How to measure diversity, equity, and inclusion

Measuring diversity, equity and inclusion within an organization is essential for progress and identifying areas for improvement when it comes to your DE&I-strategy. Having a DE&I-strategy has become a must-have for boards, customers, investors, candidates, and employees. But how do you measure this complex, but important concept as you aim for an inclusive workplace? Get the answer here. 

In this article you will find insights about:

• Why measure diversity, equity, and inclusion?
• How to measure diversity, equity, and inclusion?
• What are the KPIs for diversity, equity, and inclusion?
• Attention points when measuring DE&I

Why measure diversity, equity, and inclusion?

First, let’s understand why it is important to even begin measuring DE&I in the first place. Let’s take a look at some of the most important reasons why you should measure your diversity, equity, and inclusion in your organization:

1. Practice data-driven decision-making: With DE&I-data, you have an excellent foundation for practicing a data-driven decision-making process on your DE&I-strategy. This helps leaders, HR, and top management to make informed decisions about where to allocate resources and focus efforts to address areas of improvement to create a more inclusive workplace.
   
   
2. Diversity creates better organizations: Research by McKinsey from the past seven years shows that organizations with greater diversity are both more profitable and more competitive. An organization’s employer brand is also affected by the success of diversity in the workplace. A Candidate Study from 2020 shows that 83% of the younger generations in the labor market value diversity and inclusion as an important aspect when choosing their workplace.
   
   
3. Market competitiveness: When your organization measures its DE&I, it can enhance your market competitiveness. Customers and clients increasingly expect organizations to demonstrate a commitment to DE&I and measuring your DE&I can serve as evidence of that commitment.
   
   
4. Employee satisfaction and well-being: A diverse and inclusive culture has a positive impact on employee satisfaction, well-being, and engagement. Measuring your DE&I will help identify areas where improvements can be made to enhance the workplace experience for all employees.
   
   
5. Innovation and creativity: Diverse and inclusive work environments are known to foster innovation and creativity. Without diversity, organizations create teams of people who think too similarly and therefore make poor decisions that alienate the company’s products and services from consumers.

How to measure diversity, equity, and inclusion?

If you want to know how successful you are at being diverse, equitable, and inclusive in your workplace, you should measure your diversity, equity, and inclusion. This has become an increasingly important area to succeed in if you want to be an attractive workplace for both customers and employees.

These steps are essential for organizations that want to measure their diversity, equity, and inclusion:

1. Define your goals and metrics

   Start by clearly defining what diversity, equity, and inclusion means to your organization. Establish specific, measurable, and time-bound goals and metrics to track progress. This could include setting goals for increasing the representation of underrepresented groups, changing your internal language to be less biased and more inclusive, or reducing pay disparities. Metrics you might want to track include promotion and pay equity, employee turnover rates, DE&I satisfaction scores, and age.

2. Collect data through a DE&I Survey
   Data is crucial to measuring your DE&I. Therefore, you should start by collecting relevant data on demographics such as race, gender, age, disability status and other factors depending on your goals. Here, a DE&I survey is a very effective way to get the insights you need to succeed within your DE&I goals. This survey will provide you with relevant insights on the areas you want to learn more about coming directly from your employees.

   Relevant DE&I-questions to be included in a DE&I survey could be:

• • • X is committed to supporting a culture of diversity and inclusion?
    • Can I be myself at X?
    • In my team, we are treated fairly regardless of individual differences?
    • I can speak my mind without fear of reprisal?
    • I feel that my work is appreciated at X?
    • My manager encourages me to express and try different ideas?
    • Co-workers at X challenge the way things are done?

3. Collect qualitative data
   Another way to collect your data is through focus groups or interviews with the employees. This can also be an effective method - but remember that DE&I can be a very sore subject for some people to deal with and talk about, which is why many prefer the survey method to maintain anonymity in order to talk freely.

4. Analyze your DE&I-data
   Once the data is collected, the next step is to analyze the data to find the valuable conclusions you need before acting on the insights. Because confidentiality is key when dealing with DE&I data and survey responses, you should seek outside help to assist you in the analysis phase. An experienced partner can also help you interpret the data and put your findings into perspective.

5. Act on the conclusions
   When you have defined the conclusions, it is essential to take meaningful action to address any issues you may have identified and begin to (or accelerate) promoting inclusivity and creating a more equitable workplace. This can be done by prioritizing the most critical issues that need to be addressed and setting specific DE&I-goals.

   Make it a priority to secure the commitment of top management and key stakeholders to support DE&I initiatives – their buy-in is essential for success. And create a DE&I-action plan that outlines specific strategies, tactics, and initiatives to address the issues identified. This plan should include timelines, owners, and performance metrics.

Working with DE&I is a long-term commitment, and progress may not always be linear. Regularly reviewing and updating your data and strategies is essential to creating a more diverse, equitable, and inclusive workplace for your employees. 

What are the KPIs for diversity, equity, and inclusion?

If you want to measure your diversity, equity, and inclusion, you should also make sure you have defined your most important Key Performance Indicators within the DE&I-area to track the effectiveness of your new initiatives. Here are some important KPIs for DE&I, you can use as your tracking points:

1. Overall workforce diversity (gender, age, disability, sexual orientation, ethnicity, educational background etc.) compared to a relevant benchmark

2. Minority representation in leadership positions

3. Pay equity

4. Engagement and engagement gaps

5. Perception gaps in equity and inclusion

6. DE&I-training and development activity and effectiveness

Explore how other organizations are working with DE&I in real-life here.

Attention points when measuring DE&I

When measuring DE&I in your organization, it is important that you keep these attention points in mind:

• Pay close attention to data privacy: It can be a sore point for some employees to talk about DE&I (even if it is in a survey), so data privacy is extremely important. Be sure that you clearly explain how you will ensure a high level of data privacy so that all employees feel comfortable answering the survey questions.

• Explain the purpose of measuring DE&I: Be clear about why you are doing this survey and for what purpose. If the employees understand and buy into your agenda, they will be more likely to participate in the survey. A high survey response rate is always desirable, as it makes the data more reliable.

• Always be respectful in the process: Remember to collect only the actionable data you need. Do not ask survey questions that give you answers and details that you cannot work with anyway. This will appear disrespectful to the employees and to the DE&I-agenda in general.

• Remember to follow up: All data processing is complex – and this one will be too. So, make sure you team up with someone who can do this part on a professional level so you can get valuable conclusions from your DE&I-data. This one is very important before you can start working professionally with a DE&I-strategy.

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Literature:

Rao, K., Tilt, C. Board Composition and Corporate Social Responsibility: The Role of Diversity, Gender, Strategy and Decision-Making. J Bus Ethics 138, 327–347 (2016).