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A Business Guide to Diversity, Equity and Inclusion

The last two decades have seen a sustained focus on diversity, equity and inclusion in both work and wider society. Whilst great leaps forward have been made in fighting some of the prejudices, oppression and inequalities that still exist in our workplaces, it’s clear that there are still massive areas for improvement.

Diversity, equity and inclusion (often shortened to DEI) is only set to become more relevant to employers in the next few years, as they struggle to maintain employee engagement, competitiveness and profitability in a tight marketplace. Some, however, are already investing heavily now: a 2023 survey for Incfile found that 87% of SMEs who responded will invest in DEI initiatives for their organisations in 2023, for instance.

In this business guide to diversity, equity and inclusion, we’ll cover detailed definitions of what DEI actually is, why it matters and how you can effectively manage it in your own workplace.

What is diversity, equity and inclusion?


The Oxford Languages dictionary describes diversity as:

“the practice or quality of including or involving people from a range of different social and ethnic backgrounds and of different genders, sexual orientations, etc.”

This is a word used to describe how much a workplace is made up of people with different characteristics. A diverse workplace is one in which employees come from, and have, a variety of different characteristics.

Diverse workplaces better reflect the diversity of the world that we live in. As a result, they’re able to make better decisions, better reflect their target audiences and help support a healthy society.


Equity is defined by OLD as:

“the quality of being fair and impartial.”

At first glance, you might confuse this word for a related one: equality, but the two refer to very different approaches in a workplace context. The differences between them are quite subtle.

Gallup sums up what equity is incredibly well. For them, “[equity] considers the historical and sociopolitical factors that affect opportunities and experiences so that policies, procedures and systems can help meet people's unique needs without one person or group having an unfair advantage over another.”

Whereas equality as a concept is about treating every single person and group in the same way, equity considers the fact that historic oppression and past experiences may mean a marginalised group needs more resources to be treated in the same, equal way. In effect, these groups are starting from positions further behind that others and need to be supported in different ways to ensure true equality with others.

International Women’s Day has a very useful blog and excellent graphics that explore the difference between the two topics.

For IWD, equality means “each individual or group of people is given the same resources or opportunities.” In other words, it’s about treating people the same, regardless of different characteristics that they may have. Equity, on the other hand, “recognizes that each person has different circumstances, and allocates the exact resources and opportunities needed to reach an equal outcome.”


Again, OLD defines inclusion as:

“the practice or policy of providing equal access to opportunities and resources for people who might otherwise be excluded or marginalized, such as those who have physical or intellectual disabilities and members of other minority groups.”

If diversity and equity are mostly theoretical concepts, then inclusion is a practical one, focused on putting these ideas into physical action across the workplace. So, to put it simply, inclusion is the physical act of building equal and equitable access to development and opportunities in your workplace by implementing policies, strategies and training. Of course, it can have a theoretical component, but, fundamentally, it’s about how you put those basic ideas into practice.

Why diversity, equity and inclusion matters

It’s fair to suggest that within living memory, topics like diversity, equality and inclusion were pretty much ignored by most leaders in businesses and organisations. They weren’t seen as priorities, much less burning issues that impact the wellbeing of employees, the efficiency, and thus, profitability, of businesses and the health of wider society.

The last few decades however, have seen a complete reversal in this, with 3 in 5 organisations stating that diversity, equity and inclusion are strategic priorities. Diversity, equity and inclusion are seen as fundamental to the workplace of the 21st century, and leaders, decision-makers and boards are taking steps to improve how well their organisations approach these issues.

The focus on diversity, equity and inclusion in the workplace has its roots in the Civil Rights movement that swept across the USA in the 1950s and 60s. This movement saw Black Americans stand up against the systemic discrimination and segregation that they experienced in society and fight for equal rights, and it challenged society to fundamentally reconsider the way it oppressed millions of its citizens. As a result, many companies and organisations set up programmes to consider how inequality and discrimination were perpetuated and maintained in the workplace. This led to the development of the diversity, equity and inclusion programmes that we know today.

A diverse team of workers holding hands

Why DEI matters

So, we know that most businesses are pivoting towards investing in diversity, equity and inclusion and

1.    It’s morally right

The most obvious reason that your organisation should care about diversity, inclusion and equality is the fact that it’s just plain right: it is the morally correct thing to do. As the CIPD outlines, social arguments for diversity and inclusion are based on the fundamental premise that every person has the right to be treated fairly, an idea that itself is underpinned by legislation like the Equality Act 2010.

