The answer is obvious. According to McKinsey, 2015 “Companies with diversity outperform less diverse organizations (15% higher for gender diversity, 35% higher for ethnic diversity)”.
Surprisingly though, most companies fail to set-up their D&I (Diversity and Inclusion” strategies and execution plans with clearly articulated metrics. Further to that, even the companies that do set-up metrics don’t often correlate their efforts to company performance – virtually making their D&I efforts insignificant to shareholders and boards. Mostly this is due to lack of systems, understanding of the available data and ability to interpret business financials and benefits. Like any project or investment decision, a detailed business analysis should be performed in order to understand both the available internal data and external data (from other CoE’s , industry bodies, other organisations successes). This will help quantify the short-term and long-term financial and non-financial benefits for the organisations planning to start or rejuvenate their D&I strategy.
What data should be analysed?
Start with evaluating existing data in the following areas:
- Existing workforce demographics – this is the easiest one to find if the data required is being collected.
- Recruitment data – this data can help a company understand how many applicants are from a diverse background and what number get hired.
- Retention data – this data set looks at the number of retained employees and what subset comprises of diverse backgrounds, age, gender, race, country of origin, disabilities, etc.
- Talent pipelines/pools – for companies that have succession plans in place or talent pipelines, this data set looks at the diversity representation within those pipelines/pools.
- Performance data – most companies assess the performance of their employees at least on an annual basis. It is a good place to look for trends in performance of individuals or teams that are from a diverse background. This data can show unconscious bias that organisations sometimes don’t otherwise pick on.
- Capability development and associated learning – companies that spend money on employees capability development and associated training should check for dollars spend on individuals from a diverse background. This may quickly demonstrate a link between employees being trained and promoted.
For groups/teams – all the above data on individuals should also be analysed at a group level i.e for departments/business units/teams. This may indicate positive or negative patterns of diversity.
In addition to existing data on individuals and groups, the business financial results should be examined with a diversity lens. This means looking at company performance data and evaluating if patterns can be identified where diversity has led to greater performance. 5-Must-Have metrics for D&I are available via The Society of Diversity.
If you don’t have supporting systems to track your people data, contact me to discuss your best options. And if you do have the supporting systems, but need someone to pull your data together to establish your metrics, I can help you with that too.
Additional resources in Australia:
- Workplace Gender Equality Agency : https://www.wgea.gov.au/about-wgea/our-role-0
- Australian Human Rights Commission : https://www.humanrights.gov.au/face-facts-cultural-diversity
- Diversity Australia : https://www.diversityaustralia.com.au/
- Mapping Australia’s diversity : https://www.hays.com.au/press-releases/HAYS_205817
- Australian HR Institute : https://www.ahri.com.au/assist/inclusion-and-diversity