Although movements to address racial injustice have a mixed history of success, many employers say the demand for more attention to DEI is becoming directly relevant to their efforts to attract and retain workers. (Photo: Shutterstock)
The phrase diversity, equity, and inclusion (DEI) describes a range of employee concerns that have gained prominence in recent years, but the events of 2020 have further elevated the issues around DEI. The death of George Floyd and the explosion of Black Lives Matter protests showed a hunger among the American people for the creation of a more just and equitable society. And the business world has seen that hunger translate into a demand from workers that companies do more than pay lip service to DEI.
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As a result, a growing number of businesses are moving forward with new attempts to address DEI topics using rapidly evolving benefits strategies and ideas. Although not all of these efforts will become common practices, the sense among benefits experts is that it's better to experiment with new ideas than rely on the status quo. And many benefits advisors and HR professionals say the upside of addressing the new demand for attention to DEI far outweighs any potential downside.
A historic moment
The civil rights protests of 2020 were seen by many as a watershed moment that is creating real change. Although movements to address racial injustice have a mixed history of success, many employers say the demand for more attention to DEI is becoming directly relevant to their efforts to attract and retain workers.
Michael Garrett, principal with Mercer, notes that his brokerage has done work in the DEI area for more than five years, but earlier policies were primarily related to adoption and surrogacy support for same-sex couples and single parents. The death of George Floyd, and the subsequent outrage over other cases of racial injustice, sparked a new direction and energy around DEI, he adds.
"Six months ago, we started hearing more about other aspects of DEI," he says. "The top issues today are around racial and ethnic minorities, the next level would be people with disabilities, then LGBTQ. There's also interest in veterans, women, and other populations. But that's kind of how our journey has evolved and grown, as a result of all these different societal forces."
"We were actually concerned in the spring that DEI would kind of fall off the radar screen of employers, because they would see it more as an extra and something that would be expendable."
Garrett also emphasizes that the interest in DEI issues has not receded, even as the protests have faded from the headlines. "We were actually concerned in the spring that DEI would kind of fall off the radar screen of employers, because they would see it more as an extra and something that would be expendable," he says. "But then the protests around civil rights happened, and it's really front and center for a lot of employers right now."
One of the changes in the corporate world has been creating positions to directly address DEI issues. "Some companies are hiring for diversity officers—that's kind of a new shift we've seen; people are trying to hire for this type of position," says Mark Seely, senior VP and employee benefits practice leader at Lockton Companies. Seely adds that vendors are now coming on the scene to offer tools for employers and brokers. "It's challenging to keep up; it seems like there's a new vendor in this space every week."
This wasn't always the case, though. The restaurant chain Noodles & Company, which has worked with both Garrett's and Seely's firms on developing DEI benefits strategies, struggled at first to connect benefit strategies with populations that were disadvantaged or overlooked. "I found it extremely challenging to find anything that combines the benefits being offered and how that supports DEI," says Amy Cohen, director of Total Rewards with Noodles & Company. "I was very surprised that I found limited resources to help identify what would support these different types of groups."
New strategies on DEI-related benefits
The experience of Noodles & Company is an example of the type of journey that employers have taken in trying to blaze a new trail in the DEI space. According to Sue Petersen, VP of human resources at Noodles & Company, the chain began addressing diversity and inclusion in 2018, with a comprehensive benefits platform called "LifeatNoodles," aimed at creating an inclusive workplace. Those benefits included English and Spanish courses for employees, maternity and adoption benefits, sick paid time off for all team members, Veterans Day paid time off for active military and veterans, gender-neutral restrooms, and gender identity options.
In October of this year, the company expanded the program further, by offering a list of new benefits aimed at building on the previous DEI-related benefits. The new benefits included free flu shots for all team members, free in-person and virtual mental health counseling for team members, tuition assistance for team members and families, free dental services for children under 14, six weeks of paid paternity leave (increased from two weeks), backup dependent care program, and surrogacy coverage up to $10,000.
"For us, the desire to feel included really is the foundation of our values. In order to feel cared for, they have to feel a part of something bigger, and know that their voice matters to us."
Petersen says the new offerings were developed after getting input from employees about their priorities. "We did a number of listening forums with our team members, to ask questions about how we were doing as an organization around inclusion," she says. "And some of the things that we ultimately introduced came from what we heard during those listening forums."
The goal, according to Petersen, is to create a workplace where employees feel valued and welcome—and then incorporating benefits offerings that reflect and build such a workplace. Noodles & Company is committed to continuing dialog on these issues with team members, she adds.
"We talk about encouraging each team member to bring the best version of themselves to work every day," she says. "For us, the desire to feel included really is the foundation of our values. In order to feel cared for, they have to feel a part of something bigger, and know that their voice matters to us."
As Seely notes, HR experts are seeing a change in vendor offerings as well. An August analysis from the Society of Human Resource Management (SHRM) found that software tools around DEI have moved from focusing on compliance to talent acquisition and areas such as workforce pay equity analytics.
"The growth in [DEI] technology solutions is being fueled by companies moving beyond strategies that focus on supporting individuals to those that support entire organizations," the SHRM analysis says.
The article quotes Carole Jackson, senior principal of research and products for Diversity and Inclusion at Mercer, who notes that budgets to address DEI issues have grown along with the emphasis on these concerns. "Rather than just providing one-off training of individual managers in unconscious bias or supporting individuals through employee resource groups, there's a shift to a more systematic organizational focus and a desire to create scalable change around [DEI], which the right technology can help drive," Jackson said.
DEI as part of a bigger picture
Many brokers describe efforts in the DEI arena as a way of providing a "holistic" approach to benefits. This approach to overall health of employees may include concepts such as social determinants of health or financial health—and will require a more big-picture approach to benefit strategies. Some experts say that merging medical benefits with voluntary benefits such as dependent care support or paid leave benefits may be one way to create a holistic strategy that addresses DEI.
"From transgender issues to civil unrest, it's a lot to handle. It's a very challenging and heated conversation from a lot of angles. But it's not going away."
Seely says the demand for a more inclusive and diverse workplace has been growing, especially among younger workers, and notes it can be challenging for both employers and brokers/consultants to address all concerns.
"From transgender issues to civil unrest, it's a lot to handle," he says. "It's a very challenging and heated conversation from a lot of angles. But it's not going away."
Seely adds that education and communication, even on tough topics, have always been part of a broker's job, as well as part of the role of corporate leadership. "It's not just HR and benefits, it's also the C-suite who needs to address this."
Garrett also points to the need for C-suite buy-in on DEI issues. Mercer recently released a report on the "Say/Do Gap" which found that 81% of U.S. organizations say they are focused on improving diversity and inclusion, yet less than half (42%) of organizations surveyed have made public commitments to racial or ethnic equality. The report called for making company leadership more accountable for DEI outcomes.
"Historically, companies have looked at diversity as a box-checking exercise," Garrett says. But he believes that attitudes are changing; that clients are demanding tangible improvement in the way companies handle DEI issues. "This has got to be sustained, and not just a one-and-done.'"
If anything, Petersen says, the troubled times that come with a pandemic, economic downturn, and civil unrest make it all the more important that employers meet the needs of employees. "With the pandemic, folks are rolling things back and drawing in. We felt that at this time more than ever, it was so important to invest in our team, to show them how important they are to us," she says. "At a time when many folks are dealing with different types of pain, we felt it to be an appropriate time to look at how we can expand the support to our team members, and create a more comprehensive program."
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