Measuring Diversity: The Metrics That Matter
McKinsey & Company’s 2018 “Delivering through Diversity” report stated companies in the top quartile for ethnic/cultural diversity on executive teams were 33 percent more likely to have industry-leading profitability. Additionally, companies in the top quartile for gender diversity on executive teams were 21 percent more likely to outperform on profitability and 27% more likely to have superior value creation. These facts are proof that efforts to elevate your D&I initiatives can have a bottom-line impact on your organization.
Moreover, research has proven that, without inclusion, diversity is unsustainable.
Additionally, the idea of “belonging” is becoming increasingly important to a strong D&I strategy. Belonging is the sense that all employees can be their authentic selves, and as such, are essential to their team’s success. However, to continue effectively driving your D&I initiatives in the right direction, you need to know what is working and how well.
The metrics that measure the success of any people initiative are the same for D&I. Performance indicators, especially financial performance (specifically profit margin), should be paired with softer metrics for a complete picture. Correlate financial performance with measurements of employee engagement, employee retention, talent attraction, customer orientation, employee satisfaction and employee participation in decision-making.
In addition to these, there are a couple of specific initiatives you should implement to focus on measuring D&I:
From a broad view, your company may appear to be diverse, but consider segmenting the company several ways to ensure it is representative of all levels and functions. Completing a quarterly or biannual report that shows the following (compiled from Project Include) will lend insight into your initiatives’ success:
- Employees overall, by function, seniority and tenure (cut by demographics)
- Employment status (i.e., full-time, part-time, contractor) (cut by demographics)
- Management and leadership (cut by demographics)
- Salary (cut by demographics) – Raises and bonuses (cut by demographics)
- Board of directors (cut by demographics)
- Candidate pools and hiring funnels, by role (cut by demographics)
- Voluntary and involuntary attrition rates (cut by demographics)
- Promotion rates (cut by demographics)
- Formal and informal complaints (cut by demographics) – Complaint resolution status (cut by demographics)
As an executive placement firm specializing in workplace diversity, we ensure that our clients have a keen understanding of what it will take to create the best culture to create a sense of belonging for all cultures. We aren’t just an executive headhunter. We are committed to being the best D&I search partner that we can be. Give us a call if you’re interested in finding out more.