Amid the changes in our working ways over the past few years, Diversity, Equity, and Inclusion (DEI) has emerged as one of the most important priorities for HR and leadership teams.
McKinsey’s report found that diverse companies are far more likely to financially outperform their competition.
The case is no different whether you’re a Fortune 500 company or a recently launched tech start-up that just raised a seed round – to become a successful company – you must invest in DEI.
To help you get started, we’ve asked experts in the field about some of the best practices in DEI, and the common mistakes to avoid. A huge thank you to Pierre Harscouet from Checkout.com, Katja Toropainen from Inklusiiv, and Karen Burns from Fyma for contributing to this article.
Now, let’s get into it!
What is DEI?
DEI stands for Diversity, Equity, and Inclusion. In the workplace, companies adopt DEI practices to make people of all backgrounds feel welcome, and to ensure the work environment they provide enables diverse employees to perform at their best.
The Extension Foundation defines Diversity as the presence of differences that may include race, gender, religion, sexual orientation, ethnicity, nationality, socioeconomic status, language, (dis)ability, age, religious commitment, or political perspective.
Equity promotes justice and fairness within processes and distribution of resources to provide equal possible outcomes for every individual.
Inclusion ensures that everyone feels welcome. It also considers to what degree can underrepresented take part in decision-making processes and development opportunities within the company.
Why should early-stage start-ups invest in DEI?
It’s common for start-ups to label DEI as a nice-to-have attribute that doesn’t need attention until the later stages of company growth.
Every start-up should invest in DEI, regardless of the phase they’re currently in.
Here’s how Karen from Fyma sees it: “An increasing amount of investors look for diverse teams from early on. Diverse teams have better returns and a wider network of knowledge. It means that hiring will be easier down the road – great talent is more likely to join a company that has invested in Diversity, Equity, and Inclusion.”
Katja from Inklusiiv mentions that choosing not to invest in DEI early will come back to bite you. “If you don’t invest in DEI early, you risk it becoming a bottleneck for your company. A lack of inclusion could hinder the attraction and retention of diverse talent.”
Pierre from Checkout.com adds that it will take a lot of effort and money to re-adjust the process afterward.
How can early-stage start-ups get started with DEI?
Katja from Inklusiiv says that diversity begins with educating your team. This could be a workshop where you discuss the terminology of DEI and debunk any myths around it. For example, investing in DEI doesn’t mean you hire someone because of their gender or other diversity factors. An internal session around DEI will help you define what it means for your start-up, and plan the first steps around it.
Pierre from Checkout.com puts it like this: “As start-ups tend to grow quickly, it’s important to structure your hiring process to be inclusive and fair for all candidates. If you’re working with agencies, insist that you always need to have a diverse range of talent in your pipeline.”
Inclusion also applies to the overall work environment. “It’s essential to create a safe environment where everyone feels free to share ideas, be who they are, and bring their authentic selves in order to be creative and develop better products” adds Pierre. “The company culture you establish early will set the tone for the following years”.
“Another way to recognize diversity and foster inclusion is by celebrating cultural events, including Diwali, Eid, and Chinese New Year. ”
While you should take the first baby steps toward building a more diverse and inclusive culture, don’t take it as something you complete once.
“There are some low-hanging fruits in every company that can be addressed right away. Instead of only thinking about quick wins, focus on treating DEI as a journey of continuous learning and development,” says Katja.
Diversity, Equity and Inclusion in Start-Ups: Best Practices
Gender-neutral messaging
Did you know that there’s a high chance that your finely crafted job advert is biased?
For example, using words like assertive, ambitious, driven, decisive, and active in your job adverts will inevitably attract more male candidates to apply. However, using the Gender Decoder tool is a quick way to check your job adverts and ensure they use inclusive messaging.
Aim to create inclusive messaging across all your recruitment content, from your careers site and candidate reach-out messages to job adverts. Katja from Inklusiiv recommends software by Develop Diverse to make your communication inclusive.
