Anti-Black racism alone has cost the US $16 trillion because of discrimination. This drastic amount is due to discriminatory lending practices, income lost due to wage disparities, housing credit, and lifetime income lost from discrimination in higher education. This is completely unacceptable and it is imperative that we make immediate changes such as addressing the wage gap and promoting top-level diversity within organizations.
In today’s climate it is comforting to know that conversations are starting to happen and changes are slowly starting to be made. Companies are jumping on board to support diversity, equity and inclusion (DEI) in the workplace. Many are creating and hiring new positions to help them create their own DEI strategies. They are realizing that there are many benefits such as greater innovation, happier and more productive teams, increased customer retention and satisfaction as well as higher profits.
The majority of these new DEI positions are ending up under human resources (HR) departments. But is this the right approach? Is DEI an HR function? Does in belong under this department or should it be a stand-alone department encompassing not only HR but the entire organization?
Let’s start by taking a look at the history of and purpose of HR.
The term human resources was first mentioned by institutional economist John R. Commons in his 1893 book The Distribution of Wealth although it was not defined. In the early 1900s, the expression was used to support the concept that humans have dignity and are valuable. By the 1960s labor relations started to gain importance and in the 1970s companies started to experience increasing challenges with competition, rapid technical changes, globalization and deregulation. This forced organizations to focus on predicting future changes, enhance strategic plans and promote organizational effectiveness. Today, the human resources department is the division that is responsible for running the employee life cycle, administering benefits, overseeing employee relations, compensation planning and labor law compliance. Its main functions include:
- Recruiting, hiring and staffing
- Compensation, payroll and benefits
- Employee relations including disciplinary actions
- Labor law compliance
- Health, wellness and safety
- Training and development
History and Purpose of DEI
Until the 1920s the workforce was made up mostly of White males until women slowly began to enter it. Most Black Americans during that time were segregated to work in the service industry. In 1948, discrimination based on race, color, religion or national origin became illegal for armed services members. The Civil Rights Act of 1964 made it illegal for any business to practice discriminatory hiring and firing processes and in 1987, Hudson Institute published Workforce 2000 which claimed that the workforce of the future would no longer consist primarily of white males and the “diversity industry” was born.
The reason so many companies are now beginning to implement DEI initiatives is because they understand that in order to unlock their full potential, DEI is key. Diversity, equity and inclusion are critical elements of a successful, productive, healthy culture as well as gaining a competitive business advantage. While having a business case for DEI is important, it also a moral issue and serves as a way to finally stop wide-spread, systemic racism and discrimination. A successful DEI program brings not only awareness to a society filled with racism, sexism and discrimination, but finally starts to make positive changes towards a fair and just world, leading to benefits for everyone.
Why doesn’t DEI fit under HR?
DEI is a business strategy, not just an HR strategy. While a big part of it overlaps with HR and operations, it must encompass the entire organization for it to make real changes and be successful. DEI and HR absolutely go hand in hand on several aspects. Diversity recruiting and hiring as well as equity and fair pay falls under the HR department. Inclusion is also something that HR is responsible for championing as well as following through on specific initiatives. But these are not the only things that DEI programs need to be successful.
If the responsibility of DEI falls solely on HR, it will be difficult to integrate it into the entire culture. It must be reflected in every department. Just like managers are responsible for hiring and managing their teams with HR oversight to ensure accountability, DEI needs to oversee these efforts at every level in every department to ensure they are upheld.
While HR is trained on the Americans with Disabilities Act (ADA), do they know about neurodiversity or invisible and hidden disabilities? Are they aware of microaggressions, biases and systemic racism? Do they know how to stop it? Do they understand tokenism? They may do an excellent job of finding diverse talent that the company uses as their tokens to give the appearance that they are embracing diversity. But really these “tokens” are struggling due to underlying racism, discrimination and exclusion. HR may have limited knowledge of how to handle this and without the expertise and work of DEI professionals, this discrimination will continue.
Where does DEI fit within an organization?
While there is a real want and need for DEI programs, multiple studies have shown that there have been very few, if any, successful initiatives. Companies tend to either hire a role such as a program manager, manager or director of DEI and throw it under HR or hire a Chief Diversity Officer with extremely limited funding. The good new is that when executed right, a DEI strategy can be very successful and create significant business results.
DEI needs a seat at the executive table and it needs to be treated with as much funding, importance and respect as other departments. A successful company is not likely to succeed without their marketing, finance, engineering or human resources departments. The DEI department should be looked at in the same light.
The DEI department is just as important as the customer service and success, product design, engineering, finance, marketing, and communications departments. It is a crucial part of executive decision making as it’s a major initiative that requires its own knowledgeable team. Just like marketing, engineering and recruiting keep up with current trends and innovations, DEI does the same.
Many departments have their own metrics and KPIs that they use to measure success and they are held accountable to them. With DEI being its own department, they are able to focus on metrics and KPIs in order to ensure accountability of DEI efforts. Most organizations usually say that sustainability is their biggest problem. A separate DEI department would be able to hold everyone accountable and sustain a successful, prosperous diversity, equity and inclusion program.
Diversity, equity and inclusion is not the sole responsibility of human resources. It must be implemented company-wide and be a part of the greater culture of the entire organization. Each department plays a part in ensuring the success of their DEI programs and goals but needs to be held accountable and it needs to be sustained. The only way that this will be able to be achieved is to have an entire funded department dedicated to it with a spot at the executive table. When everyone is participating in DEI measures and being held accountable the company is much more likely to succeed.