In a competitive labor market, it is a strategic imperative for employers to incorporate diversity, equity and inclusion (DEI) into talent and leadership strategies. This includes not only programs that support the diversity of talent preferences, but also what employees need to have equity in their careers, health and financial outcomes. Those employers who are not focused on equity run the risk of not attracting, retaining and engaging talent to move their businesses forward. But those that are able to use their pay, career and benefits strategies to demonstrably advance equity will have a distinct advantage as they compete for talent.
Despite the drive to progress DEI strategy, there is still much change needed to advance equitable outcomes. According to the 2022 Global Wealth Equity Index, women only accumulate 74% of the wealth of men at the end of their working careers, mostly due to gender pay gaps, delayed career trajectories, caregiving responsibilities and differences in financial literacy. Our 2022 Global Benefits Attitudes Survey also revealed that underrepresented employees, especially women and ethnic minorities, are less likely to report that they are paid fairly, experience psychological safety and have career advancement opportunities and support in the workplace.
For employers just getting started, or revising their DEI strategies, here are five actions to consider:
Conduct diversity workforce analytics to answer foundational questions: Are underrepresented talent (e.g., women, disabled, Black and African American, veterans) proportionately becoming candidates, interviewed and hired than highly represented talent (e.g., men, white employees)? Do your employee groups help in equitably growing their careers, promotion and related pay raises?
Then work to understand the “why” behind your data and how your current state compares to your overarching DEI and talent strategy and goals. Ask critical questions such as, where have we achieved equity across employees, where are there gaps or opportunities and what is the business risk of not acting.
For example, after your last pay equity study, did you make meaningful changes to minimize future gaps? Also ask: Did we look for pay gaps related to bias? Do we have a career framework? Do our managers effectively cultivate talent? Do we have inclusive benefits, focused on high impact game changers (e.g., LGBT+)? Use the answers to these questions to prioritize strategies that have the most impact on underrepresented employees and support your equity strategy.
Get a clear understanding of your workforce by going straight to the source. Ask them what they want, what they need and their experiences. If you haven’t already implemented a self-ID program (e.g., gender, race, LGBT+, disability, caregiver), establish one. That will make it possible to get different employee groups’ views.
Use different tools such as annual surveys and employee pulse surveys to continuously listen to your employees and get critical insights to inform your approach, leverage diversity or self-ID flags to understand similarities and differences across the workforce. These tools can help you to determine whether:
The relationship between employee and manager can influence equity, making manager engagement and training critical. Managers can impact how an employee feels about career growth and development, career opportunities to consider, resources available to them as well as their sense of belonging and connectedness to the organization.
2 in 5 organizations report being effective at communicating pay and pay equity information to managers
(Source: WTW 2023 Pay Transparency Survey).
Managers may have been promoted based on their business acumen, not their people skills. Foundational trainings of how to manage employees, create safety and trust are a start. Understanding bias and supporting a culture of inclusion is the next step to help ensure that employees from different backgrounds and range of needs are heard and seen in the organization, enabling them to thrive in the workplace. An example recognizing both visible and invisible disabilities and the importance of open and trusting dialog of working environment needs, performance management and career growth without bias.
A manager playbook or guide can help ensure that people managers have the right skills and resources to support all employees. Employee resources groups (ERGs) can provide important insight around the diversity of employee perspectives and experiences that managers need to consider and how. It is also important to keep managers engaged and supported.
Organizations should review and confirm that work models support the business and employees’ diverse and changing needs. For example, flexible working hours may improve career equity for caregivers of children and elderly loved ones. Remote work may provide greater support and productivity for employees with disabilities. Without various work models, key talent could be reduced or eliminated from your workforce.
3 out of 5 employers see career ecosystem as a priority
For some, optimizing work models may include structural changes like implementing hybrid work, job sharing, or flexible schedules, such as flextime or compressed work weeks. Also consider operational changes such as updating policy language for greater clarity in how managers and leaders can implement work models within their roles and teams.
Don’t underestimate the importance of how you communicate with all employees, and consider multiple approaches to reach different groups and bring equity to life. Fully use the insights gained from employee listening and manager engagement as well as from collaboration with your employee resource groups (ERGs). Such knowledge can help you determine the best way to communicate total rewards to your employees and how you will advance equity in careers, pay and benefits. Analyze the efficacy of communication methods to strengthen your messaging and ensure that your employees are aware of how they can contact you with questions or concerns.
4 out of 5 organizations use managers to communicate pay to employees
(Source: WTW 2023 Pay Transparency Survey)
The ultimate goal is overall employee wellbeing, where all employees feel valued and experience belonging, have a sense of equity in their ability to grow their careers, are paid fairly, remain physically and emotionally healthy and have financial resiliency that enables them to build wealth for the future goals and security.
Accomplishing this requires a laser focus on understanding your workforce data and how your career, pay, benefits and other factors play a critical role in advancing equity and DEI strategy. How you prioritize strategies to close equity gaps depend on your company’s specific needs. There is no-one-size fits approach, but there are tools that can help you listen better to your employees and engage and empower your managers.