Category: Learning and Development

The “business case” for DEI is, and probably always will be, a hot-button topic. Despite proof that there is a direct relationship between DEI, innovation, and financial results, business leaders are still not giving DEI the investment it deserves. 

In 2021, the Washington Post asked U.S. companies, which had promised a total of $49.5 billion to diversity programs, how much they actually spent. It received responses confirming less than 4% of that amount — $1.7 billion.

Business leaders often forget that people programs solve a pressing business issue. And one that long predates the pandemic and hybrid work: when employees don’t feel a sense of belonging at work, they check out. They don’t learn, they don’t contribute, they don’t stay. 

The cost associated with attrition is enormous — today, it’s nearly $350 billion a year! And a big share of that cost is directly related to a lack of inclusion and belonging. Sixty percent of employees who left their companies in the last year did so because of a lack of inclusion and belonging. 

Breaking down the business case for DEI

At Praxis, we get this question from our partners every day. What’s the business case for DEI? What’s the ROI? We love this question. Because when companies launch DEI programs with intention, the results speak for themselves.

To confront the ROI question head-on, Praxis called on our in-house experts to discuss the latest trends in DEI, ways to maximize ROI, and proven methods for improving employee engagement and experience. 

In our most recent webinar, called “Proving the Value of DEI Training: Measuring Impact and ROI,” Dr. Olivia Holmes (Curriculum Measurement Lead) and Sabrina Rønningen (Head of Client Impact) draw on a wealth of experiences working with Fortune 500 clients to show what DEI success looks like.

“The typical assumption is that having diverse employees means, inherently, that you’re able to capture more market share and perhaps expand productivity. This is true, but we’ve found it’s an incomplete narrative. What really does work is focusing on those levers that drive inclusion, belonging, and engagement.”

The answer to unlocking those levers, Rønningen explains, is data.

“When businesses have the appropriate data to know how and where to focus action, companies see increased success and innovation,” she explained.

Looking at recent data on what’s motivating DEI performance today, Praxis’s team identified the following trends:

More cross-functional partnerships

“Talent leadership is starting to take new shape, becoming more cross-functional. DEI departments are working closer with L&D, realizing that it really takes a cohesive effort” said Rønningen.

With 83% of organizations looking to build a more people-centric culture this year, and human skills singled out as a key priority for L&D teams, cross-functional departments are a must.

“We can’t expect to keep doing the same things every year, the same type and nature of programming and skills development, and expect a different result. Working across functional leadership within the talent team is a key takeaway,” said Rønningen. 

Be clear about what your business is trying to accomplish with learning

“Make sure you’re crystal clear from the start of every learning program how you’re connecting learning to the business,” said Rønningen. 

This ensures employees don’t feel their time is being wasted or that their learning is happening in a silo. Learning needs to be contextually relevant and be directly applied to employees’ day-to-day. Dr. Holmes recommends narrowing the focus of impact measurement to acquired competencies (or skills learned) and knowledge retention. 

Tracking skills gained alongside productivity and culture surveys directly show how your programs led to company success. 

Embrace the latest tech — or get left behind

Don’t be afraid to embrace the latest tech when upskilling your teams. Immersive L&D solutions increase confidence in skills application by 275%. This is because they’re designed to capitalize on knowledge and research about how people learn. When learning is done well, companies see positive results. 

“With one of Praxis’s clients, a Fortune 100 company, we saw that employees were +15% less likely to look for alternative jobs and +8% more motivated,” said Ronningen.

The changes in behaviors are also telling — “One of our earliest clients, a Fortune 500 Tech company, saw that even 8 months after training, over half of employees noticed changes at all levels of their org, including management and leadership” said Rønningen.

Partner for success

In the past decade, we’ve seen work spill beyond the office and become not just an extension of, but a primary expression of, our values and identities. In order to sync our work with those values — inclusivity and equity chief among them — we need to focus on our behavior and how it promotes (or inhibits) collaboration. This is true both within an organization’s teams and its external partnerships.

For many organizations looking to improve L&D, DEI and engagement, partnering with outside experts is the right choice. They have the resources and expertise to design and implement a forward-looking solution for the company. That frees up time for company leaders to focus on managing the day-to-day. And they can adapt the approach to stay up-to-date with the latest trends. This approach minimizes stress and maximizes results.