Inclusive employee lifecycle
Pierre from Checkout.com insists all your candidates and existing employees must get fair treatment at each stage of the employee lifecycle. This ranges from the recruitment process to performance reviews, and promotion policies. Even look at who gets assigned to which projects.
You can solve a lot just by reflecting. “If you have an upcoming project, think about how you can be as inclusive as possible. Are you representing everyone? What kind of voices do we have around the table? Do people have the chance to express themselves? Are the same people always assigned to the most interesting projects?”
Leadership skills
According to Katja, developing inclusive leadership skills, such as curiosity, and learning about your biases and DEI in general, can go a long way. Learn to be transparent and vulnerable to your team. This sparks up the conversation about DEI and leads to a transparent environment.
“You don’t need to be ready and know it all. Attitude and openness to feedback are what matters most.”
Code of conduct
All of our contributors agree that you need to have some DEI policies in place and follow them. A code of conduct will allow you to consciously move towards building an inclusive culture. For example, ensuring your team refers to each other using inclusive and respectful language.
There must be a transparent line for employees to report concerns and questions. Also, if any issues arise, you must know how to take action and not sit on the issue itself.
Common DEI mistakes you should avoid
Starting too late
Karen from Fyma says that you must start with DEI from early on. You can’t treat it as an add-on that you will invest in when you have x amount of revenue and x amount of employees. By that time, it’s already too late. Certain company culture has been established, and it will be difficult for you to change that.
Not using DEI in your employer branding
Strategically incorporating DEI into your employer branding activities can be a great way to reach out to a wider talent pool. This involves both internal and external communications. For instance – in your job adverts – do you communicate how you value DEI to encourage applicants from all backgrounds to apply?
“If you shy away from celebrating and showcasing a diverse workforce (whether externally or internally) then there can be no DEI practices anyway,” insists Karen.
Focusing on diversity, but not inclusion
It’s common for companies to focus only on diversity while overlooking the importance of building an inclusive culture.
Katja puts it this way: “Contrary to popular belief, inclusion does not mean that everyone must agree on everything and that there is no room for difficult conversations or conflict. Rather, inclusion means that there’s openness, psychological safety, and a culture where people feel comfortable bringing up different viewpoints, issues, worries, and those can be constructively addressed.”
Not having an actionable plan
While organizing internal workshops and educating your team about the importance of DEI is a critical first step, it doesn’t necessarily mean you’re making progress.
Professor Joan C. Williams said it best: ”If a company had a problem with sales, you wouldn’t hold a deep, sincere conversation about how much everybody values sales, dedicate a ‘National Celebrate Sales Month,’ and expect anything to change. Unfortunately, that’s a lot of what we’ve been doing in the diversity, equity, and inclusion context.”
“To achieve meaningful change, it is essential for employees to engage in activities that identify opportunities for improvement. This enables the creation of a concrete plan of action that will help achieve the desired goals and outcomes.,” says Katja.
Focusing on one demographic aspect
A common mistake according to Pierre is forgetting that people belong to many different demographic groups at the same time. Categorizing people based on their race, age and gender isn’t enough.
“People are different from each other on so many levels. You must find a balance between looking at the data and understanding that people are individuals first.”
Furthermore, hiring someone because of one demographic aspect is often illegal. For instance, tech companies might think they should hire someone because of their gender. “It’s counterproductive and could be tokenism.”
Takeaways
DEI influences every organization, regardless of whether you have consciously invested in it.
If you have invested in DEI early, it becomes a major asset in hiring and retaining top talent.
Yet, if you treat it as an add-on and don’t see the value in DEI, your company won’t perform as well down the line.
As a leader, the easiest way to begin is to adopt a mindset that DEI is a continuous learning and development process. You don’t have to be an expert right now. Instead, be open to feedback, and start having transparent conversations with your team.
Host a workshop that educates and informs employees about the importance of DEI but also creates an actionable plan that helps you get to where you want to be. Assess your current recruitment messaging, employee lifecycle, and the makeup of your team.
From there, you can identify areas of weakness and start your journey of becoming a more diverse and inclusive organization.