The Role of Diversity, Ethics, and Inclusion in Strategic HRM.
In the modern society, Diversity, Ethics and inclusion have become essential factors of Strategic HRM. With the business expansion across the world, the talents and the cultures have become increasingly diverse. Accordingly, Strategic HRM professionals have identified that DEI is not just a compliance obligation, it is a strategic enabler of innovation, employee engagement and long-term business sustainability. According to the world economic forum study, they have mentioned that the companies which have DEI metrics have score over 45% of their revenue from innovation (People,2023).
SHRM is about aligning people management with long term organizational goals. This includes fostering a diverse and inclusive workplace that enable every employees to feel equal, thrive their opportunities and contribute to the work. Strategic HRM embeds these values into policy frameworks, leadership training, and organizational culture (Boxall & Purcell, 2016).
In my experience, working in a multinational team will lead the team into a more creative problem solving with diverse thoughts. When a diverse team have a supportive leadership, they will feel psychologically safe t contribute, which leads them for a higher productivity and satisfaction.
SHRM's Role in Embedding DEI.
SHRM includes DEI into the all stages of employee life cycle, starting from recruitment to retention and retirement. Here are some SHRM practices that embedding DEI into an organization,
- Inclusive recruitment strategies such as blind CV screening and having a diverse interview panel.
- Incorporate DEI into performance reviews.
- Hire diverse leaders as a part of a top leadership team.
- Create inclusive support networks by establishing employee resource groups(ERP). ERGs create safe spaces for employees from diverse backgrounds to connect, share experiences and provide support (Expert Panel,2025).
- Establishing DEI metrics, including representation targets and pay equity audits.
- Align DEI with organization's core value, systems and decision making processes.
In Sri Lankan banking industry, we can see several banks which has a diverse workforce such as HSBC bank and Standard Charted Bank. Not only these banks, with the changes in this modern society, many organizations in Sri Lanka has currently open their doors for the DEI strategy which has made drastic change in their usual work environment in a positive way. However, there are some banks and organizations which maintain their value and culture by not offering space for the DEI strategy as well.
References.
- Laker, B. (2025). Marriott Didn’t Blink—Why Retaining DEI Values Is A Strategic Advantage. [online] Forbes. Available at: https://www.forbes.com/sites/benjaminlaker/2025/04/24/marriott-didnt-blink-why-retaining-dei-values-is-a-strategic-advantage/.
- McKinsey (2023). Diversity Matters Even more: the Case for Holistic Impact. [online] McKinsey & Company. Available at: https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-matters-even-more-the-case-for-holistic-impact.
- Shrm.org. (2023). Getting DE&I Right: HR Leaders Share Practical Strategies. [online] Available at: https://www.shrm.org/topics-tools/news/inclusion-diversity/getting-dei-right-hr-leaders-share-practical-strategies [Accessed 25 Jul. 2025].
- Expert Panel (2025). 19 Strategies For Embedding DEI Into Every Aspect Of Your Organization. Forbes. [online] 6 Feb. Available at: https://www.forbes.com/councils/forbeshumanresourcescouncil/2025/02/06/19-strategies-for-embedding-dei-into-every-aspect-of-your-organization/.
- Beckham, A. (2025). The Future of DEI: Proven Strategies for Success in a Divisive Era. [online] Business Leadership Today - The resource for leaders working to build and sustain world-class teams and organizations in today’s business environment. Available at: https://businessleadershiptoday.com/dei-best-practices/.
- Francis, A. (2019). Best Fit and Best Practice Approaches in Strategic HRM. [online] MBA Knowledge Base. Available at: https://www.mbaknol.com/human-resource-management/best-fit-and-best-practice-approaches-in-strategic-hrm/.
This is a really insightful and well-explained take on how Diversity, Ethics, and Inclusion have become core parts of Strategic HRM today. I like how you pointed out that DEI isn’t just about ticking boxes anymore — it’s actually driving innovation and employee engagement, something McKinsey’s research clearly supports (McKinsey, 2023). Your mention of embedding DEI throughout the entire employee journey, from recruitment to retention, really shows a practical approach that aligns with what SHRM and Forbes experts recommend (SHRM.org, 2023; Expert Panel, 2025). Plus, including examples from Sri Lanka’s banking sector gives it a nice local flavor and shows how these ideas work in real life. Overall, it’s clear that making DEI a true part of the company culture really pays off in the long run.
ReplyDeleteThank you for your thoughtful comment. I'm glad that you found the content on DEI, to be both practical and relevant in today's strategic HRM context. I agree to your point of, DEI is no longer just a compliance issue but a driver of business performance and innovation. McKinsey and company has stated in 2023, that companies in the top quartile for ethnic and gender diversity are significantly more likely to outperform peers and on profitability.
DeleteThis is a timely and insightful article that highlights the growing importance of diversity, ethics, and inclusion (DEI) within strategic HRM. I especially appreciated the point about DEI being more than just a compliance measure—it's a driver of innovation and long-term sustainability. However, while the benefits of DEI are well outlined, it's also important to acknowledge the practical challenges as well.
ReplyDeleteHi Akhila, Thank you for your comment. You have highlighted a crucial point of while DEI is increasingly recognized as a strategic enabler, the real world implementation can indeed be complex. Practical challenges such as unconscious bias, resistance to change, and the lack of leadership accountability often hinder progress (Shen et al., 2009). By setting measurable DEI goals, investing in inclusive leadership training programs and embedding equity in core HR processes such as recruitments, promotions and performance managements can take DEI into system level approaches.
DeleteYou've made it very evident how SHRM's integration with DEI supports long-term objectives. But as someone who has worked for multinational corporations, I'm interested to know if you believe that startups or early-stage businesses in Sri Lanka can achieve or even prioritize the same degree of strategic fit around diversity and inclusion? How can SHRM principles be applied to agile environments like startups, which frequently have lean teams and pressing objectives, without losing the essence of DEI?
ReplyDeleteThank you for raise such an important and timely question. As you have pointed out, large multinational corporations often have the resources and infrastructure to embed DEI deeply within their strategic HRM frameworks, startups and early-stage businesses in Sri Lanka face unique constraints. However, this doesn’t mean DEI has to take a back seat. The fact is, agility and flat structures typical of startups can make them more adaptable to embedding inclusive values early on (Sharma & Mann, 2023). When the startups of the SHRM, doesn't require a massive budget, it requires the intentionality. So, with clear intention and leadership commitment, DEI and SHRM are not only possible in startups, they can be a strategic differentiator.
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