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Our research shows that companies’ DEI efforts matter to employees. In fact, demonstrating a commitment to social responsibility may be the key to employee satisfaction.

Abigail Matsumoto

January 21, 2022 | 6 min read

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When it comes to diversity, equity, and inclusion (DEI) efforts, companies need to drive change and act on their purported values—because research shows that employees are watching. 

For companies fighting to retain employees in the face of the Great Resignation, that lens of internal accountability is critical. There's been significant research on how diversity is good for a business’s bottom line; according to McKinsey, companies with ethnic and cultural diversity outperform by 36% in profitability. But the flipside of profits is the people who drive them, the employees who keep business moving. 

Our research studies paint a clear picture: companies' DEI efforts matter to employees, and demonstrating a commitment to social responsibility may be the key to employee satisfaction. If companies’ stated values don’t match their actions, they risk being perceived as hypocritical, deceptive, and out of step with the true employee experience.

In an era of CEO activism and increasing calls for companies to take a stand on current events, some questions linger about whether such actions are appropriate or welcomed by the world. Our data shows that most employees are all for it. A full 60% of employees¹ want to hear business leaders speak up about social and political issues—which indicates that workers expect executives to skip the sidelines and lead by example. 

This is in keeping with how employees’ value DEI, with a majority of workers (62% overall) saying that they consider DEI to be an important factor in their company’s ability to drive success. However, only 48% of C-level executives said the same, and almost half actually went so far as to say that DEI is “a distraction from our company’s real work”².

This disconnect between workers and business leaders is telling. Leaders, especially those in industries that are hard hit by the Great Resignation, need to view DEI initiatives as business initiatives. Failing to recognize the importance of DEI or to step up as a leader who values social responsibility may have a devastating effect on employee retention and engagement. 

Given that so many employees believe that DEI plays a role in their company’s success, it shouldn’t come as a surprise that a large majority of the workforce (78%) says it’s important to work for an organization that prioritizes diversity and inclusion, including 58% who say it’s “very important”. 

In fact, employees’ perception of their company’s DEI efforts has a major impact on their job satisfaction. We found that workers who said their company is “not doing enough” to prioritize diversity and inclusion only scored 63 on our April 2021 Workforce Happiness Index. In contrast, both those who said their company is doing “about the right amount” and those who said their company is “going too far” on DEI issues achieved a much higher score of 75¹. 

Workers who said their company is not doing enough work on DEI had lower scores for every component of the index calculation, and their self-reported satisfaction was particularly low in a few significant areas. Only 60% said they are paid well for the work they do, compared with 80% of workers who think their company is doing about the right amount of work on DEI and 82% of workers who think their company is doing too much to address DEI issues¹.

Additionally, just 42% of workers who believed their company is falling short of its DEI efforts said they have good or excellent opportunities to advance their career at their company, compared with 65% of workers who think their company is doing about the right amount of work on DEI and 68% of workers who think their company is doing too much to address DEI issues¹.

Dissatisfaction with pay or opportunities for advancement have long been dealbreakers for employees, but the relationship between job satisfaction and DEI deserves some spotlight. As record numbers of people continue to leave their jobs, companies must consider the ramifications of not following through on DEI. It’s not enough for an organization to say it values diversity and inclusion; it must prioritize initiatives in meaningful ways, keep DEI promises, and create a culture where employees’ contributions are valued. 

Prioritizing DEI within your company is a long term commitment, so there are no quick fixes. However, there are many ways you can begin to elevate initiatives and demonstrate to employees that you are striving to embed diversity, equity, and inclusion throughout your business. 

In 2020, after the murder of George Floyd, American businesses pledged to spend $50 billion on racial equity, but ended up spending less than 1% of what was promised. The good intentions were there, but the follow-through was not. 

By treating diversity, equity, and inclusion like other business initiatives, companies can hold themselves accountable for their failure or success. Make sure your social initiatives have specific objectives and quantitative results—just like any other corporate project—and that you share and discuss those results with your team.

Many companies focus solely on recruitment diversity instead of also looking for ways to create a more inclusive company culture. At Momentive, we evaluate our diversity, equity, and inclusion efforts by combining employee sentiment data with HR data on representation, pipeline, and progression. This approach helps us understand how different factors impact employee engagement, retention, and performance—and get a more nuanced view of DEI within our organization.

Our research has found that 89% of IT decision-makers said they would stop purchasing from a vendor if that vendor made a business decision that conflicted with their organization’s values³. You can commit to this type of thoughtful partnership at every level of your organization. For instance, many of the world’s leading tech companies have joined Momentive in the supplier diversity initiative. The purpose of the pledge is to support underrepresented leaders, prioritize inclusive suppliers, and treat vendors not as a means to an end, but with reciprocity and interdependence. 

The best way to find out if employees expect more from your DEI initiatives is to ask. How do they perceive your progress? What changes do they want to see? Are they eager for more opportunities related to mentorship, employee resource groups, or cultural celebrations? Find out how you can do more to “walk the talk” of your DEI values by taking action based on employee feedback. 

¹Methodology: This Momentive study was conducted Apr 8-18, 2021 among a national sample of 8,233 adults. Data were weighted for age, race, sex, education, and geography using the Census Bureau’s American Community Survey to reflect the demographic composition of the United States.

²Methodology: This Momentive study was conducted between June 23-28, 2021 among a national sample of 6,725 workers. Data were weighted for age, race, sex, education, and geography using the Census Bureau’s American Community Survey to reflect the demographic composition of the United States.

³This Momentive study was conducted July 26, 2021 among a sample of 252 IT decision makers. Respondents for this survey were selected from the more than 2 million people who take surveys on the platform each day.