Why Does DEIB Matter?
With incidents of social injustice making daily headlines around the world, concerns about racial and gender equity increasing, and a growing focus on well-being and empathy in the workplace, its no surprise that organizations are devoting more time, energy, and resources to advancing their diversity, equity, inclusion, and belonging (DEIB) initiatives. Decades of research have demonstrated the importance of focusing on DEIB within organizations. It not only creates a better experience for employees, but in many cases can drive bottom-line benefits while fulfilling the expectations of shareholders and consumers.
More than ever, consumers and shareholders are paying attention to the practices of the brands that they support, requiring more inclusive marketing and product offerings along with an organizational commitment to driving action around social inequity. In addition, younger generations are seeking employment from organizations that prioritize DEIB , as it is becoming a prerequisite for applying to jobs as well as a driver of engagement.
There are also a number of organizational benefits to improving DEIB. Higher levels of diversity and inclusion lead to greater innovation, better decision-making, improved culture and retention, and more upward mobility for marginalized groups. Organizations that have successful DEIB programs have also been shown to have increased profits. In fact, a McKinsey report found that companies in the top quartile for racial, ethnic, and gender diversity are 25% more likely to be more profitable than the national median for their respective industry. For every 10% increase in the racial and ethnic diversity of the senior executive team, there’s a 0.8% increase in earnings. Overall, prioritizing DEIB creates a competitive advantage that attracts new talent, creates a better employee experience, and drives the business.
Where should organizations focus?
Implementing a DEIB strategy can seem like a large undertaking, as effective programs are not created in a silo or as a one-off. In spite of this, it is important that organizations track their progress and hold leaders accountable in working to create a more equitable workplace, as an effective DEIB strategy is practiced and demonstrated throughout the organization, which often requires some soul-searching and organizational change.
When getting started, collecting the right data by conducting a lifecycle review is essential to establishing an organizational baseline. Within the lifecycle review, organizations should consider various metrics, including employee and leadership representation, recruiting and selection processes, internal mobility and promotion, retention and attrition data, budget allocation, and employee experience. Organizations can leverage this data to identify policies that have some room for improvement and create goals based on their baseline.
By gathering demographic numbers, you’ll learn how diverse your population is, but you can also see how you compare against market and industry benchmarks. Looking at representation across the organization isn’t enough, however. Instead, organizations should look at representation in different job functions, as well as in leadership positions. For example, having more minority representation in positions that are historically overrepresented by minority groups does not mean that the organization is diverse. People of color are historically overrepresented in frontline positions, so having a larger Black or Latinx population, for example, in these types of positions should not be misconstrued as good representation. This type of context should be considered when analyzing data across the organization and creating goals.
Reviewing your recruiting/hiring strategy can help organizations identify ways to attract a larger, more diverse pool of talent and minimize barriers to diverse candidates being hired for positions. Once organizations onboard more diverse talent, they need to identify ways to ensure all employees feel welcome, included, and have a sense of belonging in the organization. Measuring employee experience and sentiments is an effective way of capturing your employee insights to identify where and how to drive improvements, as well as ensure your employee value proposition is realized across demographic groups within the organization. By identifying which factors are leading to employees staying and/or leaving, these insights can also help you determine methods for retaining key talent.
Understand who is leaving the organization
One of the most overlooked metrics concerns generating reliable exit data. Having a robust talent acquisition strategy that aims to attract and hire diverse candidates is vital, but it will fail to create any meaningful difference if the organization can’t retain this talent. By moving beyond data that looks at the diversity of talent coming into the organization to include metrics of exiting employees, organizations can better assess whether they are becoming more or less diverse with time.
The focus on retention has become increasingly critical over the last year as organizations continue to struggle with higher turnover throughout what has been labeled as the “Great Resignation.”
Build diverse leadership teams
In addition to focusing on attracting and retaining diverse talent, it is critical to track representation of leadership. It is not simply enough to have diverse talent if these employees are disproportionately seated in lower-level positions that typically come with fewer growth prospects. Organizations that truly inspire and cultivate talent are able to build a roster of senior leaders from all walks of life.
Organizations that are most successful in building diverse leadership teams typically do so not by directly recruiting diverse executives (although that helps!) but by working to ensure that their company has established programs and mentorship initiatives aimed at growing and developing talent among underrepresented groups. After all, the best way to make diverse employees truly believe that they can succeed at your organization is to construct a roster of diverse leaders.
Ensure your employee value proposition is reaching everyone
Beyond simply looking at demographics, capturing the perceptions of exiting employees can help shed light on the extent to which a company is fully realizing its employee value proposition. Understanding and measuring whether the ability to grow, contribute, take on meaningful work, and other critical aspects of the employee experience is being realized equally across populations is critical to supporting meaningful change. Organizations that succeed in creating a meaningful DEIB strategy are able to create a work environment where what an employee looks like or the gender with which they identify is not a predictive factor in how likely they are to feel that they can challenge their limits, have their voices heard, or be their authentic self at work.
What does success look like?
Companies that are truly able to bring their DEIB strategy to life can articulate the value of these initiatives across job levels, are able to build accountability for their success, and – most importantly – are able to help employees understand how these programs benefit everyone.
Driving policies and action in support of fostering more diverse and inclusive organizations is critical to future success. Your employees, customers, and shareholders expect it. Doing so will not only create a more equitable organization but a stronger and more competitive one, too.
Taking the pulse of your overall DEIB experience will differentiate your organization in the marketplace. By working with a partner like Perceptyx, you can develop a strategy to measure DEIB and easily track the right metrics while developing a thorough understanding of what drivers will improve them over time.
Schedule a demo today to learn more.