Top Ways Companies Are Measuring Their Diversity and Inclusion Progress

November 11, 2020

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As companies continue to elevate and prioritize their diversity and inclusion efforts, they have increasingly looked for ways to use data as both a meter and a motor, a tool to track improvement and to drive it.

This isn’t easy work and there’s no consensus yet on the absolute best approach. Gathering information around certain types of diversity — gender, race, age — is usually pretty straightforward (and in many cases even legally required). But other types of diversity — LGBTQ+, people with physical disabilities, neurodiversity, etc. — are not as easy to capture. And how does a company even begin to assess inclusion and belonging?

What has emerged is a growing sense that no single set of numbers is right for everyone, that the best, most effective metrics will be a blended approach that starts with representation measures — who have you hired, retained, and promoted — and adds data that provides insights into how inclusive the company culture is. Here are a few metric practices that can propel your diversity efforts forward and lead to success you can measure:

1. Track, share, and leverage essential metrics like representation and retention

Many companies now track workforce composition by gender, race, and age. “It’s really important to look at your data to understand what your representation looks like right now,” says Cindy Owyoung, the vice president of inclusion, culture, and change at Charles Schwab, “and where you might have some opportunities for improvement.” Businesses will often look at the composition of their teams by seniority level, as well, to see where development opportunities and efforts can drive significant change.

Fiona Vines, the head of inclusion and diversity and workforce transition at BHP in Australia, pays particular attention to retention data. She’s been tasked with overseeing the company’s efforts to get to 50% women in its workforce by 2025. BHP was at 17% when Fiona arrived in 2016, so she started looking at the attrition rate of women vs. the rate for men. Fiona says attrition is still slightly higher for women, but it has shrunk considerably.

“It’s like the canary in the coal mine,” Fiona says. “It is literally the metric that tells you your workforce is not inclusive. When you have members of a minority group who are leaving at a higher rate, that’s telling you something is wrong, and it helps steer you to where the problems are. It needs to be measured at quite a low level in the company because that’s the way you find where your hot spots are.”

HCL Technologies in India focuses on getting more women into middle and senior management. So, it tracks how many women, if any, report to the CEO, to each of his direct reports, and to each of their direct reports. Anuradha Khosla, the VP of HR who heads diversity and inclusion, reports the results to the board of directors each quarter.

2. Consider softer, nonobvious measures such as dads taking parental leave as a way to add depth to the picture

Veteran D&I practitioners often have a softer metric — one unrelated to hiring and promotions — that they pay particular attention to.

“I think one of the most important leading measures is what percentage of men are taking parental leave,” says Fiona at BHP. “It’s the best measure of a change that is structural and that is critical to the broader conversation about why men and women don’t participate equally in different aspects of life.”

Cindy at Schwab looks at the growth and vitality of her company’s employee resource groups. She studies the number of employee resource groups (ERGs) and the number of participants. But she really zeroes in on what Schwab’s ERGs are doing. “I look at the metric around the number of activities they are doing,” she says, “and it’s over 650 that we have planned for this year alone.”

Damien Hooper-Campbell, the chief diversity officer at Zoom Video Communications, says these nontraditional metrics “serve as bellwethers.” He, too, looks for them in a company’s employee resource groups. But he keeps an eye on the number of allies who are active in ERGs. “If you have a women’s employee resource group,” Damien says, “do you have any men who are part of it? How many non-Latinx folks are part of your Latinx employee resource group and are contributing to it or coming and listening to it?”

Employee engagement surveys can also be a useful source of metrics that look beyond representation. “We are looking at inclusion in our engagement survey,” says Pascale Thorre, the global head of inclusion and diversity at The HEINEKEN Company, “which we call the climate survey. We’re tracking how the perception of our employees about inclusion is evolving.”

3. Build a D&I scorecard and use it to hold leaders accountable

Compiling metrics into a scorecard is a way to increase visibility and accountability. “For decades,” says The New York Times, “companies and top business schools have preached the gospel of tying pay to all manner of business goals, like stock performance and profits.” But the Times article then notes that research by Pearl Meyer, a compensation consulting firm, showed that only 78 of about 3,000 companies said that hitting diversity goals affected some part of chief executives’ pay.

Sodexo Americas developed a D&I scorecard in 2002 and has refined it over the years. The scorecard is reviewed and reported monthly. The quantitative part examines how many women and minority employees are hired, retained, and promoted. The qualitative part looks at aspects such as mentoring and support for employee resource groups. The scorecard is reviewed and reported out monthly and is used in part to determine 15% of executive bonuses and between 10% and 15% of manager bonuses.

“I don’t want to mislead anyone,” says Gerri Mason Hall, the chief diversity and social responsibility officer at Sodexo Americas. “It’s not the end-all and be-all. But it is an absolutely important tool for us.”

Every month, the Office of Equality at Salesforce delivers a diversity scorecard to leaders who have more than 500 reports or who have a “large ability” to hire. The scorecard tracks the number and percentage of women and underrepresented minorities in that leader’s organization as well as the number of women and underrepresented minorities hired into their organization in the previous month, the number promoted, and the number who left the company.

“With the scorecards,” says Molly Ford, the vice president of global equality programs at Salesforce, “we’re using data to speak to executives in a language they’re used to.” Quarterly scorecards are also created to share with senior leaders in an operations review staff meeting. “I want to give my executives,” Molly says, “the same rigor that they’re looking at their pipeline or their sales numbers, the same rigor that they’re looking at their people analytics data and dashboard.”

4. Blended D&I metrics that look at multiple factors will help you avoid legal and managerial pitfalls

Make no mistake, a scorecard and executive accountability can help drive change — 41% of Sodexo’s North American leaders are from underrepresented groups, 40% are women.

But a scorecard, particularly when linked to compensation, is fraught with dangers both legal and managerial. In the United States, for example, the Equal Employment Opportunity Commission has told companies to be careful about setting targets that discriminate against nonminority candidates or employees.

“[D]iversity initiatives that are too rigid, or treat nonminority candidates unfairly, or have a demonstrable negative impact on others based primarily on profile factors such as gender, age, or race, could trigger claims of discrimination from job applicants or employees who do not fall within the parameters of the company’s diversity targets,” warns a blog post from Jill Kahn Marshall, a partner at Reavis Page Jump LLP, a law firm with offices in New York and Connecticut.

Strict hiring and promotion quotas can also undermine employee engagement and morale by suggesting that people are being hired or promoted because of something other than performance. And that can create an environment that both minority and nonminority employees find disgruntling.

Jill Kahn Marshall’s blog post suggests that employers adopt “policies that focus on flexible targets which allow managers to factor diversity into their decision-making as a ‘plus,’ while continuing to consider all candidates, inclusively, and without overreactive or unreasonably heightened emphasis on profile.”

Make sure your company looks not only at hiring, retention, and promotion numbers but at how managers mentor, sponsor, and otherwise develop diverse talent. And scour your hiring process for more than just your hiring outcomes. Keep track of the diversity in your talent pipeline, in your applicant pools, and, importantly, on your interview panels and hiring committees.

Final thoughts: Let your diversity metrics help you reach your most ambitious goals

Creating companies that allow every employee, regardless of background, to reach their potential and to feel included is the right thing for business.

As BHP started making inroads on its goal to bring gender parity to its workforce, Fiona Vines noted something powerful in the data they were mining. “Our own data,” she says, “has shown us that our more diverse and inclusive teams are significantly safer, which is the most important metric in mining; more productive in some areas of production; and definitely more engaged.”

Ultimately, it may be the business metrics you are already tracking that best capture the progress your organization is making on its D&I ambitions.

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