HR professionals are navigating a perfect storm of challenges in today’s workplace. The Society for Human Resource Management’s (SHRM) latest State of the Workplace report identifies the top three issues HR leaders are facing:
- Finding and Recruiting the Right Talent
- Retaining Top Talent
- Maintaining Employee Engagement
These challenges are exacerbated by widespread reports of HR teams feeling overwhelmed and understaffed. New research reveals over half (57 percent) of HR pros report working beyond normal capacity, with one in three in understaffed departments contemplating leaving their roles.
These staggering statistics underscore the urgent need for HR leaders to find innovative solutions. The answer may lie in an unexpected place: diversity, equity, and inclusion (DEI) initiatives.
In this post, we’ll explore how strategic DEI efforts can help HR teams tackle these pressing challenges, from supercharging recruitment efforts to boosting employee engagement. By the time you reach the end of this post, you’ll understand why DEI isn’t just a nice-to-have—it’s a powerful tool for solving HR’s biggest headaches in today’s complex work environment.
1. Challenge: Finding and Recruiting the Right Talent
In today’s tight labor market and uncertain economic climate, HR teams are under immense pressure to find quality candidates quickly while managing high application volumes, often with limited resources. The situation has become so critical that CEOs now rank recruiting as the fourth most inefficient business process, behind only emails, procurement, and meetings.
Addressing this challenge requires not just rethinking how we recruit but also redefining what we consider to be the “right” talent. Recruitment should extend beyond assessing technical skills to ensure we build a workplace where diverse perspectives can thrive. Research consistently shows that companies with diverse leadership teams—encompassing women and underrepresented talent—are significantly more likely to achieve above-average profitability. This inclusivity premium not only boosts retention but also enhances workplace dynamics and innovation.
Inclusive organizations’ recruiting also benefits. In fact, more than three out of four job seekers and employees report that a diverse workforce is an important factor when evaluating companies and job offers, underscoring the importance of DEI not just in business but also in attracting top talent.
So, how do we find this “right” talent to support this strategy? Employee referrals have long been recognized as a gold mine for quality hires. Research shows that referred employees outperform other workers, are more satisfied, and have higher retention rates. However, not all referrals are created equal. The most impactful referrals often come from individuals who are deeply connected to the organization’s mission and values.
This is where Employee Resource Groups (ERGs) come into play. ERG members, already committed to forming community at work and driving business success, are ideally positioned to provide high-quality referrals. Unlike referrals made solely for the monetary bonuses, ERG members are likely to recommend candidates who not only have the right skills but also align with the company’s culture and values.
An added bonus: ERG referrals come with a built-in community for new hires, with 90 percent of companies using ERGs to assist new recruits during the onboarding process. Remember, a sense of belonging can reduce turnover risk by 50 percent, meaning ERGs can help companies not only find and recruit the right talent but also set the stage for better retention. Learn more about the evolving role of ERGs in the workplace.
As HR teams assess recruitment strategies, they must consider how integrating DEI can elevate talent acquisition efforts and support a thriving organizational culture. By embracing DEI in recruitment, HR teams address the immediate challenge of recruitment while also contributing to long-term organizational success through improved retention, innovation, and profitability.
2. Challenge: Retention of Top Talent
Retention is equally critical to HR in today’s competitive job market. The costs associated with turnover are not just financial; they can also significantly impact team dynamics and company morale. To effectively address this issue, it’s crucial to understand why employees are leaving in the first place.
Recent studies paint a clear picture: Workplace culture plays a pivotal role in employee retention, with four of the top five reasons for leaving linked to culture. Notably, 51 percent of employees cite a lack of sense of belonging as a key reason for considering departure. These findings underscore the need for a holistic approach to retention that embraces DEI principles.
While DEI extends far beyond talent management and employee engagement, its emphasis on creating an inclusive organization has historically led to success in these areas. By advocating for well-being and fair treatment, DEI fosters trust, which in turn makes employees more likely to provide feedback and engage in positive change, helping companies address turnover issues early.
