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  1. Blog
  2. Diversity
  3. February 1, 2023

Defining Diversity, Equity & Inclusion (DEI): The Terms + Why They Matter Now More Than Ever

Even in economic downturns, it’s important to put DEI first

Diversity, equity, and inclusion design
Photo courtesy of Thomas Renaud

Diversity, equity, and inclusion (DEI) is a term we’ve seen pop up frequently over the past three years. 

Corporate America first began using DEI as a term in the 1960s, as a result of the anti-discrimination legislation of that decade—the Equal Pay Act of 1963, Title VII of the Civil Rights Act of 1964, and the Age Discrimination in Employment Act of 1967. 

The term, and concept as a whole, became more mainstream, spiking in 2020 following the murders of George Floyd, Breonna Taylor, and Ahmaud Arbery.

The subsequent police brutality protests gave rise and momentum to the Black Lives Matter movement, and many major companies began to openly denounce racism and vow to address issues within their organizations. For example, Netflix took to social media to reaffirm their stance against racism and throw support behind their employees and DEI programming.

In conjunction with the Black Lives Matter protests, the number of postings for new DEI positions skyrocketed. Reports show DEI job postings rose by 123 percent between May and September 2020. And in June 2020 alone, more than half a million LinkedIn members and over 100,000 companies created a diversity and inclusion post

While DEI positions and programs took off across America in 2020 and 2021, progress began to stall in 2022. With employers looking for ways to reduce costs to prepare for a possible recession, 18 percent of companies reported they decreased their investment in DEI in the past year. Tech industry layoffs have especially had a devastating impact on diversity and inclusion departments. At Twitter, the DEI team is down to just two people from 30, one former employee said.

But now (or ever, for that matter) isn’t the time to cut DEI programs.

Job seekers care deeply about seeing DEI initiatives be a priority—53 percent of employees are unlikely or very unlikely to stay with a company that doesn’t have visible and measurable engagement with diversity, equity, and inclusion, according to our data. 

Let’s break down what diversity, equity, and inclusion mean—individually and collectively—and learn why DEI is so important for employee retention and belonging. 

Read more: 13 Must-Have Inclusive Workplace Practices

Defining diversity, equity, and inclusion

Diversity, equity, and inclusion are grouped together because of their interconnected nature—they can only have a real impact when working in harmony with one another. Without diversity, there’s no case for equity, and without equity, there is no such thing as true inclusion. 

Here’s what each term means. 


Diversity means your company is made up of people with various racial, ethnic, socioeconomic, and cultural backgrounds, as well as different lifestyles, interests, and thought patterns. Having a variety of perspectives in your workplace is imperative for success and innovation. 

McKinsey & Company shares some examples of how to gauge diversity in your workplace:

  • Gender and sexual orientation diversity: Is your workplace composed of a variety of genders and sexual orientations? Is the LGBTQ+ community represented?

  • Age diversity: Are employees mostly from one generation, or is there a mix of ages?

  • Racial and ethnic diversity: Do employees come from different national origins and represent a variety of races? Do employees have different cultural or religious backgrounds and traditions?

  • Physical ability and neurodiversity: Are the perspectives of people with disabilities accounted for?

When you lack diversity in these areas, your business suffers. For example, homogenous teams often engage in groupthink, an issue where your team makes a unanimous, questionable decision with no dissenting views ever considered or discussed. It strains innovation and encourages the status quo, creating weak points in a company as some issues go unacknowledged and some ideas unconceived. 

“If you have an office full of white people, whatever products that come out of that office are more likely to be geared more toward white people,” says Alex Harris, a manufacturing engineer and fundraising chair for the National Society of Black Engineers. “The less diversity there is in a workplace environment, the more likely major design flaws will be present that only affect people of color.” 

To bolster diversity in the workplace, hiring managers should engage in inclusive hiring practices. For example, anonymous hiring allows candidates to remove demographic information—gender, ethnicity, race, education level, graduation dates, headshots—from their job applications. By removing identifying information from applications, hiring managers can  better avoid possible biases and discrimination and focus on what really matters: whether a candidate is qualified for the job.

Hiring managers can also ask and avoid certain interview questions. Hiring for “culture fit,” for instance, can lead to discrimination and a lack of diversity. To avoid this, managers should be aware of questions that imply a bias (like “Where’s your favorite place to travel?”), understand that everyone communicates differently, and ask questions about mindset (like “Tell me about a time when persistence paid off for you”). 

