Why DEI is crucial to employee wellbeing

Why DEI is crucial to employee wellbeing

By Felizitas Lichtenberg on 27 February 2025

The revocation of federal diversity, equity, and inclusion initiatives in the United States has sent shockwaves through global workplaces.

One aspect of corporate culture where this will have catastrophic knock-on effects is the maintenance of employee wellbeing.

When organisations commit to fostering inclusivity, they create environments where individuals feel valued and supported.

Achieving this becomes far more challenging when organisations fail to take collective responsibility for DEI, leaving employees – particularly those from marginalised backgrounds – more vulnerable to mental health challenges.

At its core, DEI is about striving to create a culture where everyone can bring their authentic selves to work. By encouraging employees to express their true selves and be respectful of others in the workplace, it creates a sense of security and belonging that directly affects employee wellbeing.

Tangible benefits

Research from Oxford University has shown that organisations with higher levels of employee wellbeing deliver superior returns on assets, generate greater profits, and achieve higher valuations, highlighting the tangible benefits of investing in DEI as a driver of employee engagement, mental health, and company performance.

Employers are also currently facing a workforce mental health crisis across Europe, with mental health problems among employees now costing the EU economy €170 billion a year in missed work (according to the Czech National Institute of Mental Health).

In an era marked by global challenges, economic instability, and environmental crises, providing resources such as Employee Assistance Programmes (EAPs) is just one example of how organisations are actively addressing the growing prevalence of mental health challenges in the workplace.

Data indicates that employees are increasingly using these programmes, which underscores the growing demand for these practices. Without these efforts, organisations risk creating workplaces where employees feel unsupported and disengaged.

Addressing disparities

Although mental health issues affect employees across all demographics, marginalised groups often face unique challenges that disproportionately affect their wellbeing. DEI initiatives are critical in addressing these disparities.

For example, employees from underrepresented groups may encounter systemic biases, microaggressions, or a lack of representation, all of which can harm their mental health. By actively diversifying talent pipelines, hosting inclusive events, and leveraging recruitment technologies, organisations can begin to reduce these barriers.

However, without a deliberate focus on DEI – as well as consequences in place for inappropriate behaviour or misconduct – it becomes almost impossible to create the safe, welcoming environments that are essential for employee wellbeing.

Workplace wellbeing is not achieved through standalone policies or programmes alone – it requires a cultural shift. An inclusive culture actively addresses microaggressions and other forms of subtle exclusion. While often unintentional, the cumulative impact of microaggressions can leave employees feeling undervalued and alienated.

DEI-focused educational initiatives can help raise awareness of these behaviours, fostering a more understanding and supportive workplace. Leadership also plays a pivotal role in setting the tone. Managers who embrace DEI principles are better equipped to recognise diverse employee needs and prioritise wellbeing through practical measures, such as quiet rooms, flexible working arrangements where necessary, or simply taking the time to listen.

These actions are not just about improving wellbeing, but they also reinforce the organisation’s commitment to inclusion, ensuring employees feel seen and respected, in turn leading to a better performing workforce.

Measuring success

Measuring the success of DEI efforts is equally crucial. Regular employee surveys and sentiment analysis provide insight into whether wellbeing initiatives are meeting employees’ needs. Trends in absenteeism or sick leave can also highlight gaps in support. By embedding DEI into every stage of the employee journey, organisations can create environments where wellbeing is not an afterthought but an integral part of their culture.

The evolving intersection of DEI and wellbeing highlights emerging trends that will shape the future of work. For instance, sustainability and social impact are becoming increasingly important to employees, particularly younger generations who seek purpose-driven workplaces. DEI initiatives that incorporate these values not only enhance wellbeing by aligning with employees’ core beliefs but also position organisations as leaders in societal progress.

Similarly, the rise of artificial intelligence (AI) has revolutionised the workplace, improving efficiency but also introducing new challenges. Many AI systems reflect the biases of their predominantly male development teams, which can perpetuate exclusion – companies will have to rely on DEI experts to counteract this.

The recent developments in the United States serve as a stark reminder of how fragile progress can be, however, for global organisations this moment provides an opportunity to reinforce their commitment to DEI. Ultimately, DEI is not just a tool for compliance or improving corporate image – it is the cornerstone of employee wellbeing. Inclusive workplaces create environments where individuals feel valued, supported, and empowered to succeed.

At a time when the global workforce is under mounting pressure, the responsibility lies with employers – and employees – to ensure that DEI and wellbeing are treated not as separate ideals but as interdependent.

---