The noise around DE&I and culture wars, whether real or perceived, tends to dominate social and other media, often seeping into the workplace and its culture.
Regardless of outside opinion on DE&I, senior leaders in HR, recruitment and related sectors, need to understand what a business must do to ensure that employees feel psychologically safe and have a sense of belonging so they can perform at their best, unhindered by bias and discrimination. But where should you start?
The answers are rooted in collecting, tracking and analysing data, away from bias and emotion, so you rely only on neutral intelligence. It is imperative to accurately measure the effect of DE&I strategies – ideally doing so prior to implementation – so you can benchmark, monitor and understand progress, identify hot spots that call for improvement, foster an equitable environment and understand how what you do – and do not do – affects employees as they move through the organisation.
Workforce metrics
Data collection must begin at the beginning of the employee lifecycle, with metrics collected around who is offered an interview, who receives a job offer and the numbers accepting offers. If people from diverse backgrounds do not approach the organisation, go no further than sending in an application form or interview, or if a recruit subsequently leaves the business soon after joining, investigations are necessary.
Both qualitative and quantitative data should be collected, along with information relating to events that occur at various stages of the employee life cycle, such as performance review scores, time spent with leaders and work allocation. Data on pay and gender parity and within that, turnover, promotion, succession, inclusion and performance, are useful measures, too.
The benefits of collecting DE&I data
Gathering DE&I metrics is not a nice-to-have but is a critical tool that will provide insights into your biggest asset, your workforce. This has a direct effect on productivity, output, reputation and appeal to clients, customers and candidates.
Employers who regularly assess DE&I metrics are armed with evidence that will enable them to focus on discrepancies and build actionable steps for improvement. Tracking DE&I not only strengthens company culture but contributes to greater innovation and performance. For example, McKinsey reports that companies with more than 30 per cent of women executives were more likely to outperform companies with a percentage of women in the 10 to 30 per cent margin. And these companies were more likely to outperform those with fewer, or no, women executives.
When it comes to ethnic and cultural diversity, McKinsey’s findings are equally persuasive. In 2019, top-quartile companies outperformed those in the fourth quartile by 36% in terms of profitability. McKinsey states also that the likelihood of performance continues to be higher for diversity and ethnicity, than for gender, a continuing theme in its research to date.
If you get it right, collecting and acting upon relevant data can help you to hit ESG-related diversity reporting targets and meet stakeholder expectations around DE&I.
Avoid bias by focusing on data
When it comes to performance it is important to look beyond the numbers. Worse performance ratings for a demographic could reveal bias not just in reviews, but also in terms of access to opportunities that would have boosted performance. Therefore, results should be reviewed at an overall organisational level, as well as functional level, by department.
In terms of futureproofing, an organisation’s succession plan and pipeline should reflect what leadership would look like if diversity objectives are met. If the goal is to have a C-suite with 50 per cent women, the pipeline needs to reflect this. Likewise, future leader programmes should reflect the DE&I goals of the business rather than the status quo.
Design KPIs around what you are doing to promote a diverse and inclusive workplace within and outside the organisation. Public metrics should cover key areas such as recruitment, employee, engagement, development, opportunities, promotions and reward. By making targets public, you increase accountability, and this will act as a motivator for sustainable and long-term action.
Be culturally sensitive
When it comes to invisible or unobvious demographic data collection, say when it comes to religion, sexuality or even race, it is vital to appreciate that obtaining metrics is not as simple as asking members of diverse or underrepresented groups to offer up information. Sensitivity is key as people from these groups carry a heavier emotional load and a feeling of being othered may mean they prefer not to identify certain aspects of themselves publicly.
Remember to keep intersectionality in mind and ensure your analysis covers inclusion and belonging that acknowledges that some individuals belong to multiple communities and will have different experiences. Also, be clear that qualitative data collection can be more nuanced than quantitative metrics.
UK-based candidates are, however, generally happy to share data relatively speaking, but this may not be the case universally, with local cultural sensitivities influencing what types of data can be requested at all. It is important to be aware of this so you can tailor your data capturing to suit specific regions, particularly if your workforce is global.
Legal requirements
Some metric collection is mandatory but what is required by law is subject to updates. For example, in the UK, businesses with more than 250 employees must now report on ethnicity and disability pay gaps as well as their gender pay gap. The EU has different stipulations around what metrics must be collected by law, as does North America. Be sure to check local laws to maintain compliance.
Annual surveys are often the vehicle of choice for data capture, but such structures may be seen as formal and off-putting for some employees. Look into why people may feel reluctant to share data and make adjustment where relevant. For instance, do your questions reflect your workforce or are they performative?
ERGs and staff networks can be a good way to capture lived experience to get data. Look for alternative ways of measuring belonging, psychological safety, fairness, inclusivity and equity, which are as important as demographic metrics.
If you engage your employees and meet them where they are rather than expecting them to do the legwork, your results will reflect this. Reassure people that their feedback is anonymous and subject to data protection laws and be transparent with what you are doing and why.
Widen your data capture
Broadening your data capture to capture metrics you do not have that might be interesting. Tracking gender pay gaps can reveal disparities, but analysing promotion rates can identify structural barriers within career advancement.
For instance, research published in 2022 by KPMG UK shows that person’s socioeconomic background – measured according to parental occupation – has the clearest effect on an individual’s career progression, compared to any other diversity characteristic. The firm carried out the biggest ‘progression gap’ analysis ever published by a business, with experts from the Bridge Group scrutinising the career paths of over 16,500 partners and employees at KPMG over five years. The researchers assessed the average time it took individuals to be promoted, noting their gender, disability, sexual orientation, ethnicity and socioeconomic background.
Data on socio-economic background had the strongest effect on how quickly an individual progressed through the firm – employees from lower socioeconomic backgrounds took on average 19 per cent longer to progress to the next level, when compared to those from higher socio-economic backgrounds.
Finally, be mindful of the human experiences at the heart of the data you collect and never forget that their individual experiences go far deeper than form filling.
To find out more about how you can collect DE&I metrics and use them to build a FAIRER workplace, please get in touch.
