout the meeting, it was noted that ethical companies and companies that prioritize DEI are more sought after. Finding this idea interesting, the company decided to investigate this option. FreshMart wants to find out how DEI initiatives could be beneficial in terms of business and retention. The company also wants to figure out what policies or initiatives could be implemented to make their company more diverse, equitable, and inclusive. FreshMart assigns their new employee, Sara, to this task.
Sara pulled data and read reports to have adequate background knowledge on DEI. In order to understand how DEI could contribute to increasing employee retention and recruitment, a basic understanding of the situation is important.
DEI
Background Information on DEI
Diversity is the presence of differences within a given setting. These differences include race, ethnicity, gender, sexual orientation, religious beliefs, disabilities, and socioeconomic status. While these are the most commonly discussed, these are not the only components of diversity that exist. It is important to be aware when talking about diversity that workplace diversity is viewed differently by generations. Younger generations, like millennials, consider workplace diversity as having multiple backgrounds or creating change (Mondal, 2020). Older generations view workplace diversity as equal and fair representation (Mondal, 2020). Younger generations tend to value what diverse perspectives bring, while older generations are more concerned with having diverse representation. In short, baby boomers and Gen X believe that bringing in diverse individuals is important, while millennials and Gen Z do not view that to be enough and desire inclusion.
Equity is the act of ensuring that processes and programs are impartial and fair, and provide equal possible outcomes for every individual (Mondal, 2020). Equity strives to create fair treatment and equal access to opportunities. A large part of equity is learning about the inequities and barriers that different individuals face and taking steps to remove these barriers. A common misconception of equity is that individuals are being given special privileges and that favoritism is at play. When equity is occurring, resources are being given in order to eliminate barriers and create equality. As opposed to providing equal resources for all, equity focuses on creating an even playing field to ensure equal access.
With experts noticing that women and people of color have higher rates of turnover compared to their white counterparts, it has become more evident that solely hiring people from diverse backgrounds is not enough to make an environment that is meaningfully diverse (Creary et al., 2021). Inclusion builds a workplace environment that is collaborative and respectful, where everyone feels welcome and invited to contribute. Individuals feel not only welcome, but comfortable in being their authentic selves. Inclusion is a practice and something that is continuously being done to let people know they are supported. When an inclusive environment is created, all differences are embraced and individuals have a sense of belonging within the organization. For an organization to have an inclusive culture, employees must feel respected both on personal and professional levels. This includes equitable access for opportunities, fair wages, and good working conditions (World Economic Forum, 2020).
Employees should be able to share their opinions without fear of backlash or judgment. Unique contributions should be appreciated and acknowledged. Overall, inclusive environments allow for employees to feel a true, authentic sense of belonging that is empowered. Inclusive environments also allow individuals to feel comfortable participating and sharing their viewpoints. To create an inclusive culture, both policy and individuals are focused on eliminating discrimination and intolerance (Rosencrance, 2021). While organizational goals can be helpful, management must enforce them on personal levels. This includes making spaces for underrepresented voices, establishing inclusive language guidelines, and ensuring employees have access to the resources best suited for them.
DEI Policies and Initiatives
Several companies have successfully implemented DEI policies and initiatives. It is important to consider that success for DEI initiatives and policies varies based on several factors, and that companies should have a good understanding of their workforce to know what will work best. The companies highlighted below have done a good job in creating a welcoming work environment through DEI initiatives.
CarMax has established a Diversity and Inclusion Council composed of company leaders with various personal and professional backgrounds. The council focuses on overseeing three major areas of focus: communication and education, leadership and development, and associate experience. The first area, communication and education, primarily focuses on reinforcing the company’s commitment to diversity and inclusion using unconscious bias and diversity training. Leadership and development consists of several efforts, all with the goal of building a workforce that “reflects the communities that we serve” (Carmax, n.d.). Specifically, the council promotes activities such as development programs and recruitment practices that develop diverse leaders. The council’s third area of focus is associate experience. CarMax and the council want to ensure that the associates feel that the company is aligned with their values. Through communication channels, such as surveys, they review feedback and use it in a proactive manner to improve their employees’ experience.
Farmers Insurance is another company that has established employee resource groups. These groups are voluntary and led by employees, with the goal of supporting employees’ growth in both professional and personal capacities. Examples of employee resource groups are the Black professionals alliance, disability inclusion group, LGBT+ alliance, Asian alliance, and alliances for cultural diversity. These organizations can help to bring employees together and create a community where individuals feel supported and celebrated. These groups have brought employees together, helped employees develop in their careers, and offered them the opportunity to volunteer for great causes.
