Biden Signs Executive Order Boosting Equity and DEI Standards

On February 16, 2023, Biden signed the Executive Order for Further Advancing Racial Equity and Support for Underserved Communities Through The Federal Government. The Order seeks to build on previous initiatives to improve equity through federal funding. This legislation is a cornerstone of Biden's overall initiatives toward improving equity and DEI within the United States. 

Continue reading to learn more about the newest Executive Order and how it could impact HR professionals within the private sector. 

Refresher: What Is DEI?

Diversity, equity, and inclusion (DEI) refer to organizational policies that encourage a diverse workforce. They are put in place to create a safe environment for all representations, including race, ethnicity, gender identification, age, culture, religion, and those with disabilities. 

Understanding the Executive Order

When Biden first entered office on January 20, 2021, he wasted no time in signing Executive Order 13985, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government. The Order set out to emphasize measures to improve societal equity. Each government department and agency would need to address inequities within its own policies and forge programs to encourage equal opportunity for all. 

This Order would provide black universities and indigenous peoples funding to cull racial inequalities in the workplace and job opportunities. 

On February 16, 2023, President Joe Biden signed an Executive Order to further advance racial equity and support for underserved communities through the federal government.

The order directs federal agencies to take a range of actions to promote equity and inclusion in their programs and policies. They must form their own Equity Action Plans each year. Action plans will allow underrepresented communities access to programs and services to help build greater equity. One example of this is that federal agencies will now need to hold frequent meetings in underserved communities to discern opportunities for funding.

The Executive Order also promotes diversity and inclusion within the federal workforce, directing agencies to take steps to recruit and retain a diverse and talented workforce and to create inclusive workplaces that support the full participation and engagement of all employees.

Promoting equity and inclusion across the federal government will help address long-standing disparities and ensure that all Americans have access to the opportunities and resources they need to thrive. This includes improving access to quality healthcare, affordable housing, and economic opportunities and promoting greater diversity and inclusion in the federal workforce.

What Does The Order Mean For Employers?

Research shows that by improving diversity within the workplace, organizations can boost employee morale, improve customer service, and increase sales. For example, a study by Catalyst found that companies where women held at least 20% of management roles, saw a 2.04% increase in cash flow returns. 

Similarly, a McKinsey & Company study found that organizations in the upper quartile of gender diversity were more likely to surpass profitability and that companies with gender-diverse executive teams were 25% more likely to exceed profitability. 

DEI has the potential to impact your workplace in ways beyond hiring. It can help your organization to be more profitable and provide more effective solutions. 

Though the newest Executive Order does not directly impact the private sector, it does signal a continuing societal push for greater equity and inclusion, which means that organizations offering robust DEI strategies will likely remain competitive in the marketplace. 

Pursuing greater DEI strategies may still be an uphill battle for some HR Professionals whose organizations are still hesitant to allocate excess resources toward improving it. LinkedIn recently pointed out the fact that within the entire history of the Fortune 500, there have only been 24 black CEOs. SHRM-SCP, Joy Johnson-Carruthers comments on this as well: 

“The numbers don't lie. We still have much work to do in the DEI space. This is another example of existing disparities.”

Alex Draper, Founder & CEO of DX Learning, discusses the psychological openness of organizations and their teams. He uses a quadrant to illustrate the environments that teams create and how effective those are at promoting inclusion and diversity. He says: 

“A psychologically safe team is utopia. The team performs above expectations while learning and growing. Due to being able to speak up, burnout and stress are minimized, and people can air any concerns about DEI, cultural challenges, and mistreatment before it becomes a real problem.”

When teams are closed off or neglect the opportunity to implement inclusion strategies, it leads to an anxious workplace. This leads to lower productivity and increased stress and burnout among employees. Leaders must hold employees accountable and create clear expectations and an openness to new ideas, thoughts, and opportunities. 

HR pros should keep psychological safety in mind while seeking resources for DEI initiatives. It begins with leadership and must remain an ongoing initiative, ready to adapt as data is determined and resources are made available. 

Additional Resources

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