Diversity Inclusion Metrics
Diversity Inclusion Metrics

How to Define Meaningful Diversity & Inclusion Metrics

As we’ve mentioned previously, diversity, equity and inclusion (DEI) has become an important organizational initiative for most companies around the world.

Yet a measly 23% of HR professionals believe their D&I programs are highly effective. How do you know if your DEI program is effective? Is it inclusive enough? Diverse enough?

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Achieving your DEI objectives requires the same type of strategic planning and management as you would regularly deploy to reach goals in sales or budgeting. As with any other initiative undertaken by your company, it makes sense that there needs to be an effective method in place to measure metrics and assess the progress of your diversity and inclusion program.

It’s the only way to understand if your initiatives are rewarding the effort you’re putting into them.

Some of these may be much easier to measure than others. For instance, collecting information around gender, age and race demographics can be fairly straightforward. However, other types, such as LGBTQ+ or people with disabilities, can be more difficult.

If you already have a DEI strategy in place, you can pull benchmark goals directly from it. Your metrics will then be based on the goals you select; ideally, choose metrics that can be tied to milestones. Over time these metrics may be tweaked to reflect updated goals as your company and DEI strategy evolve.

Examples of diversity metrics (KPIs)

Initiative-focused

Initiative-focused metrics may be the simplest to track for your organization. Unlike some of the other KPIs, they are based on numbers. Some metrics you could use would be the percent of gender neutral bathrooms in your physical workspace, or demographic data such as the percentage of employees that identify as a certain gender.

Demographic-based

On the one hand, these may be easily measurable metrics, as they are commonly asked. Demographics such as age, gender identity, physical accessibility needs, nationality and racial identity, for instance, are not unusual information to ask an individual to provide. However, these should not be the only diversity KPIs you measure.

One of the challenges of using these metrics is that you can’t legally require an employee to disclose much of this self-identification information. Usually, a “prefer not to disclose” option should be provided for each of these questions, and while this should help employees feel more comfortable with answering your surveys, it also means you may not get the level of insight you hoped to.

However, using demographic DEI metrics in addition to some of the other methods listed here would help you with your analysis.

Ranked method

Ranked method statements are single statements that allow respondents to answer on a scale of 1 to 5. The range, from ‘strongly disagree’ to ‘strongly agree’, allows an organization to gauge how employees feel on certain subjects. These can be used together with the methods listed above for a better understanding of your DEI metrics.

Examples that can be used for this metric include:

  • I have opportunities to grow here
  • I can share my opinions without fearing repercussions
  • I believe management respects employees equally

Company-wide

These metrics help illuminate the impact that your DEI initiatives are having on your organization. As with all the others, they can be looked at alone but should also be connected to the other data that you glean from using the above methods.

Some metrics to use under this umbrella include overall sales growth as it corresponds to increases in diversity, brand sentiment as your DEI programs may influence the public opinion, and revenue by employee as it corresponds to demographic diversity. Still, be sure to consider the correlation closely; bear in mind that diversity and inclusion may not be the sole reason for, say, revenue increase, although it may be a contributing factor.

Correlational metrics

Once you’ve collected all the above data, it’s time to measure it against correlational metrics to understand your information. Some correlational metrics include:

  • Promotion rates
  • Employment status
  • Department representations
  • Pay rates

Outside-of-company metrics

These help you incorporate more data with fairly crucial information on vendor diversity (or supplier diversity) and average demographics in your local community.

Steps to setting meaningful diversity KPIs

Choose parameters

Your DEI metrics should be relevant to the local community. Targeting the wrong problems can result in a loss of valuable time and money. To be effective, you need to be willing to adapt metrics as needed. Setting the right parameters and metrics necessitates dialogue with local business leaders and employees as it requires a deep understanding of your local community and local challenges.

Vendor Diversity

Review data policies

With changing policies, it’s crucial to make sure that you have (or don’t require) consent to gather an individual’s sensitive information. Organizations must also review their data policies to ensure that any information voluntarily disclosed is stored in a way that obscures identifying data (for instance, making sure that IP addresses are not stored with data).

Select metrics for diagnosis, tracking progress, and ROI

These are three separate, but equally important areas that need to be addressed.

  • Metrics for diagnosis help you identify blind spots in your organization; for instance, representation. While you may have equal gender representation in your company overall, you may find that men fill more leadership positions and women more administrative roles.
  • Once you identify risk areas, it’s time to work out the metrics to track progress. The diagnosis measurement may act as your baseline, and then you can track improvements on that.
  • It’s imperative that you have metrics set up to track how successful your DEI initiatives are in improving your organization’s performance. Many times, this is quantified as increasing your ROI. This could be in several forms, such as higher revenue, greater market share, or even higher employee retention.

Baseline measures

Ideally, you’ll have your baseline measures in place before you start tracking any progression. If not, you can still compare your metrics to other industry benchmarks.

Set targets and responsibility

As diversity, equity and inclusion can be a slightly subjective, emotional matter, it’s especially crucial to set out well-defined, measurable goals. We may have preferences that we don’t even realize that can otherwise quash our best intentions. It’s a Goldilocks undertaking – we can’t have the goals be too ambitious, as this could spark resistance, but we can’t have them be too unambitious as they need to motivate individuals to make the commitment and effort. Once set, the appropriate individuals should be assigned responsibility for separate goals and targets. Performance management tools should ensure accountability.

Analyze results and outline new initiatives

As data rolls in, it needs to be analyzed. What’s working? What isn’t? How can it be modified for optimal results? You need to assign responsibility for reporting the findings, as well as responsibility for coming up with a plan of action in response to them.

Review regularly

As mentioned in the beginning, metrics and initiatives will evolve over time. Your organization should consistently review DEI metrics, updating them as needed to reflect your maturing business goals and DEI program.

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