Why good data drives DEI initiatives
Diversity, equity, and inclusion (DEI) initiatives add real value and are proving a competitive advantage for companies large and small, because environments where employees from diverse backgrounds thrive and see their contribution as unique perspectives and insights can only promote a culture of success and attract more of the same.
DEI leadership drives positive workplace culture, resulting in increased employee satisfaction, lower turnover rates, and improved business performance. McKinsey & Company says gender diverse companies have a 55% chance of improving financial performance than competitors. In addition, diverse companies can demonstrate a 59% higher chance of financial outperformance. This indicates that diversity-focused companies outperform their less diverse competitors financially.
But employers often misunderstand DEI initiatives. Some may have reservations, not knowing where to begin or fearing of making a mistake backs them away from DEI as a goal or result. For employers, this reticence can be a costly decision, meanwhile encouraging self-inflicted turnover, damage to company culture, and decreased financial performance. To remain competitive in their respective markets and attract the best talent, DEI is a critical tool.
Moreover, a company's social conscience needs action verbs. It isn't enough to support fairness, racial diversity, or LGBTQ equality if there isn't anything to make minorities feel seen and nurtured to grow at your organization. Simply put, this isn’t about politics or PR-minded virtue signaling. It’s smart business to have a diversity of backgrounds, perspectives, and opinions at the table, so that your company closely reflects the communities and customers it serves.
However, DEI initiatives only succeed if you have a firm grasp your company’s representative data and thus identify areas for improvement. It can also provide evidence of successful initiatives, which can then be celebrated and used as examples for others. Additionally, data can be used to measure the progress of your company’s DEI initiatives over time. A common example you may have noticed is when companies proudly cite successful hiring and promotability rates among women or younger workers – your prospective employees will notice this.
One place to begin when thinking about implementing DEI initiatives is to identify a chief DEI officer, or an executive in the company that plays the most proximate role. It is ideal if this person’s role is dedicated to DEI, but for small businesses, that isn’t always possible. In either case, your keepers of data need to be in the room during these discussions, which will span recruitment, retention, promotion, pay, and benefits.
Next, your employees dedicated to understanding and promoting these initiatives should take a hard, holistic look at your data and beyond: recruitment, hiring, onboarding, patterns in exit interviews, etc. Even if you think you know the answer, confirm how many women, ethnic minorities, older people, younger people, LGBTQ-identifying employees, and so on, work for you. What stories does the data tell about engagement and, in particular, longevity? Where do you stand compared to peers and the overall market? It’s important that your company’s data reflects the narrative you want to tell.
Your team should also identify company goals. Do you want to make the C-suite more diverse if you’re satisfied with diversity levels in middle management? It is also important to consider who is accountable for driving change – and who, as objectively as possible, will monitor it? You may want to engage an outside consultant to help you look at underlying biases, which are pretty much unavoidable when it comes to personal decisions.
Finally, your data should include qualitative insights. How do your team members feel about the company’s diversity and inclusion efforts? It’s imperative to provide an anonymous outlet for employees to express concerns, ideas, or potential changes in relation to issues of representation and treatment. This feedback can help gauge employee satisfaction with current efforts and identify areas of improvement. It also is necessary to maintain an inclusive work environment.
These are the factors many, if not most, potential hires will consider. If African Americans and Hispanics make up 60% of the workforce, overall in your market, but only 20% of the team members at your company, this tells a problematic story. It also makes a difference in your business’ long-term viability.
If your company extends internationally, there are different compliance sensibilities to consider when collecting data. For example, a common misconception is that French laws forbid DEI initiatives. However, this simply means that discussions of ethnicity should instead focus on geographical and cultural origins, because "race" is not recognized, and race-related statistics are frowned upon. This isn’t necessarily at odds with the EU General Data Protection Regulation if the objective is to prevent workplace discrimination, it only indicates that a different approach is needed.
Having a clear starting point from the data can inform the company on where to focus efforts and resources towards DEI goals. This will allow them to track progress and measure results, ensuring the company is moving the needle and making real progress toward building a stronger organization.