Measuring Progress on DEI: How to Evaluate Your Company's Diversity Metrics
Diversity, equity and inclusion (DEI) have become a major focus for many companies in recent years. Inclusive workplaces have been proven to drive innovation, creativity, and ultimately, profitability.
However, measuring progress on diversity and inclusion can be challenging for organizations.
The Challenges of Measuring Progress on Diversity
There are several challenges that companies face when measuring progress on diversity. It is important to note and understand these limitations:
Diversity is a complex issue that cannot be fully captured by simple metrics.
Companies may lack the necessary data to accurately measure progress on diversity.
Resistance from employees or leadership to tracking and reporting on diversity metrics.
These challenges can hinder progress on DEI initiatives, even for the best intentioned HR professional.
If “diversity” is just seen as a box-ticking exercise rather than a genuine commitment to change, it may not be taken seriously by employees or leadership.
If companies have an incomplete data set specific to the diversity of their organization, they may not be able to identify areas for improvement.
If there isn’t agreement on tracking and reporting on diversity metrics, it may be difficult to hold the company accountable to achieving the Diversity Key Performance Indicators (KPIs) set out for them.
Key Diversity Metrics for Companies
While diversity is a complex issue, companies can use several key metrics to measure progress. Tracking these metrics can help workplaces identify areas for improvement and hold themselves accountable for progress on diversity.
Workforce Diversity: Measuring the representation of different groups in the workforce, including race, gender, and other demographic factors.
Pay Equity: Measuring whether employees are paid fairly and equally for equal work, regardless of their demographic background.
Employee Engagement: Measuring employee satisfaction and engagement can be influenced by how inclusive and supportive the workplace is.
Employee Turnover: Measuring how many employees leave the company and whether there are any demographic patterns to turnover.
Leadership Diversity: Measuring the representation of different groups in leadership positions can significantly impact the company's overall culture.
Diversity Metrics Examples
To measure the success of their diversity programs, organizations can use a variety of quantitative and qualitative success metrics. Diversity and inclusion metrics commonly used include:
Workforce Diversity: This could include demographic data on representation at different levels of the organization, such as race, gender, age, and other identity markers.
Example: The organization could set a goal to increase the representation of underrepresented groups in the organization by 20% over the next three years. They could measure progress by tracking the percentage of employees from underrepresented groups at different levels of the organization on an annual basis.
Pay equity: Analyzing pay data by demographic groups can help identify whether there are pay gaps that need to be addressed.
Example: The organization could set a goal to eliminate any pay gaps between demographic groups within the next three years. They could measure progress by comparing salaries and compensation packages across different demographic groups on an annual basis.
Employee Engagement: Regular surveys can help organizations assess how employees, volunteers or clients feel about their workplace culture or environment, including whether they feel valued, included, and supported.
Example: The organization could set a goal to increase employee engagement by 15% over the next year. They could measure progress by administering regular surveys and tracking changes in engagement levels over time.
Employee Turnover: High turnover rates can be an indicator of a toxic workplace culture, and tracking turnover rates by demographic groups can help identify areas of concern as it relates to diversity in the organization.
Example: The organization could set a goal to reduce overall turnover by 10% and reduce turnover among underrepresented groups by 20% over the next two years. They could measure progress by tracking turnover rates by demographic groups on a monthly or quarterly basis.
Leadership Diversity: Tracking promotion rates by demographic groups can help organizations identify whether there are disparities in opportunities for career advancement.
Example: The organization could set a goal to ensure that at least 30% of promotions go to employees from underrepresented groups. They could measure progress by tracking promotion rates by demographic groups on an annual basis.
There are numerous Diversity Metrics an organization may want to use and this is not a complete list. Which diversity metrics a company utilizes is driven by the organization’s Diversity KPIs and DEI Strategy.
For more insights, see our Case Study on Building DEI Strategy from the Ground Up.
Resources for Benchmarking DEI Data
Measuring progress on diversity can be complex, and companies may need additional resources to guide them in their efforts. Here are some resources that may be helpful:
The Global Diversity, Equity & Inclusion Benchmarks by the Center for Global Inclusion provides a framework for organizations to assess and improve their DEI efforts.
The Corporate Diversity, Equity, and Inclusion Benchmarking Report: This report from Deloitte provides insights into how leading organizations approach DEI and offers benchmarking data on topics such as diversity in leadership and employee resource groups.
Strategies for Improving Inclusion & Diversity Metrics
There are several diversity initiatives that companies can use to create a culture of inclusion and still be measured:
Hiring Practices: Implementing inclusive hiring practices, such as setting diversity goals for hiring, using diverse recruitment sources and ensuring that job descriptions are inclusive and free from bias.
Training and Development: Providing training and development opportunities that are inclusive and accessible to all employees, regardless of their demographic background.
Inclusive Policies and Practices: Implementing policies and practices that promote inclusion, such as flexible work arrangements, employee resource groups, and anti-discrimination policies.
Leadership Commitment: Ensuring senior leadership is committed to DEI efforts and held accountable for progress on DEI metrics.
Successful Examples of Improving Diversity
Many companies have made significant progress in their DEI efforts. Here are two success stories that stand out in the DEI community:
Intel
In 2014, Intel set a goal to achieve full representation of women and underrepresented minorities in its workforce by 2020. By 2019, it had achieved 100% pay equity for all employees. You can download Intel’s report here.
Citigroup
In 2020, Citigroup announced that it would spend $1 billion to help close the racial wealth gap in the United States. The initiative was not just focused internally, they looked to their suppliers and other stakeholders to join in the efforts. Citigroup continues to monitor and share their successes in the investment.
Common Mistakes in Measuring Progress on Diversity
Focusing Too Much on Metrics: Metrics are important, but they are not the only measure of progress on diversity. Companies should also focus on creating a culture of inclusion and belonging, which may not be fully captured by metrics.
Lack of Accountability: Without clear accountability for progress on diversity, it can be difficult to drive real change. Companies should ensure that senior leadership is held accountable for progress on diversity KPIs and targets.
Not Involving Employees: Employees are a valuable source of information and insight when it comes to diversity efforts. Companies should involve employees in the process of identifying areas for improvement and implementing solutions.
Making these mistakes can result in a lack of progress on DEI or even a step backwards. It can also damage the company's reputation, as customers, employees, and other stakeholders may view the company as insincere or disingenuous in its DEI efforts.
Tips on How to Avoid Common DEI Strategy Issues
To avoid these mistakes, companies should:
Use Metrics as a Starting Point: Metrics are important but should not be the only focus of diversity, equity and inclusion efforts. Companies should use metrics as a gauge for identifying areas for improvement but also focus on creating a culture of inclusion and belonging.
Hold Leadership Accountable: Senior leadership should be held accountable for progress on diversity metrics and should be committed to creating an inclusive workplace culture.
Involve Employees: Employees are a valuable source of information and insight when it comes to inclusion & diversity efforts. Companies should involve employees in the process of identifying areas for improvement and implementing solutions.
Measuring progress on diversity is critical for creating a more inclusive and equitable workplace. Achieving diversity, equity, and inclusion in the workplace is an ongoing process that requires continuous effort and attention.
By measuring progress on diversity and using data to inform DEI efforts, companies can make meaningful progress toward creating a more inclusive and equitable workplace.
It is important to remember that diversity efforts are not only the right thing to do but are also beneficial for business outcomes, employee engagement and company reputation.