Introduction

This handbook provides a comprehensive guide for Human Resource professionals in Iranian companies to design, implement, and maintain a Diversity, Equity, and Inclusion (DE&I) strategy in accordance with national laws and cultural frameworks. It ensures inclusivity for various ethnicities, religions, genders, individuals with disabilities, and Isargaran (war veterans), aligning with the Islamic Republic of Iran’s legal requirements.

 

Why DE&I? The Value It Brings to Enterprises

Diversity, Equity, and Inclusion (DE&I) has evolved from a moral imperative to a strategic business necessity. Enterprises that prioritize DE&I benefit from enhanced innovation, financial performance, talent retention, and market competitiveness (McKinsey & Company, 2020).

DE&I Enhances Financial Performance

Evidence:

·        Companies in the top quartile for gender diversity are 25% more likely to achieve above-average profitability, while ethnically diverse companies outperform peers by 36% (McKinsey, 2020).

·        A 10% increase in gender diversity at the executive level correlates with a 3.5% rise in EBIT margin (Boston Consulting Group, 2018).

·        S&P 500 firms with diverse boards see higher ROE (Return on Equity) than those without (Credit Suisse, 2019).

Diverse teams reduce groupthink, leading to better risk assessment and more innovative solutions (Harvard Business Review, 2016).

 

DE&I Drives Innovation & Creativity

Evidence:

·        Companies with above-average diversity generate 19% higher innovation revenues (BCG, 2018).

·        Teams with members from diverse backgrounds solve complex problems faster than homogenous groups (Harvard Business Review, 2017).

Cognitive diversity—differences in perspectives, problem-solving approaches, and cultural insights—fuels creativity (Forbes, 2020).

 

DE&I Improves Talent Attraction & Retention & Stronger Employer Brand

Evidence:

·        67% of job seekers consider workplace diversity a key factor in employment decisions (Glassdoor, 2020).

·        76% of job seekers consider DE&I important when evaluating employers (Glassdoor).

·        Inclusive workplaces have higher retention and engagement (Gallup).

·        Inclusive companies experience 5.4x higher employee retention (Bersin by Deloitte, 2017).

·        Employees in inclusive environments report 3.2x higher engagement (Gallup, 2019).

·        Inclusive workplaces have higher retention and engagement (Gallup).

When employees feel respected and valued, they exhibit higher productivity and loyalty (SHRM, 2021).

 

 

DE&I Strengthens Customer & Market Alignment

Evidence:

·        87% of global consumers prefer brands that champion diversity (Accenture, 2019).

·        Companies with diverse leadership are 70% more likely to capture new markets (Harvard Business Review, 2018).

A diverse workforce understands diverse customer needs, improving product relevance and market penetration (MIT Sloan, 2020).

 

DE&I Mitigates Risks & Enhances Governance

Evidence:

·        Firms with diverse boards have fewer governance-related scandals (MSCI, 2021).

·        ESG (Environmental, Social, Governance) investors prioritize DE&I-compliant firms (PwC, 2022).

Diverse leadership reduces ethical blind spots and improves regulatory compliance (Stanford Business, 2021).

 

Legal Framework Overview

1.     Constitutional Law

o   Article 19: Equal rights for all ethnic groups and races.

o   Article 20: Equal protection of law for all citizens.

o   Article 21: Emphasis on women’s rights and protections.

2.     Labour Law

o   Prohibits workplace discrimination.

o   Mandates equal opportunity employment.

3.     Disability Protection Law (2018)

o   Requires accessible infrastructure and employment accommodations.

o   Establishes rights for persons with disabilities.

4.     Veterans and Martyrs Affairs

o   Laws protecting the employment rights of Isargaran and their families.

Integrating CSR, GRI, and Labor Standards into DE&I Strategy

To ensure a holistic and compliant DE&I approach, enterprises must align with Corporate Social Responsibility (CSR) principles, Global Reporting Initiative (GRI) standards, and international labor standards. This strengthens ethical credibility, regulatory compliance, and stakeholder trust.

Corporate Social Responsibility (CSR) & DE&I

CSR ensures that DE&I efforts align with broader social, environmental, and ethical business practices.

Key CSR-Aligned DE&I Objectives:

• Ethical Hiring & Fair Labor Practices – No forced labor, child labor, or discrimination.
• Community Engagement – Support underrepresented groups through scholarships, partnerships, and local hiring.
• Sustainable Workforce Development – Upskilling programs for marginalized communities.
• Supplier Diversity – Procure from minority-owned, women-owned, and disability-inclusive businesses.

CSR-Linked DE&I KPIs:

CSR Focus Area	DE&I KPI Examples
Ethical Recruitment	% of hires from disadvantaged backgrounds
Supplier Diversity	% spend with diverse suppliers
Community Impact	# of beneficiaries from DE&I-linked CSR programs
Workplace Equity	Reduction in pay gaps (gender, ethnicity)

 

 

Global Reporting Initiative (GRI) Standards for DE&I

GRI provides a globally recognized framework for sustainability reporting, including DE&I metrics.

