Measuring Diversity and Inclusion (D&I)
- Gender-diverse organizations are 25% more likely to have above-average profitability than their peers; and
- Ethnically diverse organizations are 36% more likely to have above-average profitability than their peers.[i]
- Companies with a diverse workforce are up to 20% more innovative and deliver 19% higher innovation revenues.[ii]
What does not make sense is that many companies do not keep track of their current position, nor do they measure their progress towards reaching their D&I goals. Suppose an organization wants to make a meaningful change regarding diversity and inclusion. In that case, it is not enough to adopt a pro-diversity stance without implementing a measurement strategy to keep track of this goal. Organizations tend to measure activities they deem critical to success. By not measuring diversity and inclusion plans and goals, the message is clear that the organization is, at best, indifferent to D&I issues.[i]
It may seem obvious to state, but D&I consists of two distinct elements: diversity and inclusion. Each aspect requires a specific measurement tool, as they are fundamentally different (although interconnected) concepts. Diversity requires a quantitative measurement or census. Inclusion is a qualitative survey of employee feelings and perceptions.
An organization's diversity measurement is based on demographics - the statistical data about a population and particular groups. In other words, it is about understanding the individuals and groups of people in the organization.
Diversity is a quantitative measure. The measurement should look at an organization's workplace and personal demographics. Workplace demographics refer to organizational data points such as tenure, job function, department, location, or job level. Personal demographics refer to each employee's uniqueness. This includes family status, sexual orientation, gender, age, race and ethnicity, place of birth, or languages spoken.
Capturing these two separate and related data sets gives a clearer picture of an organization's workplace diversity.
However, demographics change over time; thus, an organization's diversity can change. It is essential to track workforce changes to ensure that the organization is meeting the needs of its people. Large organizations with rapid employee turnover may need to conduct a census of their people more often than smaller organizations with relatively slow turnover or employment growth rates.
Unlike the quantitative diversity metrics, inclusion measurement is qualitative in nature. It involves gathering employees' feelings, attitudes, and perceptions concerning their workplace. Organizations must evaluate worker sentiment to successfully track inclusion, ensuring that the employer can act swiftly on the findings.[i]
Inclusion surveys can act as a baseline. In conjunction with "pulse" surveys, they can highlight feelings of inclusion at different organizational levels, which provides an opportunity to understand differences within the organization.
Leaders can use the pulse data to devise focus groups or conduct listening circles. These tools delve deeper into the sentiments of different groups, teams, or workplace locations, thereby uncovering potential issues, obstacles, or roadblocks.
Beyond the Business Case
Demographic data can guide updated recruitment policies. But without inclusion data, an organization may be allowing micro-aggressions, exclusive behaviours, and disrespectful acts to flourish, thus countering retention efforts. Bias may be hindering employee growth opportunities and in so doing, damaging leadership development paths.
Knowing and understanding workforce diversity can aid in policy development and strategic planning. Revisiting your organization's vision, values, and mission statements may be a good place to start if you are wondering what to do next. In order to be successful, DEI efforts must be aligned with more extensive organizational mandates.
Inclusion, diversity, equity, and accessibility (IDEA) will be at the forefront of business priorities for years to come. It makes good business sense to embrace the changing workplace. By measuring diversity and inclusion, an organization can position itself to make data-informed decisions for strategy and planning.
CCDI Consulting offers a wide range of services to support organizations undertaking their IDEA measurement and assessment needs.
[i] McKinsey and Company. (2020). Diversity wins: How inclusion matters. https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-wins-how-inclusion-matters.
[ii] World Economic Forum. (2020). Diversity, Equity, and Inclusion 4.0: A Toolkit for Leaders to Accelerate Social Progress in the Future of Work. https://www.weforum.org/reports/diversity-equity-and-inclusion-4-0-a-toolkit-for-leaders-to-accelerate-social-progress-in-the-future-of-work.
[iii] Williams, J. C., and Dolkas, J. (2022). Data-Driven Diversity. Harvard Business Review. https://hbr.org/2022/03/data-driven-diversity.
[iv] Romansky, L., Garrod, M., Brown, K. and Deo, K. (2021). How to Measure Inclusion in the Workplace. Harvard Business Review. https://hbr.org/2021/05/how-to-measure-inclusion-in-the-workplace.
Developing a Metric-Based Attitude Towards D&I | 5 Tips to Get Your Organization Ready
Have you decided that your diversity and inclusion (D&I) efforts will gain more traction with the C-suite if they are grounded in measurable data or metrics? Do you want to quantifiably show the benefits of your investment in D&I training? Good. As the saying goes, "what gets measured, gets done."
Here are 5 tips to help you and your organization move toward a metric-based D&I strategy.
Before you collect your diversity, equity, and inclusion (DEI) data, you should also prepare the executive levels to act on the results. Do not waste too much time between the data collection and strategy execution phases. Prioritize the findings and issues. No organization can fix all its problems at once. Start with a significant concern and address it. Communicate clearly and often the steps being taken.
Communicate the Commitment
Change is complex, and expectations must be managed with clear, transparent, and continuous communications. Share goals and objectives. Celebrate wins. Acknowledge setbacks. People seldom expect perfection, but they do want to be kept informed.
Develop Your DEI Data Policy
The D&I data you collect is sensitive and confidential. A well-defined policy regarding this data collection, storage, use, retention, and destruction is critical. It builds trust with employees and will help increase participation levels. Moreover, it will lessen the legal risk associated with the collection and use of the data.
Data is not a Plan
DEI surveys can illuminate issues and challenges that are not apparent, but they are not a solution in and of themselves. They can serve as benchmarks and provide insights that direct the DEI strategic planning process. The data your company has collected is useless unless it is used to inform your company’s planning process.
Do not Think of DEI as an Initiative
If you position DEI as an initiative, you are limiting its potential. Initiatives tend to be time-bound and short-lived. Diversity and inclusion (D&I) need to be framed as a strategic imperative and given the proper attention that other imperatives receive, including resources, budget, and time.
Act on the D&I data that you collect. Use it to effect changes in the evolving makeup of your workplace.
What is the Return of Investment (ROI) on D&I?
Tying D&I to monetary outcomes such as return on investment is a fool's game. However, you can reframe the question to a metric that can still be valid and quantifiable.
Here are some examples to help your company structure its metrics:
- What is the cost of losing a trained employee?
- What is the expense of training and onboarding a new employee?
- What is the opportunity cost of a job vacancy?