A diverse group of colleagues stand in a modern office
Understanding the difference between diversity, equity, and inclusion — and how they work together — is important to make a business well-rounded and successful. — Getty Images/pixelfit

Diversity, equity, and inclusion (DE&I) are important goals for many business teams — not only to establish an inclusive workplace, but also to make a business as well-rounded and successful as possible. In fact, according to McKinsey & Company, diverse and inclusive corporations are more likely to outperform their competitors by 36%.

Each word in DE&I is related to distinct principles that individually speak to an inclusive culture within the workplace:

  • Diversity refers to understanding and accepting the differences between human beings in a workplace when it comes to things like race, gender, sexual orientation, religion, nationality, and socioeconomic status.
  • Equity refers to the understanding that each person has different circumstances and the need to allocate resources so that there will be equal outcomes. Equity is not to be confused with equality, as equality simply means everyone is given the same resources.
  • Inclusion refers to the concept that all people, regardless of their social status, race, religion, and gender are welcome and valued in the workplace and are able to thrive with respect from colleagues and superiors.

[Read more: Six Small Business Owners on Diversity, Equity, and Inclusion]

How does DE&I affect the workplace?

When pieced together, all components of DE&I form a powerful concept within the workplace that drives companies and employees forward. Now more than ever, employees are searching for companies that match their values. In fact, according to Glassdoor, two out of three job candidates are searching for companies that have a diverse workforce.

Additionally, DE&I can affect companies’ bottom lines. According to a recent BCG study, companies with diverse management had innovation revenues 19 percentage points higher than companies with “below-average leadership diversity.” Interweaving DE&I into your company’s values will help your revenue and will help ensure employees feel heard and valued.

Quotes that explain DE&I for business

Create intentional pathways to success

“We’re improving retention, creating pathways, and diversifying our white-collar workforce and our executive team at the same time,” Chris Winton, senior vice president of human resources at FedEx Ground.

In a successful DE&I framework, companies should remove barriers to access, such as advanced degree requirements, so more individuals can qualify for open positions.

Build a safe company culture

“For me personally, the value that I bring is only evident when I don’t have to pretend or perform. When I can be my true authentic self, I can be the best version of me that I can be. That’s the true value of inclusion.” — Kim Jenkins, global head of diversity, equity, inclusion, and belonging at PayPal.

You’ve created a company culture that encompasses the values of DE&I when your employees feel confident enough to show their true selves.

When pieced together, all components of DE&I form a powerful concept within the workplace that drives companies and employees forward.

Embed DE&I throughout the company

“With the strong support and advocacy of the C-suite, particularly our CEO, that really motivates us to create this scalable global DE&I platform across the enterprise. [It] permeates the entire management team and leadership team —focus and commitment.” — Joe Simms, chief diversity officer of Stanley BLACK+DECKER.

Successful DE&I practices are interwoven across the organization, especially at the C-suite level.

Set goals for DE&I progression within the workplace

“The uncomfortable truth is that we actually have not seen enough progress over the last … 40 years. If you look at just the numbers of Black and Latinx executives in senior positions in large firms … it’s nowhere near where it should be.” — Frank Cooper III, senior managing director and global chief marketing officer at BlackRock.

Keep setting the goals and meeting targets as well as holding people accountable, said Cooper. These efforts will help jumpstart change.

Use data to guide diversity and inclusion efforts

“A lot of [past] decisions have been made on instinct rather than impact measurement and research. There's an opportunity to dig deep into the research and analysis of it all so that we can ... alter our strategies [and] build best practices.” — Crystal Barnes, senior vice president of culture and corporate social responsibility for ViacomCBS.

Analytics can help pinpoint where more progress needs to be made within DE&I efforts as well as what your company should build upon.

Consider the customer and employee experience

“Often when we talk about diversity, we talk about the things that are a little [easier] to characterize … the observable traits about people. But there's so much more that constitutes our own lived experience.” — Prakash Janakiraman, co-founder of Nextdoor.

Consider ways to make your business more accessible for all, such as offering additional language choices or services for those with disabilities.

[Read more: Diversity, Equity, and Inclusion Terms Business Owners Should Know]

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