Practically speaking, diversity and inclusion in the workplaces is about ensuring that everyone has equal access to employment, development and training, and that they aren’t treated negatively as a result of certain characteristics like gender, sexual orientation, race, religion, disability, age etc. (these are referred to as ‘Protected Characteristics’ in the Equality Act 2010)

In most cases, your organisation (if it’s a business) will be extracting profit from society. It’s only morally right that you give something back to that society through encouraging the growth, happiness and development of its citizens and play your part in making the world a better place to live. Playing a leading role in promoting diversity, inclusion and equity is one of the most practical ways that organisations can help improve society.

2.    It fosters employee engagement

Even, if for some bizarre reason, your organisation doesn’t believe in the moral arguments behind promoting equality and diversity in the workplace, there is more than enough evidence that shows the positive impact that diversity and inclusion measures can have on organisational performance.

One area in particular is employee engagement. According to a recent report by Deloitte, millennial workers (those who were born between 1984 and 2000) were found to be 83% more engaged at work when they felt that they were working for a company that had an inclusive company culture.

With millennials set to make up 75% of the overall workforce by 2025, it’s clear that many organisations will need to improve their focus on diversity and inclusion issues if they’re keen on maintaining, if not improving, employee engagement over the long-term.

3.    It allows you to draw from a larger talent pool

If you want a real-life example of how diversity makes a system stronger, just look at the environment for a good example. Diversity is a fundamental feature of life on the planet and is crucial to maintaining health and vitality in plants, animals and bacteria. The huge variety of variation in the DNA of animals and plants of the same and different species allows different genetic features to flourish, creating an ecosystem that is much more balanced, and that improves the chances of survival. Diversity basically builds resilience into an ecosystem.

If you think of your organisation as a finely balanced ecosystem, it’s easy to see how diversity of thought and experience can add resilience to, and improve the chances of success for, your organisation. By prizing diversity and trying to recruit people and develop employees from a range of backgrounds you’ll build an organisation that is ultimately more resilient and able to draw on the skills of many more people. This can help make your organisation much stronger, more creativity and more flexible when presented with challenging circumstances.

4.    It improves employee retention

Logically, it’s pretty clear how making diversity, equity and inclusion a priority in your workplace can improve employee retention: it makes people feel valued for who they are and what they do.

When we strip diversity, equity and inclusion down to its bare bones, it’s about ensuring that people are treated without prejudice, are valued for who they are and given an equal opportunity to develop their skills. It’s just basic human psychology. When you acknowledge the innate strengths that an employee has, you prove to them that you see the person they are, and not just the function that they provide. As a result, they feel like their contribution is respected and they’ll be more likely to be engaged at work and remain loyal to your organisation.

With one study suggesting that the average cost of an employee leaving their role is about ⅓ of their total salary, and a survey by Investors in People finding that 39% of employees said that not feeling valued at work was one of the main contributing factors towards them deciding to search for another job, it’s obvious that organisations need to get a grip of the situation. Investing in policies that ensure fair treatment, inclusion and equitable access to employee development can all play a key part in improving staff retention rates.

A diverse team of workers in a group hug

5.    You have a legal duty to protect people from discrimination and prejudice in the workplace

One of the key reasons your organisation should be focusing on diversity, equity and inclusion at work is the simple fact that you could fall foul of the law if you don’t understand how discrimination and prejudice can show themselves in a workplace setting.

The Equality Act 2010 requires employers to ensure that people are protected from discrimination in the workplace and wider society. It makes discriminating against people on the basis of protected characteristics illegal and gives employees legal protection against harassment and victimisation.

Under the act, employers have a legal duty to make sure that they are not discriminating against people in their day to day operations. As a result, this piece of legislation is incredibly important when it comes to diversity, equity and inclusion at work.

How to manage diversity, equality and inclusion in your organisation

According to the CIPD, one of the most effective ways that organisations can manage equality, diversity and inclusion in a company is by taking a ‘systemic approach’. This involves creating resources that drive a long-term, permanent change in the approach of an organisation to DEI and develop inclusivity in all aspects of work.

Of course, the exact way that you go about making your workplace more diverse, inclusive and equitable will depend on the specific way that your organisation makes change. The following points are some broad ideas that you can use to customise your own approach to making your workplace more inclusive.

1.   Create dedicated policies that centre the lived experience of employees

Promoting diversity, equity and inclusion is about creating a working environment that allows people to feel secure, safe and protected from unfair treatment and where they feel they are supported to reach their full potential.