Liberty Mutual has created a multiyear plan that includes diversity plans and initiatives that align with their goals. The company has set goals, such as having more representation for women and people of color, and when they would like to achieve these goals. The company has also stated that they are working on having more minoritized groups in managerial and higher level positions. Liberty Mutual constantly evaluates themselves to see how they can improve in areas of DEI. The company has received many awards for being one of the top companies for women, LGBT+ and diversity.
Slack has implemented several initiatives with the goal of ensuring that their diverse talent are celebrated and have equal opportunities. They have a diversity, engagement, and belonging (DEB) program that focuses on developing their employees to help them thrive through education and various opportunities. Another program Slack offers is the Rising Tides program: “Rising Tides is a six-month sponsorship program for a talented and diverse group of high performers and emerging leaders at Slack who have historically lacked access to this support” (Fluker, 2021). The participants receive various benefits, such as career development training, coaching, and one-on-one sponsorship with an executive Slack team member.
DEI in Business
The benefits of incorporating DEI into the work environment can bring business multifaceted success. With 67% of individuals looking for a job listing diversity as a top priority, companies with a commitment to diversity attract top talent (Mondal, 2020). As stated earlier, people want to work for ethical companies and companies that are prioritizing their DEI efforts. Therefore, companies that have made these steps receive a wider candidate pool and have a larger selection to choose from. A company that is composed of top talent and individuals with diverse backgrounds and experiences has many strengths. The different perspectives that come with a diverse team of people lead to fresh ideas. A study conducted by the Victorian Equal Opportunity and Human Rights Commission and Deloitte showed that when employees felt included in the workplace, employee innovation increased by 83% and employees were better able to respond to customer needs (Turner & Fischhoff, 2021).
There are also financial incentives that come from implementing DEI. Companies with diverse leadership teams have 45% higher innovation revenue than those that do not. There are even benefits on a global economic scale. In 2015, women generated 37% of GDP despite making up 50% of the global working age population. If women were to close the gap and generate that 50%, USD 28 trillion could be added to GDP (Woetzel et al., 2015). A study conducted by McKinsey & Company looked at the performance of companies with different levels of workplace diversity. The study found that organizations with more racial and gender diversity bring in more sales revenue, more customers, and higher profit (Hunt et al., 2018).
DEI in Recruitment and Retention
At 67%, most job seekers have diversity as a top priority (Mondal, 2020). People drive businesses now, and people want to work in diverse, equitable, and inclusive environments; thus, companies prioritizing diversity will stand out to candidates and broaden the talent pool of prospective employees (Reynolds, 2019). Companies that have incorporated DEI into their culture recruit more and attract top talent.
These companies not only recruit more employees, but they can also retain them. It has been proven that diversity improves retention and reduces the costs associated with employee turnover (Reynolds, 2019). There are over 2 million Americans who leave their jobs because of discrimination. Organizations that prioritize DEI face less workplace discrimination, and as a result, less turnover. There are also added financial benefits to this, with workplace discrimination being highly costly for businesses, at USD 64 million a year (Heisler, 2020). In general, organizations with diverse and inclusive work environments are happier and healthier.
When employees feel included, safe, and happy, they will want to stay at their job. One of the most significant reasons for turnover is employees being unhappy with their workplace culture. Companies where employees feel included lead to a better work environment and culture. These companies are 58% more likely to attract top talent and 20% more likely to retain them (TDG, 2019).
Achieving DEI in the Workplace
To properly achieve DEI in the workplace, companies should first and foremost have a plan. To achieve all of the benefits that come with a diverse workforce, companies should develop a quantifiable long-term plan that includes goals, objectives, and finances. Once companies outline what they want to achieve, it will be easier to take action and execute their vision.
A company cannot have a diverse workforce without individuals from a diversity of backgrounds. There should be diversity present within an organization, and at all levels. This means that some effort toward recruiting has to be made. One way to hire diverse individuals is to eliminate biases against them in the hiring system and create an equitable workplace that provides all candidates with equal employment opportunities. Companies can implement DEI into their hiring practices by paying close attention to how job descriptions, resume screenings, and interviews are conducted in order to avoid unconscious biases. Automation software can be used to prepare resumes that removes items such as names that can cause unwitting bias.
Having a diverse workplace is only the first step. It is essential to make all employees feel comfortable and given the necessary resources to succeed. Although a diverse workforce comes with many benefits, some challenges will need to be addressed. With different backgrounds, there is room for misunderstandings, bias, and microaggressions. This is where education and training come in. Successful companies have various forms of training that address unconscious biases and prejudices. Often people have implicit biases that manifest in different ways, such as microaggressions or actions that can make others uncomfortable. Being educated about these biases allows for employees and employers alike to realize their biases and correct them accordingly.
Companies and their leaders need to be aware of inequities that are built into society, and therefore can unintentionally exist in their organizations as a result. After acknowledging inequities and barriers, companies should strive to remove them and allow for equal opportunities. This can be done through offering resources and programs for disadvantaged employees.
