How to Benchmark Diversity and Inclusion in Your Business
Humans seek comfort in what they know. We tend to avoid the different and strange, gravitating instead towards familiarity. Sure, we think to ourselves, change might be for the better, but it could also be for the worse. Better the devil you know.
This force of habit isn’t great for an organisation’s diversity and inclusion efforts. It means that even the most open-minded and open-hearted interviewer can unconsciously prefer someone who looks, talks and acts like them over another candidate whose differences could bring real value to the company. Diversity, as we now know, is fantastic for the bottom line.
Diversity and inclusion thus demands an organisation’s attention if it is to be realised. Measures must be put in place to spur these efforts on, track their progress and evolve them over time. This helps to erase often unconscious blind spots that we all possess.
The key question is how do you track such seemingly ambiguous concepts as ‘diversity’ and ‘inclusion’? In this article we’ll take a look at doing just that.
Why measure diversity and inclusion?
Let’s first take a moment to understand what each of these words means:
- Diversity is measured in demographic representation.
- Inclusion is measured in the employee experience.
They essentially form different sides of the same coin, and are equally important from both financial and corporate culture perspectives.
According to this 2018 McKinsey report, companies in the top quartile for diversity are 21% more likely to have superior financial performance than companies in the bottom quartile. Why? Diversity encourages broader perspectives and understanding of market needs enabling business to better address and resolve business problems.
The dimensions of diversity
Diversity has become increasingly complex in the corporate environment. For the longest time, workplace diversity revolved simply around gender. However, organisations are now digging deeper to establish an employment mix representative of the broader population.
Today’s diversity and inclusion efforts extend to race, ethnicity, age, physical ability amongst many other dimensions. A representative mix of these dimensions is increasingly perceived favourably by both internal and external stakeholders. However, a certain business will likely have a different employment mix to another, depending on its goals.
For example, a 60+ year old recently arrived migrant might be of limited use to an accounting firm with a focus on digital transformation and Australian regulation, as their technical ability (due to age) and lack of understanding of local regulations (due to location) don’t meet the demands of the job. In this case, diversity and inclusion dimensions of focus must be location- and context-specific. In short, they need to be relevant.
The diversity and inclusion metrics to monitor
Once you’ve settled on the dimensions you need to focus on, it’s time to use metrics to analyse your current position and track your progress. These include:
- Representation: Which groups are over-represented and under-represented in your organisation? Don’t just look at representation at an organisational level, but break it down in individual departments and teams as well.
- Retention: Do you have trouble retaining individuals from a certain group? If you do, there’s probably a good reason for it – perhaps they don’t feel welcomed, supported, or a true part of the team.
- Recruitment: What type of applicants do you attract? Limited diversity highlights a need to sell yourself as a more inclusive employer. Perhaps you need a more universal employer brand or new hiring strategies to reach talent within your focus dimensions.
- Promotion: Who is selected to move up within your company? Tracking the demographics of promoted employees can be quite revealing. Lack of diversity is often more pronounced the higher up the corporate ladder you climb.
- Salary and benefits: This is one of the simplest metrics to highlight your current state of diversity and inclusion. Compare the rewards (financial and otherwise) offered to focus dimension groups with those offered to other employees. There should be equal reward for equal roles across the board. If there isn’t, you have work to do.
Things to consider when benchmarking D&I
It’s vital to first diagnose then continually track your organisation’s progress against these metrics. To assist in benchmarking diversity and inclusion, consider the following:
- Set and track targets: Your journey needs a destination. Set specific and measurable goals using the metrics above.
- Assign responsibility, ensure accountability: A party must be responsible for achieving those goals. If your diversity and inclusion efforts are treated as an afterthought, they’re doomed to fail. Incentivise success and hold the responsible party accountable.
- Report, review and evolve: Declare your successes and admit your failures. Get to know what works and what doesn’t. Your diversity and inclusion efforts must also evolve with your needs, so regularly review your objectives, metrics and targets.
We humans aren’t instinctively great at diversity and inclusion, but as the world gets smaller and markets get more competitive, diversity and inclusion is becoming less of a plus and more of a must for modern organisations.
Happily you now have the tools to diagnose, track and improve your organisational diversity. If you need assistance in attracting and retaining talent to meet your diversity and inclusion goals Ignite is ready to assist.