According to a report by McKinsey & Company, companies with DEI training see increased employee satisfaction and outcompeted their competitors by 36%.

“Recognize and settle into great partnerships and integrate them into that role you have,” recommended Rønningen.

Real change takes time

Creating a vibrant, inclusive company culture takes time. But prioritizing your people’s learning and development will generate trust and goodwill fast.  

“One of the best ways to support behavior change is to build knowledge, skills, and practice to help people deeply understand how to collaborate and work across differences, and to inspire psychological safety. This is the only way to inspire peak performance across teams” said Rønningen. 

Layoffs can be an unfortunate reality for businesses forced to adapt to unfavorable market conditions. But at a time when the importance of empathy in the workplace is most critical for leaders, some companies are electing to do the opposite; from entire departments being laid off in a Slack message to hybrid policies being replaced with “hardcore” return-to-office plans.

Coupled with the stories of layoffs in Big Tech, impacting 70,000 workers this year, these reports sent shockwaves across the global economy. And not because they foreshadowed a recession of apocalyptic scale. The surgical approach these companies took to reducing headcount, characterized by short-notice communications and shaky rationale, confused workers and made company leaders appear untrustworthy.

Their approach signals that one of the modern workplace’s widest skill gaps, empathy, needs addressing now more than ever.

Slashing wellness benefits and DEI programs during economic downturns might save money in the short-term, but ultimately will end up costing more in the long run.

Weathering tough times with compassion

A growing body of evidence supports the importance of empathy in the workplace. Empathetic leadership is crucial to a company maintaining high levels of engagement, retention, innovation, and productivity. In the absence of this kind of leadership, workers tend to look for employment elsewhere. 73% of employees are considering leaving their jobs for other positions. Of those, 74% would consider accepting a pay-cut for the right role. This suggests that their search is motivated by factors like growth opportunities, exciting work, flexibility in their schedules, and cultures that support well-being and belonging, in addition to better pay.

Our current market climate and employee needs begs the question: how can employers deliver on a winning employee experience that makes people want to stay? It starts with compassion and trust.

A 2023 Workhuman Workforce Trends report found that almost half of workers today feel undervalued. And over half of workers believe their organization’s leadership would lie to employees if it would benefit the business. At a time when there’s stress and uncertainty around job security, how companies navigate cutbacks and layoffs will determine employee trust in leadership going forward.

Fortunately, empathy is a skill leaders can learn. Making a conscious effort to build empathetic leadership among executive teams and people leaders is a great start toward building lasting trust. Here are steps you can take:

Focus on employee experience and retention

There is a real risk for businesses that undervalue the importance of empathy in the workplace. When the pendulum of the labor market swings back in employees’ favor, they will likely leave for companies that held on to their ESG and DEI commitments. 

Companies charting out their employee engagement strategies for the remainder of 2023 should be advised: now is not the time to walk back commitments to employee experience and DEI, especially without consulting your employees first or providing adequate transition support. It could be your costliest mistake. Research by SHRM suggests that for each employee who quits, the cost to the company could be 50% – 250% of that person’s salary.  

Even if you’re not anticipating having to make cuts this year, you can still take steps to encourage an open, honest dialogue with employees who are feeling anxious about economic headwinds.

Listen to your people 

Decisions that impact your employees day-to-day lives should generally be arrived at collectively, with their input considered. 

Earlier this month, Disney mandated a 4-day in-office policy that met considerable pushback from employees. Employees issued a petition that the new policy is “likely to cause long-term harm to the company” and will “lead to forced resignations.” The petition received over 2,300 signatures, many of them from working parents. One employee told the Washington Post that workers were feeling “betrayed.”  “Workers feel like they did a really good job of demonstrating trust and showing up during the pandemic,” he said. “Coming back to the office through a mandate seems punitive, and it certainly isn’t something most workers were consulted on.”

This blow to morale and company trust could have been mitigated had Disney’s leaders been transparent (i.e. provided data-informed rationale for the change) or taken actions that showed empathy and a commitment to collaborative problem-solving.

Most recently we’ve seen this kind of empathetic leadership attempted at Zoom: Following an announcement of a 15% staff cut, Zoom CEO Eric Yuan pledged to take a 98% pay cut and forgo his bonus. Intel CEO Pat Gelsinger did something similar to offset layoffs (albeit at less of a personal cost). Do these small tokens of solidarity compensate for the thousands of jobs lost? No. But they show leadership is invested in preserving its workers’ good-will and trust in leadership.