Oracle’s experience illustrates this point. The tech giant noticed a trend of losing diverse talent as quickly as they were being hired. Thanks to the DEI team’s open relationship with the organization, they gathered candid feedback about this exodus and worked on meaningful solutions. This valuable insight, often overlooked in standard engagement surveys, hinges on establishing trust that encourages employees to share their honest concerns.
This “cultural barometer” that DEI provides serves as an early warning system for broader workplace issues, helping leadership manage growing divisiveness. With two-thirds of workers witnessing or experiencing incivility in the past month and many doubting HR’s effectiveness in addressing it, DEI efforts such as comprehensive training, cultural competence workshops, and conflict resolution initiatives can proactively foster respect and understanding.
Integrating DEI initiatives into talent management strategies goes beyond just retention; it’s about fostering a culture where every employee feels respected and valued. With employees who witness discrimination nearly 1.4 times more likely to quit, creating an inclusive environment is essential. By proactively addressing workplace issues and nurturing belonging, organizations can tackle the root causes of turnover, ensuring that diverse talent is not just hired but retained and empowered to thrive.
3. Challenge: Maintaining Employee Engagement
Employee engagement is at a critical low, with the latest reports showing an 11-year low and 40 percent of employees feeling isolated at work. The impact is undeniable: Low engagement has been linked to 18 percent lower productivity, 15 percent lower profitability, and up to 37 percent higher absenteeism.
DEI initiatives, particularly ERGS, can play a pivotal role in addressing these challenges. Research shows that 66 percent of employees believe their ERG effectively fosters a sense of community, which is vital for successful employee retention, performance, and overall engagement.
This community-building aspect not only connects employees with their colleagues, but ERGs also create a safe space for open communication about employee needs and concerns, providing organizations with valuable insights into the needs of their workforce. This direct line of communication enables companies to address less visible factors that significantly influence engagement. For instance, employees needing accommodations for neurodivergent conditions may hesitate to express these needs through traditional channels, but they can feel more comfortable sharing their experiences and advocating for necessary changes within ERGs.
In addition to surfacing these challenges, DEI can help organizations implement targeted benefits and support systems that directly enhance employee engagement. For example, promoting flexibility for working parents and fostering cultural understanding within global teams are key ways DEI ensures that all employees, regardless of background or circumstance, feel valued and supported—an essential factor in driving engagement.
Addressing these diverse needs through DEI initiatives can lead to transformative results. Organizations with inclusive cultures are twice as likely to meet or exceed financial targets, three times more likely to be high-performing, six times more likely to be innovative and agile, and eight times more likely to achieve better business outcomes.
To realize these benefits, HR leaders should collaborate with experienced DEI practitioners. Each organization has its unique priorities and values, necessitating a tailored approach to DEI strategies. Experts like Seramount provide essential insights and personalized support to develop initiatives that resonate with your workforce, fostering an inclusive culture that drives meaningful engagement—and ultimately—business success.
Moving Forward: Embedding DEI into HR Processes
The challenges HR professionals are facing today are undeniably significant, but they also present an opportunity for transformative change. Investing in DEI is not merely a reaction to today’s pressures; it’s a proactive strategy that can enhance your organization’s resilience and adaptability in the long run.
By embracing DEI as a foundational element of our HR strategies, we can transform not just our processes but our workplace culture as well. This isn’t just about filling positions or keeping employees engaged; it’s about creating an environment where every individual feels valued and empowered.
Getting started can be tricky, whether your organization has its own DEI team or not. Seramount has successfully partnered with hundreds of talent and HR leaders to advance DEI initiatives and can support you with decades of research-backed and peer-experience insights.
Take the first step by checking out our free guide, Inclusive Talent Lifecycle: Talent Development, for strategies to build a more inclusive talent development program.
