Diversity and inclusion have become part of business strategy, but how do you measure their success? Mark Fenton outlines the key areas organisations need to assess when determining the effectiveness of their D&I initiatives.
Diversity and inclusion (D&I) have shifted from being two HR buzzwords to key components of business strategy for many of the world’s best and most innovative companies.
Businesses recognise that all organisations share the same three strategic challenges that either inhibit or enable success over the longer term:
- How to hire, retain and develop top talent;
- How to understand and connect with clients; and
- How to outsmart the competition.
There has been a myriad of initiatives developed for organisations seeking to embrace and integrate diversity and inclusion programmes into their office culture, with a view to create a more attractive brand that will appeal to future top talent, as well as encouraging and strengthening the existing team. It will also enable organisations to understand clients better, and generate an increasingly innovative workplace to get the jump on competitors.
Measuring success
However, despite all of these initiatives, less attention is being paid to providing organisations with specific success measures for their D&I programmes (including quantitative and qualitative key performance indicators [KPIs]), and identifiable changes that should follow.
Here are nine areas that are worthy of consideration when looking to measuring the success of your D&I initiatives. These are best assessed over time, across several diversity areas, such as gender, ethnicity, disability, sexual orientation and age (with the consideration that some may be subject to restriction around data capture availability).
- Representation
Look at representation in areas across governance (boards, committees) and hierarchical levels. Look at the promotions that have been attained and by whom.
- Recruitment
Assess your applicant pool, who is brought in for an interview and who receives a job offer. It’s important to also assess the diversity of your selection panel.
- Remuneration
Conduct a gender pay gap analysis of all employees.
- Financial savings
Analyse the budget savings attributable to your D&I initiatives such as the utilisation of remote working (which can reduce office footprint and associated costs), the promotion of internal talent (which can reduce hiring costs and talent turnover expenses) and the improved employer brand (which can be effectively generated through day-to-day engagement and word of mouth without expensive marketing campaigns).
- Employee turnover
Assess employee turnover rates and career break returners following parental, care, illness, sabbatical or other leave.
- Employee resource groups
Determine the level of engagement in employee resource groups.
- Training
Check the completion of D&I training such as unconscious bias, inclusive leadership and cultural awareness. Also, investigate the level of access employees have to these programmes.
- Policies and procedures
Assess the policies and procedures in the organisation to ascertain whether they are supportive of gender and minority groups, parental supports and workplace agility programmes including flexible and remote working, talent sponsorship and codes of conduct.
- Voice
Collect feedback on your D&I programmes from employees (via staff surveys), customers (through net promoter scores), and suppliers (utilising supplier diversity policies).
In parallel, KPIs can be applied that cover, for example, employee churn rates, performance ratings, employee engagement/job satisfaction, absenteeism, union feedback, grievances or industrial relations-related issues. This data can be further enhanced by overlaying the empirical research that correlates integrated D&I practices with improved financial performance and increased brand value.
More than a buzz word
An awareness of the power and influence of D&I on corporate culture in conjunction with a framework to tangibly measure and communicate its ability to overcome key business challenges around talent, clients and competitors make D&I much more than a ‘buzz’ issue within the corridors of HR. It is the business strategy for 2020.
Mark Fenton is the CEO and Founder of MASF Consulting Ltd.
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