Continue to invest in tools for empathy education

Despite significant evidence that DEI is considered a top priority by key stakeholders, a recent report showed that when companies need to cut costs, HR and DEI programs are among the first to go. Categorizing these necessary HR functions as “nice to have” rather than “need to have” only calls company leaders’ empathy into question.

How company leaders understand (or don’t understand) the importance of empathy in the workplace sets the standard for an entire organization. Leveraging the perspective-taking power of immersive technologies is one proven way to ensure your people have the resources they need to become effective, empathetic leaders. 

When learning is paired with opportunities for open and honest discussion, you ensure that grievances don’t go unspoken. When employees see leaders making an effort on this front, they are more likely to see them as trustworthy.

One of our learners shares, “More conversations around DEI are happening and people seem to be genuinely excited to keep the conversations and actions going. It’s evident that it’s important to the organization, which is awesome.” When employees see their leadership is committed to building a people-centered culture, retention soars. More than half of our learners express that they are more likely to stay at their company because of Praxis Labs training. 

The importance of empathetic leadership in the workplace

We can never know for certain whether tough times are coming. But we can better prepare ourselves for when they do. Empathetic workplaces that encourage open and honest conversation, active listening, and cultures of learning and growth, are the best positioned to stay resilient during turbulent times.

Reading about current workplace trends — like Quiet Quitting and the Great Resignation — it’s clear that people are unhappy at work. These phenomena are a wakeup call for business leaders to do something different. 

Luckily, there’s a treasure trove of inspiration from companies who are getting it right. Among companies who are boasting high levels of retention and engagement, one theme is clear: empathetic leadership. 

Why empathetic leadership, why now?

For one thing, several recent studies and reports have shown that employees care about it. They care about it a lot. 

The Society for Human Resource Management (SHRM) surveyed nearly 2,500 U.S. workers and found that a whopping 97% believe empathy is an essential quality of a healthy culture. More specifically, 92% say that when looking for a job they value organizations that demonstrate empathy.

In our current volatile talent market, empathetic leadership is more important than ever. You’ve likely read about workers leaving their jobs and even entire industries in droves (this has been referred to as the Great Resignation or the Great Attrition), as well as the phenomena of quiet quitting. To illustrate this recent trend of employee dissatisfaction, studies show that the voluntary quit rate is hovering at 25 percent higher than at pre-pandemic levels.

Based on SHRM’s report, it’s easy to see why people are seeking greener pastures. Over half of respondents believe their organization’s leadership would lie to employees if it would benefit the business. Over a third claim to have witnessed inconsiderate or insensitive treatment of a co-worker by a manager in the past year. And, according to Gallup, only 28% of employees strongly agree that their organization is fair to everyone

Empathetic Leadership is the Key to Retention

Companies are competing for talent in ways they never had to before.

According to a recent McKinsey report, there’s a disconnect between why employers thought people were quitting and the reasons people actually gave. Employers named things like compensation and work-life balance, while employees cited factors like not being valued and uncaring or uninspiring leadership. 

These types of cultural and human factors are especially important to younger generations. Millennials and Gen-Z in particular value inclusivity and diversity more highly than other generational groups. 

These trends go beyond retention. A growing body of evidence indicates that empathetic leadership is crucial to a company maintaining high levels of engagement, retention, innovation, and productivity. Empathetic organizations promote positive workplace relationships, encourage collaboration, and foster diversity, equity, inclusion, and justice (DEIJ). 

For organizations to reap the benefits of an empathetic workforce, it needs to start at the top. Read on below for tips business leaders can take to prioritize and build empathy. 

How Can Leaders Build Workplace Empathy?

Fortunately, empathy is not necessarily something you’re born with — it can be developed and learned. Making a conscious effort to build empathetic leadership among executive teams and people leaders is a great start. Here are three ways L&D and DEI teams can build empathy as a core leadership skill:

1. Harness the power of perspective-taking:

Leaders should make a conscious effort to understand and imagine what it is like to experience the world as someone other than themselves. The benefits are even greater when leaders encourage all employees to do the same. When building empathetic leadership at scale, immersive learning technology can give you the upperhand. 