One of the most essential ways that employers can do that is by creating dedicated policies that are informed by the people that they are supporting.

Good DEI policies are ones that are focused on intersectionality – the idea that we all experience oppression and prejudice in different, overlapping ways – and on the lived experience of people who face prejudice in the workplace. Both of these approaches focus on listening to the actual experiences of the people that you are trying to help in the workplace and using these to inform their organisation’s approach to diversity, equity and inclusion.

There’s a lot of guidance online about how to create particular policies for your organisation. Check out this excellent resource for a detailed guide to how to use policies to target and address diversity challenges that your organisation might face.

2.   Improve representation

As this fascinating Forbes article explores, the need to feel valued, listened to and seen are innate human traits and become particularly apparent when we’re working together. Fundamentally, we want to recognise part of ourselves in the decision-making processes of an organisation and to feel that we have the power to influence and affect change somewhere. Representation of minority groups in senior positions/ positions of power in your organisation can help to show that you’re taking inclusion and equality seriously.

Whether or not we see people who look similar to us, or have similar characteristics, in leadership roles in our organisation can have a big effect on whether we feel included and part of the wider group. For example, the employees of a diverse workplace are not particularly being very well represented if the only people in positions of visible power and influence in the organisation come from the same background.

If your organisation is serious about making itself more inclusive and representative of the wider workplace, consider placing qualified employees from diverse backgrounds in leadership positions in your organisation. Whilst this is not likely to transform your organisation when used on its own, when combined with other DEI initiatives it can be a really effective tool to improve employee engagement and inclusion in the workplace.

A diverse team of workers in a meeting smiling

3. Invest in specialist training

Learning is a practical, cost-effective way to get everyone in your workplace on the same page when it comes to encouraging diversity and inclusion. The only way that you’ll make sustainable change in your workplace when it comes to DEI is by embarking on an organisation-wide learning programme about the key issues, and how employees can tackle them.

Skills-based learning programmes, courses and qualifications, in particular, can equip your employees with the skills and knowledge they’ll need to build an inclusive, diverse culture in the workplace.

In terms of training, there are a huge variety of different types of programmes that you can choose from, including general diversity training, unconscious bias training, religious sensitivity training, and specialist diversity and inclusion training for managers. This useful blog by 360learning goes into detail about the various types of DEI learning programmes that you could invest in for your employees.

Of course, some of the key people in an organisation responsible for DEI include HR professionals and the wider HR/L&D department. An organisation’s senior leaders will probably be relying on you to take the lead on diversity, equity and inclusion and devise, implement and manage policies related to this.

If you’re working in Human Resources or Learning and Development and want to enhance your knowledge of Diversity, Equity and Inclusion best practice, qualifications can really help equip you with the specialist skills you’ll need to excel at your role. The CIPD Level 5 Associate Diploma in People Management and the CIPD Level 5 Associate Diploma in Organisational Learning and Development covers DEI in detail. If you’re a senior professional, looking to enhance your specialist DEI skills, studying a CIPD Level 7 could improve your chances of success.

4. Work with trade unions and employee representatives

Developing a long-term culture of inclusion in your organisation means empowering people and giving them a meaningful voice. One of the best ways that you can do that is to encourage underrepresented groups to form staff networks to represent their interests, concerns and contribution in the workplace. This factsheet by the CIPD provides a practical guide for how you go about encouraging the development of them.  

In addition, working with any recognised trade unions in your workplace can be a good idea to help you make your workplace more representative and focused on the needs of employees, as well as customers or service-users.

Trade unions are focused on improving diversity, equity and inclusion in the workplace. Whilst HR can often take an oppositional approach against trade unions, they are one of the efficient and effective ways for employees to represent their specific interests in the workplace. Far from being enemies, trade unions can often be powerful allies in the fight to make your workplace more inclusive and more representative of the employees who work there.

Diversity, Equity and Inclusion: a strategic focus

So, to conclude, it should be pretty obvious by now that diversity, equity and inclusion are huge topics that deserve being thought about in detail. With public consciousness turning more and more towards DEI issues, it’s vital that organisations take steps to ensure their organisations are as diverse, as equitable and as inclusive, as possible. Doing so will help them engage and retain underrepresented employees, build a positive workplace culture and ultimately better reflect the audiences that they serve.

Enhance your DEI skills with a professional HR qualification you can study from anywhere, anytime. Download your free CIPD course guide.