Key GRI Standards Relevant to DE&I:

• GRI 401: Employment (Hiring, diversity, and inclusion)
• GRI 405: Diversity & Equal Opportunity (Workforce composition, pay equity)
• GRI 406: Non-Discrimination (Policies, grievance mechanisms)
• GRI 407: Freedom of Association (Labor rights compliance)

GRI-Aligned DE&I Reporting Metrics:

GRI Standard	DE&I Reporting Requirement	Example KPI
GRI 401-1	New employee hires & turnover rates	Diversity hiring rate (%)
GRI 405-1	Diversity in governance & workforce	% women, ethnic minorities in leadership
GRI 406-1	Discrimination incidents & resolutions	# of reported cases & resolution time
GRI 407-1	Respect for collective bargaining rights	% of employees covered under labor agreements

International Labor Standards & DE&I Compliance

Enterprises must align DE&I with ILO (International Labour Organization) standards and local labor laws to ensure fair treatment.

Key Labor Standards for DE&I:

• ILO C111 – Discrimination (Employment & Occupation) → Ensures non-discrimination in hiring, pay, promotions.
• ILO C100 – Equal Remuneration → Mandates gender pay equity.
• UN Guiding Principles on Business & Human Rights → Requires due diligence on DE&I risks (e.g., bias in AI hiring tools).
• OECD Guidelines for Multinational Enterprises → Encourages diverse & inclusive workplaces.

Labor Standards-Aligned DE&I KPIs:

Labor Standard	DE&I Compliance Requirement	Example KPI
ILO C111	Anti-discrimination policies	% of employees trained on bias prevention
ILO C100	Gender pay equity	Pay gap metrics (adjusted & unadjusted)
UNGP BHR	Human rights due diligence	# of DE&I-related grievances resolved
OECD Guidelines	Inclusive workplace culture	Employee inclusion index score

 

Action Plan: Embedding CSR, GRI & Labor Standards in DE&I

1. Conduct a DE&I Gap Analysis – Assess current policies against CSR, GRI, and labor standards.
2. Set Public DE&I Commitments – Align with GRI reporting and SDGs (e.g., SDG 5, 8, 10).
3. Implement Ethical Audits – Regularly review hiring, pay, and promotion practices for compliance.
4. Engage Stakeholders – Involve employees, unions, and NGOs in DE&I strategy.
5. Report Transparently – Publish annual DE&I sustainability reports using GRI standards.

 

DE&I Objectives & KPIs Across HR Functions

Strategic DE&I Objectives

1.     Promote fairness and equity in hiring and workplace decisions.

2.     Celebrate and incorporate cultural and religious diversity.

3.     Ensure physical and digital accessibility for all.

4.     Foster an inclusive culture where everyone feels respected.

 

HR Function	DE&I Objectives	Key KPIs
Recruitment	Ensure diverse talent pipelines & unbiased hiring.	- % of diverse candidates in hiring funnel - Diversity hiring rate (e.g., gender, ethnicity, disability) - Time-to-fill for underrepresented groups - Bias mitigation in hiring (e.g., structured interviews)
Talent Management	Promote equity in promotions & career growth.	- % of underrepresented groups in leadership pipelines - Promotion rates by demographic - Retention rates of diverse employees
Compensation & Benefits (C&B)	Ensure pay equity & inclusive benefits.	- Pay gap metrics (gender, ethnicity) - % of employees with access to inclusive benefits (e.g., parental leave, flexible work) - Regular pay equity audits
Learning & Development (L&D)	Provide equitable access to growth opportunities.	- Participation rates in L&D programs by demographic - % of diverse employees in high-potential programs - DE&I training completion rates
Leadership	Build inclusive leadership capabilities & representation.	- % of diverse leaders (C-suite, Board) - Inclusion scores in leadership 360° reviews - Succession planning diversity metrics
Employee Engagement	Foster an inclusive culture where all feel valued.	- Employee engagement scores by demographic - Inclusion index (e.g., sense of belonging) - ERG (Employee Resource Group) participation

 

 

Implementation Roadmap

Year 1

·        Conduct DE&I legal and cultural audit.

·        Draft and publish the company’s DE&I policy.

·        Launch company-wide DE&I training.

Year 2

·        Implement inclusive hiring practices.

·        Make infrastructure and digital platforms accessible.

·        Establish employee support and resource groups.

Year 3

·        Integrate DE&I metrics into performance systems.

·        Report publicly on DE&I achievements.

·        Continue training and refine practices.

 

Key Focus Areas

1.     Ethnic and Cultural Diversity

o   Recruit and retain talent from various ethnic groups.

o   Offer language and cultural sensitivity training.

2.     Religious Inclusion

o   Provide space and time for prayer and religious practices.

o   Respect religious holidays and dietary restrictions.

3.     Gender Equity

o   Ensure fair pay and growth opportunities for women.

o   Provide maternity leave, childcare support, and leadership development.

