DE&I stands for Diversity, Equity, and Inclusion. DE&I is a broad term that describes how companies welcome various groups of people within their organization. The Diversity portion of DE&I refers to representing individuals from different races, ethnicities, sexual orientations, genders, ages, and religions. To increase the amount of diversity in their employee base, companies should seek to reduce hiring bias as much as possible.

The Equity part of DE&I ensures that all programs are designed in a way that gives everyone the same potential to achieve outcomes. Equity typically comes into play regarding recognition, rewards, compensation, and promotion cycles. Inclusion, the final component of DE&I, is about promoting a sense of belonging at work. Employees need to feel connected to a company’s mission, form solid relationships with their peers, and feel like they are in a safe and secure environment in order to do their best work.

DE&I initiatives are important, not only for moral reasons but because they also lead to higher functioning teams that are more creative and drive better company performance. McKinsey found that the most diverse companies are more likely to outperform less diverse peers on profitability and that greater representation correlated to higher outperformance. And it makes sense一diverse, equitable, and inclusive cultures improve communication between teams, increase trust, boost engagement, and improve morale, all things that ultimately contribute to a company’s bottom line.