For companies seeking a more inclusive, equitable, and diverse workplace, data can reveal a clear path to success.
By Marta Chmielowicz
When an organization came to Korn Ferry with the goal of improving the diversity of its upper-level leadership team, a data-driven root analysis was in order. A close look at metrics around promotion, development, diversity, and employee engagement revealed that the company had no formal performance management and development program in place, but was great at informal development, with tons of opportunities for employees to pursue lateral assignments.
Further analysis showed a correlation between lateral moves and promotions, with four lateral moves predictive of a promotion to one level and six lateral moves predictive of a promotion to the next level. However, because these opportunities were awarded at manager discretion, they were not being granted to diverse employees. In fact, Latinos were six to seven times less likely to be awarded lateral moves and African Americans were 12 to 14 times less likely.
“Our predictive analytics showed that if the client did not give these underrepresented groups lateral developmental moves and opportunities, they weren’t going to get promoted, and therefore we could predict they were going to keep perpetuating the lack of representation in the higher levels of the organization,” explains Andrés Tapia, global diversity, equity, and inclusion strategist at Korn Ferry. “And so, we worked with this client to create their accountability metric -lateral representation -to increase the number of lateral movements across diverse groups and hold them accountable to that.”
By leveraging workforce data to understand the underlying causes of racial inequity in their workplace, the organization was able to gain insight into a powerful lever of inclusion and develop strategies to create lasting change. Other companies struggling to create safer and more inclusive, equitable, and diverse workplaces have a valuable lesson to learn from this approach: data can reveal a clear path forward.
Dig into the Data
The first step to a data-driven DEI approach is understanding current performance in order to set company goals and track progress. While HR leaders have long tracked rudimentary diversity representation metrics, Tapia says that leading organizations today are using data to drive their DEI programs in a much more sophisticated way. They’re using big data to see underneath the surface, understand root causes, and reveal correlations that would otherwise not be readily apparent.
To get an accurate baseline measure of DEI performance, Farren Roper, head of DEI at Qualtrics, recommends that organizations analyze diversity data alongside inclusion data.
Diversity representation is relatively easy to measure, covering metrics like age, gender identity, race/ethnicity, sexual orientation, and veteran status across various stages of the employee journey. Aura Jenkins, chief D&I officer at Randstad US, says her organization looks at three metrics in particular:
- recruitment diversity slates;
- retention numbers, including regrettable attrition and employee development; and
- promotion rates across gender, ethnicity, and other demographic groups.
Annie Lin, vice president of people at Lever, emphasizes that companies should look at this data within their current employee base as well as their candidate base. “As a starting point, it’s crucial to understand the percentage of candidates from underrepresented groups as a whole, the percentage of candidates from underrepresented groups throughout the different stages of the interview process, and conversion rates from stage to stage of candidates of different demographic groups,” she explains.
However, inclusion can be harder to pin down. Qualtrics research suggests that the three main areas to focus on when measuring inclusion are equity, belonging, and authenticity. These elements can be measured by examining six main drivers of inclusion (see Figure 1), three of which are top-down (including inclusive leadership, management, and equitable processes), and three of which are bottom-up (including inclusive teams, psychological safety, and individual buy-in).
“Psychological safety is a metric a lot of employers overlook, but it’s really critical,” says Jenkins. “The Deloitte University Leadership Center for Inclusion put out a study recently that said that 39% of employees would leave their company for a more inclusive one -and that means we need to look at DEI holistically and include psychological safety so that we can move the needle on improving culture.”
Organizations should leverage consistent pulse and engagement surveys on a quarterly or monthly basis to collect experience data and get a sense of company performance across these six dimensions of inclusion.
Questions like these can offer valuable insights:
- Do you feel like you can be your authentic self at this company?
- Do you feel that you have sufficient opportunities to grow and develop?
- Do you feel like you belong at this company?
- Can you speak and share your views with your leadership team without fear of retaliation?
- Are you having meaningful conversations with your leaders?
From there, they can segment the data across demographic groups to understand which groups are feeling excluded and pinpoint exactly where the exclusion happens.
“You can break engagement data down by racial and ethnic group and then analyze the intersectional data -for example, among Black women, Latinas, and millennial Asian women,” says Tapia. “Being able to compare and contrast engagement data across different demographic groups with a white male benchmark group is when you start to reveal where you may have exclusion.”
Segmenting data by career level (entry-level, mid-level, and executive level) could also provide valuable insights, says Floss Aggrey, vice president of D&I and compliance at Randstad Sourceright. By taking a deep look at the data beyond the surface level, HR leaders can better understand the full DEI story at their organizations and develop clear interventions to improve outcomes.
Once the company understands its baseline DEI performance, it can set incremental goals for improvement. According to Aggrey, having diversity goals helps organizations ensure that they are being authentic in their DEI journey and clear about where they are, where they’re going, and how they’re getting there. Without an understanding of baseline performance, companies are likely to set lofty DEI goals that are ultimately unattainable.
To drive a more realistic approach to goal setting, Roper say that organizations should look for gaps in their data and let that guide their strategy. “When I look at diversity, I start with my employee data. I think about things like are we representative of the customers that we serve? Are we representative of the world around us? And I let the data guide me in terms of where my focus areas are. For example, my focus areas for 2022 are around gender and underrepresented minorities,” he explains.
While benchmarking against industry standards is good way to understand where the company stands on diversity in the broader marketplace, organizations should consider their business aspirations and projected growth plans when designing DEI goals and strategies. Their diversity goals must align with the company’s road map for growth in order to be truly viable.