4.     Isargaran Inclusion

o   Offer preferential hiring as per legal mandates.

o   Provide support services and health accommodations.

5.     Disability Inclusion

o   Modify recruitment procedures for inclusivity.

o   Ensure physical and technological access.

o   Train managers on inclusive practices.

HR Tools & Practices

·        Inclusive job descriptions

·        Blind recruitment processes

·        Diversity dashboards and audits

·        Grievance redressal systems

·        Accessibility checklists

Monitoring and Evaluation

·        Establish DE&I KPIs.

·        Annual reviews and public reporting.

·        Employee feedback surveys.

·        Legal compliance audits.

Conclusion

HR professionals play a vital role in building equitable and inclusive Iranian workplaces. By adhering to national laws and embracing the country’s rich diversity, organizations can unlock the full potential of their workforce while ensuring social responsibility and sustainability.

 

Appendices

·        Legal Reference Chart

·        Sample DE&I Survey Questions

·        DE&I Compliance Checklist for Iran

 

References

McKinsey & Company (2020). Diversity Wins: How Inclusion Matters.

BCG (2018). How Diverse Leadership Teams Boost Innovation.

Harvard Business Review (2016). Why Diverse Teams Are Smarter.

Deloitte (2017). The Diversity and Inclusion Revolution.

Gallup (2019). The Business Case for Inclusion.

Iran DE&I Legal Reference Chart

Diversity, Equity & Inclusion (DE&I) Compliance Framework

This chart summarizes key Iranian laws impacting DE&I in the workplace, with direct references to Constitutional principles, labor regulations, disability rights, veterans' protections, and anti-discrimination rules.

 

1. Constitutional Foundations

Legal Reference	DE&I Requirement	Relevant Article
Iranian Constitution	Prohibits discrimination based on gender, ethnicity, religion, or political affiliation.	Art. 19 (Equality before law) Art. 20 (Equal protection for all citizens) Art. 28 (Right to employment) Art. 29 (Social welfare rights)

 

2. Labor & Employment Laws

Legal Reference	DE&I Requirement	Relevant Article
Iran Labor Law (1990, amended 2019)	- Non-discrimination in hiring - Equal pay for equal work - Maternity/paternity leave - Workplace safety & harassment protections	Art. 6 (Non-discrimination) Art. 38 (Equal pay) Art. 76-78 (Maternity leave: 6 months) Art. 75 (Harassment prevention)

 

 

 

 

 

3. Disability Inclusion Laws

Legal Reference	DE&I Requirement	Relevant Article
Law on the Rights of Persons with Disabilities (2018)	- 3% employment quota in public/private sectors - Workplace accessibility (ramps, ergonomic tools) - Tax incentives for hiring disabled workers	Art. 10 (Employment quota) Art. 11 (Accessibility) Art. 12 (Training & awareness)

 

4. Veterans & Martyrs' Families (Issargaran Law)

Legal Reference	DE&I Requirement	Relevant Article
Issargaran Law	- Hiring priority for veterans & martyrs' families - Job security protections - Additional benefits (e.g., pensions, healthcare)	Art. 14 (Employment preference) Art. 21 (Job stability)

 

5. Foreign Workers & Nationality Laws

Legal Reference	DE&I Requirement	Relevant Article
Nationality Law	- Work permit requirements for non-Iranians - Restrictions on certain roles for foreigners	Art. 976 (Citizenship rules) Ministry of Labor Circulars (Foreign worker quotas)

 

6. Anti-Discrimination & Grievance Mechanisms

Legal Reference	DE&I Requirement	Relevant Article
Islamic Penal Code	- Penalties for workplace discrimination - Protections against harassment	Art. 19 (General anti-discrimination) Art. 159 (Grievance redressal)

 

7. CSR & Reporting Requirements

Legal Reference	DE&I Requirement	Relevant Article
Corporate Social Responsibility (CSR) Guidelines	- Encouraged (not mandatory) DE&I reporting - Supplier diversity (supporting women/disabled-owned businesses)	Ministry of Industry circulars (Voluntary CSR standards)

 

Summary of Key Compliance Actions

1. Hiring: Meet 3% disability quota, prioritize veterans.
2. Pay Equity: Conduct gender pay audits (Labor Law Art. 38).
3. Accessibility: Modify workplaces per Disability Law Art. 11.
4. Training: Provide anti-discrimination & disability awareness programs.
5. Reporting: Document DE&I efforts for Ministry of Labor audits.

 

Penalties for Non-Compliance

• Fines (e.g., up to 10% of payroll for missing disability quota).
• Legal action for discrimination (Constitution Art. 19).
• Business license suspension for severe violations.

 

DE&I Policy Recommendations for Iran

✔ Adopt GRI-aligned DE&I reporting (voluntary transparency).

✔ Establish an Employee Grievance Committee (Labor Law Art. 159).

✔ Partner with NGOs (e.g., Iran Disability NGOs, Veterans’ Associations).