By understanding where someone from a different background is coming from, one can learn to respond to them in an empathetic way. This is especially important when an employee is bringing up something difficult or making a complaint. It is equally important when leaders are managing complex change management projects, or supporting their employees during global crises. 

2. Expand professional networks:

It’s hard to open yourself to ideas or perspectives when you’re always talking to the same people. Leaders, like most people, usually seek advice from their peers. And our networks tend to look a lot like we do. While you might get some great insights about business, it won’t help much when it comes to empathy.

Instead, leaders should make an effort to seriously and regularly engage with employees who are from different backgrounds. This can be done in a formalized mentoring (or reverse mentoring) structure, or in more informal settings like ERGs and lunches. When employees see leaders making an effort on this front, they are more likely to see them as trustworthy.

3. Create space for self-reflection:

Most managers do not realize they have a trust or empathy issue until it is too late. This is why they should practice checking in with themselves about how they are showing up in the world and leading at their company. 

Leaders should regularly review their company’s core values and reflect on how they embody them in their day-to-day. How might a junior employee answer that same question? Are others in leadership roles being held accountable? Is there an open dialogue of communication across company hierarchies? Is there a culture of cooperation and teamwork being fostered? Am I behaving empathetically? Am I someone people can trust?

All of these and more are questions that go beyond basic financial metrics that leaders should keep top of mind. When tied to specific measures, leaders can assess how they are progressing towards a more empathetic workplace. 

Empathetic Leadership Drives DEIJ

Leaders are viewed as role models by the entire organization. How they practice (or don’t practice) empathy sets a standard that can inspire behavior change and dedication to empathy from others. This can have a powerful ripple effect that can transform an organization, leading to significant gains in retention, cooperation, as well as in DEIJ initiatives that build trust and understanding across all employees. 

As Chantal Gaemperle, LVMH group executive VP of human resources & synergies said, “Understanding of the power of empathy is rooted in an important core value: people make the difference. As we create a truly inclusive workplace, empathy plays an important role in ensuring talent can come to work in an emotionally safe environment where they feel comfortable being their true selves.”

The idea of “immersion” has long captivated the imagination of Hollywood, with protagonists in popular titles like “The Matrix” and “Jumanji” using virtual reality to explore fictional environments like dystopian computer simulations and supernatural jungles, respectively. 

Since the turn of the millennium, technological advancements have brought Virtuality Reality/Mixed Reality (VR/MR) to the mainstream, with wearable goggle-like Oculus devices becoming increasingly popular among techies and gamers. Despite this widespread association with recreation and entertainment, many have also begun to realize the incredible potential of VR/MR technology to revolutionize education and skills development.  

This new type of “immersive” learning is quickly growing as a solution of choice for workplaces and schools alike. It’s become much more than just a flashy new toy, with stronger indicators of success than traditional e-learning or in-person classroom training. But what exactly is immersive learning and how does it drive more tangible DEIJ learning outcomes?   

 

What is immersive learning? 

Technically speaking, immersive learning spans virtual reality (VR), mixed reality (MR), augmented reality (AR), and 360-degree video. Learners access content through a VR oculus headset, mobile device, or web browser. Regardless of entry point, immersive learning tech works similarly by leveraging the power of ‘presence’ to create a truly experiential learning environment. 

What makes immersive learning deeply impactful is that learners navigate real-world experiences in a safe, simulated scenario where they can practice and learn from mistakes. 

Immersive learning is a tool that helps learners translate learning into action by building the memory and muscle needed to apply learning to real-world situations; ultimately creating a feedback loop that connects learning outcomes and business goals. This approach, which capitalizes on dedicated knowledge and research about how people learn has proven results, with research showing it can increase knowledge retention by up to 75%. 

While immersive learning can and should be applied to many types of skills development, it’s particularly useful for building core competencies for today’s modern workforce, such as empathy and inclusive leadership. Moreover, immersive learning is ideally suited to Diversity, Equity, Inclusion and Justice (DEIJ) training, about which much ink has been spilled, but unfortunately rarely moves the needle as it should. 

By harnessing immersive learning technology, there is immense potential in driving the self-awareness and understanding needed to propel tangible results for DEIJ. There are four key reasons why this is the case.

 

1. Empathy: Using VR to Build it in the Workplace

At its most basic, immersive learning allows learners to view and experience the world through a different perspective. They can experience the scenario-based environment from many sensory angles, which can blur the line between simulation and reality. This is where ‘presence’ comes in. 