Read more: The Difference Between Overt & Covert: Recognizing Hidden Systemic Racism & Sexism


Oftentimes, the terms “equity” and “equality” are used interchangeably. The words sound similar—and share etymological history—but differ in key ways. Equality provides the same resources to all, assuming everyone has the same needs, but equity involves providing resources tailored to each individual’s needs and making space for everyone to share how they work best.

Disability justice advocate and consultant Lydia Brown shares a contextual example of what equity might look like in policy. She says equality could mean an office building has one door with stairs that everyone can use to enter and exit—no one is treated differently. But equity requires considering everyone’s needs and abilities, so, for example, someone who uses a wheelchair or someone who’s eight months pregnant might require use of a ramp. While it’s not equal treatment for some people to use a ramp and others to use stairs, it’s the equitable treatment that’s necessary for everyone to show up safely and do their work.

Basically, an equal approach to all employees doesn’t always take into account the intersectionality of each employee’s experience and identity. Equity is necessary for every type of identity in a person—from gender to ethnic background to religion. 

What does equity look like in policy? For starters, flexible work options. Truly equitable companies provide plenty of paid time off, sick leave, flexible work schedules, remote options, and paid family medical leave to support working parents, disabled employees, employees who are caretakers, and many others. A mother to a child with epilepsy may need more flexible working hours than another employee without children, for example. 

We also asked women what types of initiatives would most improve their company’s efforts to address racial equity. According to the survey data, the top three answers were better management training (23 percent), more diverse hiring practices (22 percent), and widespread cultural sensitivity and bias training (21 percent). 

Read more: Equity vs. Equality: What’s the Difference in the Workplace?


Inclusion involves creating a workplace where all people—regardless of gender, race, sexual orientation, religion, disability, age, and socioeconomic background—are welcome, respected, and have access to equal opportunities.

Inclusion consultant Kryss Shane explains it this way: “Inclusion is the intentional existence of space for those who are unlike you, with the awareness that the differences are beneficial to the experience.” 

It doesn’t mean incorporating marginalized employees into a dominant workplace culture, but rather creating the space for every employee to exist comfortably in their own unique manner. Inclusion is successful when all employees feel safe, accepted, and respected.

Inclusion in the workplace looks like: 

  • Offering and encouraging flexible work hours, remote work, and adequate paid time off

  • Providing floating holidays so employees can observe important cultural and religious days

  • Making meetings and presentations accessible to employees with hearing and vision impairments or those who are not fluent in the dominant language 

  • Offering transportation stipends or reimbursement programs 

  • Eliminating gender-based or racially discriminatory dress codes

  • Never assuming someone’s pronouns and honoring everyone’s chosen pronouns 

  • Creating feedback channels for employees to report misconduct, harassment, abuse, and inappropriate behavior and a reputation for following up with those reports

Why is DEI important and necessary?

The trio of diversity, equity, and inclusion is integral for a great workplace. Implementing DEI initiatives is simply the right thing to do. And it’s essential for building a sense of belonging for employees. Feeling confident and comfortable at work is necessary for employees to perform well—a high sense of belonging in the workplace is linked to a 56 percent increase in job performance and a 50 percent drop in turnover risk.  

And research also shows a clear correlation between diversity and business performance. 

The business case for diversity is strong—companies reporting the highest levels of racial diversity bring in almost 15 times the sales revenue of companies with the lowest levels of diversity. Diverse management has also been shown to increase revenue by 19 percent

Similarly, companies in the top quartile for gender diversity on executive teams are 25 percent more likely to have above-average profitability, and both company profits and share performance can be almost 50 percent higher when women are well represented in senior leadership. Plus, research has proven diverse teams develop more innovative ideas.

There’s also a correlation between inclusiveness and happiness on the job. Of employees who say they work in an inclusive culture, 81 percent also say they are happy in their jobs—three times more than those who don’t feel included. 

And the real full-circle kicker? Diverse teams are more likely to take action on prioritizing DEI efforts. More than 50 percent of senior-level women say they consistently take a public stand for gender and racial equity at work compared to their male counterparts. 

Diversity, equity, and inclusion is the glue that’s necessary to hold an organization together. Now more than ever, it’s time to invest in making it a top priority. 

Read more: 28 Reasons Why Diversity at Work Matters

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