Lastly, companies need to show employees that they prioritize building an inclusive culture. Successful companies can do this in several ways, such as building DEI into their mission statement and onboarding process and having policies supporting and protecting diverse individuals (Burrous, 2018). If a company can successfully foster a diverse, equitable, and inclusive environment, employees will feel comfortable, valued, and safe.
FreshMart
After all of the research Sara compiled about DEI, she calls for a meeting with her boss to provide her strategic recommendation and model.
Discussion Questions
After reading this case study ,please answer the all question in your own word.
In the wake of the COVID-19 pandemic, the landscape of the job market has shifted significantly. Employees now have more choices regarding where they work, and they are increasingly selective about the companies they choose to work for. Factors such as pay increases and bonuses, which were once the primary incentives for employees, are no longer enough to attract and retain talent. Today, prospective employees are seeking ethical companies that share their values. This case study revolves around FreshMart, a food retailer that has observed a spike in employee turnover and difficulties in recruiting new talent. In response, the company is exploring the potential benefits of implementing Diversity, Equity, and Inclusion (DEI) initiatives.
Diversity, Equity, and Inclusion are fundamental concepts in today’s workplace. Diversity encompasses the presence of differences among individuals, including aspects such as race, ethnicity, gender, sexual orientation, religious beliefs, disabilities, and socioeconomic status. Importantly, the perception of workplace diversity varies among generations. Younger generations value diverse perspectives and the potential for change, while older generations seek equal and fair representation. Equity, on the other hand, focuses on impartial and fair processes and programs that ensure equal opportunities for all individuals. It seeks to eliminate barriers and create a level playing field. Equity is not about granting special privileges but removing obstacles that hinder equality. Inclusion creates a collaborative and respectful work environment where every individual feels welcome and valued for their authentic selves. Inclusive workplaces embrace all differences and provide a sense of belonging. For organizations to have an inclusive culture, they must ensure equitable access to opportunities, fair wages, and good working conditions.
Several companies have successfully integrated DEI into their culture. CarMax, for example, established a Diversity and Inclusion Council that concentrates on areas such as communication, education, leadership, development, and associate experience. Farmers Insurance supports employee resource groups that help employees grow personally and professionally. Liberty Mutual has a multiyear plan with specific goals for increased representation of women and people of color in managerial positions. Slack, meanwhile, focuses on developing diverse talent through programs like the Diversity, Engagement, and Belonging (DEB) program and the Rising Tides program.
Integrating DEI into the workplace brings multifaceted success to businesses. Job seekers increasingly prioritize working for ethical companies that prioritize DEI, making such companies more attractive to a wider pool of candidates. Diverse teams bring fresh ideas and perspectives, leading to increased innovation. A study by the Victorian Equal Opportunity and Human Rights Commission and Deloitte showed that inclusive workplaces witnessed an 83% increase in employee innovation. Companies with diverse leadership teams also experience a 45% higher innovation revenue. Financially, organizations with more racial and gender diversity generate more sales revenue, attract more customers, and earn higher profits.
Recruitment and retention are significantly influenced by DEI. Job seekers highly value diversity, and companies that incorporate DEI into their culture can attract top talent. These companies also tend to retain employees better, as they experience less workplace discrimination. Workplace discrimination is expensive, costing businesses USD 64 million annually. Moreover, organizations with diverse and inclusive work environments tend to have happier and healthier employees, resulting in reduced turnover.
To achieve DEI in the workplace, companies must create a quantifiable long-term plan that outlines goals, objectives, and budgets. The recruitment process should eliminate biases that hinder equal employment opportunities. Training and education are crucial to address unconscious biases and prejudices. Companies should also acknowledge societal inequities and work to remove barriers and provide resources to disadvantaged employees. Demonstrating a commitment to building an inclusive culture involves incorporating DEI into the company’s mission statement, onboarding process, and policies.
Sara, the employee assigned to this task at FreshMart, must emphasize to her boss that DEI is not just about diversity quotas but about creating an inclusive work environment where employees feel safe and valued. Diversity quotas can lead to tokenism, where individuals are hired for meeting quotas rather than their qualifications.
If FreshMart prioritizes a diverse and inclusive work environment, it can expect a broader talent pool, increased innovation, better customer satisfaction, and reduced turnover. Moreover, true success in creating an inclusive culture requires ideological commitment, ensuring that DEI efforts are deeply ingrained in the company’s values and practices.
The implementation of DEI initiatives can significantly benefit companies like FreshMart, particularly in the face of high turnover and recruitment challenges. Such initiatives should encompass diversity, equity, and inclusion to create a harmonious and supportive work environment. A well-planned approach to DEI will not only help in retaining employees but also attract top talent and foster a culture of innovation and inclusivity in the workplace.
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