“Diversity solutions are not one-size-fits-all. As I determine what my diversity goals look like, it’s also based on how Qualtrics is growing and what the opportunities are to grow representation. We’ve customized our growth aspirations or goals based on based on our projections of how we’re hiring and how we’re promoting and so on,” says Roper.
Tapia says that HR leaders should ask themselves a few questions when thinking about future goals.
- What are the company’s growth plans?
- Will there be a spike in hiring in the next year or two?
- Does the company experience low turnover?
- Is the company expanding into a new market?
Organizations that don’t have plans to hire new staff or expand their business may not have as many opportunities to move the needle on DEI. Any goals set by HR leaders should first and foremost align with these growth aspirations, being ambitious and aggressive without being unrealistic.
Tapia also recommends that organizations create goals based on the demographic distribution of the available labor force rather than relying on external benchmarking. “I prefer available labor force to benchmarking because you might be in an industry like financial services where even the best-in-class DEI performers may not be reflective of the available labor force,” he says.
With this data in hand, companies can set quarterly and yearly expectations for each demographic group, business function, and leadership team. It takes time to change policies, train employees, and create accountability, so organizations need to give themselves a realistic timeline to enact whatever operational, strategic, and accountability procedures they hope to put in place.
According to Jenkins, the transformation can occur in stages. For example:
- Stage one: establishing baseline training for employees.
- Stage two: creating department goals to improve the diversity of candidate pipelines.
- Stage three: establishing DEI champions to lead the charge.
- Stage four: creating a workstream with an executive sponsor.
“You have to have specific goals in mind wrapping around the benchmarking and the targets you’re trying to hit. You can say you’re going to improve gender diversity by 25%, but you need the goals and road map to get to that point. You’re not going to get there overnight,” she says.
Embracing Transparency and Accountability
Setting D&I goals is one thing, but ensuring accountability and commitment to those goals is quite another. For organizations to walk the walk, Lin says they need to provide their employees and customers with a steady cadence of progress updates. However, there is often a gap in communication; PwC research shows that while 63% of business leaders believe their organization makes information on the diversity of employees and leadership teams regularly available, only 42% of employees agree.
“An organization can show it is holding itself accountable by being transparent throughout its journey,” she explains. “This means regularly sharing how they are tracking against their goals, even if they’re not ‘perfect’ results. Employees and customers don’t expect progress within days, weeks, or even months but they do expect organizations to follow through on their promises.”
At Lever, Lin embeds DEI into the company-wide objectives and key results and makes those metrics visible to the whole organization with frequent progress updates. The HR team meets quarterly with each department’s leadership team to discuss DEI progress, identify gaps, and align on strategy. DEI is also a regular part of conversations and strategy-setting between recruiters and hiring managers, and the company shares its diversity metrics publicly on its website.
Qualtrics also shares its D&I efforts in monthly updates, a quarterly report, and an annual report to give employees a solid understanding of where the company is now, where the gaps are, and where it needs to improve. As part of its transparency initiative, the company makes its DEI data readily visible across the organization, giving leaders at all levels of the organization the tools to understand in real time how they are performing relative to the six key drivers of inclusion.
“Transparency is one of our core customer values,” says Roper. “In our 2021 Employee Experience Trends report, the number one thing that came through was that people want communication -people want to understand more about the company’s strategies and goals. One way we do this is by using our technology to democratize access to DEI data. Anyone in the company knows at any given moment what the company view looks like and what the individual contribution is towards that goal.”
Because diversity and inclusion performance is integrated with Qualtrics’ overarching business performance, each department is evaluated on its success creating an inclusive culture and is held accountable to a tailor-made set of goals.
“The more DEI professionals I engage with, the more I’m learning that oftentimes, your manager level is where DEI strategies come to die,” Roper explains. “So, it’s important to give every single manager a view on what inclusion looks like in their specific teams and help them understand where there are gaps and shortcomings and what they need to do to drive a more positive inclusion experience.”
By offering weekly reports to leaders who are directly responsible for improving DEI, Aggrey says that HR leaders can offer opportunities to make quick adjustments and course correct the strategy.
However, none of this works if the organization doesn’t have buy-in from the senior-most levels of its leadership team. “People expect diversity practitioners to come in, wave their magic wand, snap their fingers, and become culturally competent and inclusive. It doesn’t work that way -diversity is hard work, and you have to have the commitment, the resources, skin in the game, and support of the most senior leaders in the organization,” says Jenkins.
By getting the buy-in from the senior leadership team, companies can begin to trickle that commitment down to the lower levels of management. For example, Randstad’s CEO ensures accountability for D&I goals in quarterly executive diversity council meetings, where leaders are asked to explain their D&I performance numbers.
“We look at each leader’s representation numbers to see has anybody moved the needle, and why have they moved the needle. That’s a very hot seat to be put in when your CEO is on the call and they’re waiting to hear your explanation. That drives the accountability level so DEI is not sitting with HR or the diversity team or the talent acquisition team -each leader owns it,” says Jenkins.
Once organizations set goals for their leaders and give them the support structure to meet those goals, they can consider introducing financial incentives to ensure full commitment. Many employers are tying DEI performance with incentive compensation or bonuses, linking those goals to broader business goals and tying them to something that matters to every leader.
“I was just reading a survey that showed organizations that embrace financial accountability -those that have tied D&I to bonuses -are much further along in their D&I journey versus organizations that have simply socialized it without putting strong measures in place,” says Aggrey. “It’s important to tie goals back to the bonuses of senior leaders so that they have that skin in the game and they are invested in the success of those initiatives.”
By measuring their baseline DEI performance, using the data to guide their strategy, monitoring progress across demographic groups, and setting strong accountability measures, organizations can start to make real progress on their D&I commitments.