Organizations need to look at the numbers in order to turn D&I commitments into impactful change.
By E.J. Marin
According to a new report from McKinsey & Company, it may take 95 years for Black employees to reach parity in management positions if there is no change to the current promotion, attrition, and hiring rates in the U.S. In the past year, diversity, equity, and inclusion have become major topics of conversation as COVID-19’s disparate health impact on people of color, the pandemic’s outsized negative economic effects on women in the workforce, and the rise of Black Lives Matter protests made disparities glaringly clear.
Many are working toward progress, with CEOs across all industries making commitments to enhance the D&I efforts of their organizations now and in the future. But work still needs to be done to achieve equity in the workplace. As organizations look ahead to 2021 and beyond, it’s up to HR departments to act on D&I promises from leadership and work toward impactful change.
Setting New Standards for Workplace D&I
It’s true that moving forward on D&I commitments is the right thing to do for both employees and the business, but in some areas of the world, it’s also a legal requirement. In order to create transparency surrounding the lack of diversity in the workplace, many global legal bodies are now requiring mandatory diversity and inclusion reporting.
Last year, France created new standards to promote professional equality in the workplace, introducing revised key performance indicators and establishing penalties for organizations that don’t address gender-based pay inequality. As of January 2021, Canada became the first country to make wage gap information publicly available, giving employers the opportunity to show leadership by reducing wage inequity. In March 2021, the new California pay equity reporting requirements took effect, with the stated purpose of achieving equal pay for women and people of color.
The heightened scrutiny should serve as added incentive for companies to make progress on D&I initiatives—and fast. These requirements also demonstrate that having the right technology to accurately track and report diversity metrics is no longer a nice thing to have, but an absolute necessity. Without the proper technology and tracking tools in place, companies will face a nightmare of a reporting season, and more importantly, risk facing penalties for not complying to new standards.
The Key to Advancing D&I: Data and Technology
Data is essential to advancing D&I goals, but not just any data. Companies need high-quality information around multiple dimensions, such as salary range per position, the experience level of each employee, position location, and employee age. These data points become especially important when doing location-based analysis or when companies need to replace a retiring workforce with new talent. Having data on these metrics allows organizations to analyze them against D&I goals and benchmarks to get a full picture of progress or lack thereof. For example, if an organization is aiming to increase pay equity for women in their engineering department, having data on the salary range for the entire department broken down by gender, age, race, etc., is necessary to identify gaps and remedy them.
Too many companies currently rely on spreadsheets and multiple disconnected systems to manage employee information. For companies that are serious about their D&I commitments, now is the time to rethink that strategy and dig into the data.
The pandemic accelerated digital transformation for many companies when they rushed to deploy technology that would enable remote access to critical information for business continuity and reorganization purposes. For many, these efforts led to shocking revelations about data quality.
In one real-world example, an HR team that was deploying new technology found that employee data from a legacy system didn’t match their recruiting information. When they looked more closely, they found that temporary positions hadn’t been removed from the company’s legacy system, which resulted in a data mismatch. Luckily, they found and corrected the error before making decisions on D&I initiatives using inaccurate data.
Deploying new technology to help with organizational design exposed the error, and it also provided context around the data and analysis tools that empowered the HR team to drive progress on D&I and other projects.
To achieve D&I goals, HR leaders not only need technology that is capable of producing the required data—they also need assurance that it’s quality data. That’s why so many HR departments that maintain information on spreadsheets and disconnected systems are rethinking their approach.
HR leaders should look for solutions that are user-friendly and can be easily navigated to avoid technology getting in the way of the desired outcome. This may sound trivial, but when companies work with big data, analytics, and machine learning, it is very easy to get lost in the technicalities instead of focusing on the end game. Organizations can waste a lot of time dealing with technology instead of producing results.
Data quality is negatively impacted by information gaps or errors. Global organizations are engaging with teams dispersed around the world and are using multiple ERP and HCM systems at the same time. This can result in many challenges with data quality, including:
- missing employee contact information;
- active employees identified below the working age or over the expected age criteria;
- employees on payroll who should not be;
- positions that do not have a cost center or are not associated with a business unit;
- missing location data; and
- orphaned or duplicated employees.
But with quality diversity, inclusion, and equality metrics, companies can fulfill reporting requirements, measure program performance, identify new opportunities for improvement, and keep stakeholders informed along the way. Companies that made D&I commitments this year need to have data and technology to drive initiatives and push for progress. That’s the best way to create real change.
E.J. Marin is the director of solution engineering for Nakisa.