India Inc must stand by DEI: It’s both a social and business imperative

DEI is not just a social or moral imperative. Much research has shown a positive correlation with business performance. (iStock)
DEI is not just a social or moral imperative. Much research has shown a positive correlation with business performance. (iStock)

Summary

  • In Greek, ‘dei’ means ‘must.’ As America swings with Donald Trump’s politics to roll back diversity, equity and inclusion programmes, Indian companies should step up to articulate why DEI is a must.

Among Donald Trump’s first acts as US President was to put all government staff working on diversity, equity and inclusion (DEI) on administrative leave before shutting down federal programmes. 

Even before Trump put his pen to this executive order, deeming DEI “dangerous, demeaning and immoral," a bunch of CXOs had declared their disdain, terming it “racist", “anti-American" and “illegal." 

Also Read: A boycott of US retailer Costco for its diversity efforts? It’s likely to fail

With brave exceptions, America Inc seems to have turned against DEI in an instant, as if earlier efforts to address the under-representation of gender, ethnic and other identities were a farce. 

DEI initiatives in the US got a push after the 2020 killing of George Floyd by cops, though inclusion has been pursued in some form since the 1960s’ Civil Rights Act. 

Diversity is about embracing differences, while equity relates to treating everyone fairly and offering equal opportunity, and inclusion calls for an atmosphere where all folks feel welcome. 

The overarching idea is to have people of varying backgrounds and life experiences contribute. 

Affirmative action to that end goes by the rationale that a cross-section of society at every level—its most powerful and best-paid included—must reflect the overall population’s diversity.

Over the past half decade, companies around the world had doubled down on DEI. 

Yet, today, as wealthy corporate leaders in the US such as Elon Musk and Bill Ackman deride diversity hiring, and businesses like Walmart and John Deere roll back initiatives, it appears that DEI was largely about optics more than conviction. 

Also Read: DEI: Don’t throw the baby out with the bathwater

How should Indian companies respond to all this? 

Ideally, by clarifying their own stance. 

Employers that have embraced DEI must step up and articulate why they value diverse and inclusive workplaces. Part of the answer is that it serves a national purpose. 

In India, a country of deep inequalities that has long grappled with a debate of ‘merit versus reservation’—26 January marks 75 years since our Constitution came into effect—private-sector DEI initiatives have been a welcome step towards equality of opportunity. 

While this grants a foot in the door to those disadvantaged by forces beyond their control, it also makes eminent business sense.

DEI is not just a social or moral imperative. 

Much research has shown a positive correlation with business performance. 

Employee retention is found to be 2.4 times higher in organizations that make workers feel like they can be themselves at work, according to BCG’s BLISS (Bias-Free, Leadership, Inclusion, Safety, and Support) Index of workplace inclusion. 

Teams with a diverse range of life experiences are more creative, empathetic and innovative; and diversity of viewpoints leads to better satisfaction of customer needs and superior profits. 

Buyers seem to recognize its value too. 

Kantar’s Brand Inclusion Index 2024, a survey of more than 23,000 people in 18 countries, found that the purchase decisions of three-fourths were influenced by a brand’s reputation for diversity and inclusion. 

Effective DEI takes time and effort, but is worth the investment. 

Also Read: LGBTQIA+ inclusion: Is it mere lip service in India Inc?

It is people, ultimately, who must fulfil the mission of an organization by applying their minds. 

The wider the funnel of thoughts and analysis going into decisions, the likelier that pitfalls of ‘groupthink’ will be averted and innovative solutions will emerge. 

India Inc has been watching Trump’s rise to power for its impact on trade, capital costs, work visas and more. In the case of DEI, businesses should forge their own path. 

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