It means that business leaders and DEIJ professionals can drive greater empathy and understanding across folks with different lived experiences, without burdening colleagues from underrepresented groups to share their personal experiences for the sake of educating others. These learners can then better understand the importance of — and place a greater emphasis on — respecting different perspectives. In turn, empathy lays a sturdy foundation that leads to stronger, more effective teams where all members are valued and appreciated.

There is a proven positive correlation between VR/MR technology and empathy, notably supported by a 2018 Stanford University experiment, where researchers found that those who participated in a virtual reality experience detailing what it’s like to be homeless made them more likely to support affordable housing than other participants in the study. 

In the workplace, once employees are able to feel themselves in the perspectives of colleagues from backgrounds different than their own, other aspects of DEIJ training fall into place.  Lessons are more easily translatable to real-world situations, and learners are able to approach those moments with greater confidence in how to act equitably and inclusively. 

 

2. Unconscious Bias Training: Seeing it “First-Hand”

A key topic addressed in nearly all types of DEIJ training is unconscious bias, which can be defined as an unfair belief about a group of people that you are not aware of and that affects your behavior and decisions. Biases are not always easily identified and may happen without awareness, which is why it can be difficult for some employees to understand and identify them. 

Immersive learning gives the learner the opportunity to see first-hand how unconscious bias affects employees. This form of perspective-taking can equip them with research-backed steps to overcome bias and build authentic connections.

For example, when white employees are shown how racism is experienced by their Black colleagues, or how able-bodied people are thrust into navigating the workplace as someone in a wheelchair, they gain a deeper understanding of what it feels like to be the recipients of unconscious bias. This creates an emotional connection, which is likelier to build memories and influence future behavior than more traditional types of e-learning or instructor-led training. 

 

3. Microaggressions: Using Roleplay to Achieve Solutions

Similar to unconscious bias, microaggressions can be direct or indirect forms of discrimination against members of underrepresented groups, and are also extensively covered in DEIJ trainings. 

Not only can immersive learning enable employees to recognize these microaggressions from the perspectives of colleagues from diverse backgrounds, it can also be taken from the perspectives of those complicit in or bystanders to moments of bias. Taking on these dual perspectives enables learners  to workshop solutions through roleplay and real-time feedback. 

Far more effective than simply listening to someone describe a microaggression, immersion puts the learner directly into the position of individuals on both sides of the incident. They can then practice navigating these tough situations through roleplay, going through the exercise — and potentially some tough conversations — as many times as necessary to feel comfortable, without fear of shame or embarrassment. 

Employees have the freedom to actually learn through trial and error how their tone, word choice, and even body language can have an impact on the given situation. Then, they can feel more confident in both recognizing microaggressions in the office, as well as understanding how to navigate them and achieve solutions. 

 

4. Ally to Advocate: How Immersive Learning Creates Cohesive Teams

As employees use immersive learning to build empathy for people of different backgrounds, identify unconscious bias, and understand how to navigate microaggressions, they also crucially create a foundation for a lifetime of allyship and advocacy. 

Allyship and advocacy are closely related, but there are important differences. 

Allyship denotes passive support in someone or a group in which the person has a vested interest, whereas an advocate uses their own privilege and platform to bring attention to injustice and affect change. Essentially, the line of difference is across passive support versus action. 

By immersing employees in potentially fraught scenarios, they can learn how to move beyond performative allyship and understand how to actually use their own position of power and privilege to affect change. 

For example, immersive learning environments may place the learner in a situation where a manager makes a discriminatory remark about a colleague. Learners then explore various scenarios about how best to speak up. This both empowers the employees and builds trust among team members, which can translate to better cohesion, retention, and efficiency in the company as a whole.

 

The Only Limit Is Our Own Imagination 

Not long ago, the concepts of virtual reality and immersion were squarely in the domain of science fiction writers and creative auteurs who used these abstract concepts to explore far-off and imaginary realms and identities. Now, we are able to harness this incredible technology for a very real and perhaps equally ambitious purpose: to create more equitable, inclusive and empathetic workplaces.

As VR and MR technology continues to rapidly advance and research continues to show its effectiveness in building empathy and understanding, business leaders are only limited by their own imaginations in terms of how it can be harnessed to drive real, tangible results for their DEIJ initiatives.