leveraging diversity and inclusion metrics to build an inclusive culture.

Diversity, equity and inclusion (DEI) strategies are critical for building a productive and effective workforce. When you create an inclusive workforce that reflects your customer base, it can boost innovation, strengthen your brand image and improve customer satisfaction.

Despite these facts, many organisations fall short in building a DEI-friendly culture. This isn’t due to a lack of trying. In fact, according to our 2023 global Talent Trends research 81% of the employers we surveyed already make DEI an integral part of their overall talent strategies. Unfortunately, many organisations often miss the crucial step of measuring the effectiveness of their strategies. 

Without using proper diversity and inclusion metrics, it can be difficult to assess what strategies are working, meet company goals and identify problem areas.

In this article, we’ll delve deep into the importance of using DEI metrics and provide guidance on identifying the right metrics for your organisation.

why is diversity hiring and building an inclusive culture so important?

You can define diversity in the workplace as the process of building a workforce that portrays the same traits, characteristics and demographics as your customer base. In short, your workforce should consist of different genders, races, ages, backgrounds, educational levels and abilities. Inclusion, on the other hand, is about creating a culture where all team members feel welcome and valued and share a sense of purpose. 

Countless studies, including those conducted by McKinsey & Company, the Boston Consulting Group, and Deloitte, have consistently demonstrated the undeniable connection between diversity, inclusion and business success. For example, an effective diversity and inclusion strategy can:

• spur innovation: Multiple studies show that diversity in the workplace can spur creativity, help teams make better business decisions and drive innovation.
• drive higher engagement: Millennials working in an inclusive workplace are 83% more engaged than those who don’t.
• raise recruitment and retention outcomes: Studies show that 80% of workers want diversity and inclusion in the workplace. Having diversity hiring strategies in place and building an inclusive culture can help you attract, acquire and retain skilled talent.
• boost productivity: According to a LinkedIn report, companies that prioritise diversity and inclusion are 35% more productive.
• increase profits: A recent study reveals that organisations that focus on diversity and inclusion in the workplace are 25% more likely to outperform organisations that don’t make DEI a priority.

Despite these great benefits, it's projected that only 4% of organisations excel at designing and executing DE&I programmes. This highlights the urgency to closely monitor the progress of your initiatives from start to finish and pinpoint the specific areas that need improvement.

diversity and inclusion metrics

Using metrics to track success is a key component of any business plan and diversity and inclusion strategies are no exception. It’s only through robust diversity and inclusion analytics that your organisation can accurately assess whether it's meeting its goals or needs to improve in one or more areas.

The good news is that there are several DEI metrics you can use to effectively track the success of your diversity efforts, including:

diversity of your candidate pool

Diversity in the workplace should start during the hiring process. This can be achieved by identifying the most effective sourcing channels, keywords and boolean searches that appeal to candidates from different groups (e.g., women, ethnic minorities, individuals with disabilities).

To ensure that the diversity of your candidate pool carries over into the workplace, it’s important to compare the demographics of your candidate pool with the demographics of your new hires. If there is a disconnect with one or more demographic groups, you may need to reassess your hiring process as well as your company’s diversity and inclusion policy. 

Conducting frequent audits of your organisation's diversity policies and procedures is not only the smart thing to do, but in some cases it may be legally required. Always adhere to the guidelines and regulations established by your hiring authority at the local, state and federal levels. For example, in the UK the Equality Act 2010 makes it law that every private, public and voluntary organisation must not discriminate against their employees or the people that use their services because of their particular characteristics.

demographics across organisational levels

Diversity in hiring must go well beyond entry- and mid-level workers. To drive meaningful results, diversity at the C-level is critical. It can be easy to miss the mark in this aspect if you’re only tracking DEI results for the company as a whole.

Instead, it’s essential to measure demographics at each organisational level within the company. This DEI metric is easy to calculate by dividing the number of workers within a specific demographic group, such as gender, race, age and ethnic group, by the total number of employees at the organisational level. For example, if your organisation has 100 managers and 10 are women, you can conclude that 10% of your managers are women ((10/100) *100). You can use this calculation for all demographics at all organisational levels to determine if you’re meeting company goals.

employee satisfaction

Tracking your diversity hiring metrics is an important first step, but you also want to ensure that your workers are happy on the job. If your employees are happy and satisfied on the job, it can be an indication that they feel valued and included by the company. Using the employee net promoter score (eNPS) is a great way to track employee satisfaction.

To determine your eNPS, you can use anonymous pulse surveys to ask your workers one question: 'How likely are you to recommend the company as an employer to your friends and family members?' Your employees can answer this on a scale from 1 to 10. Scores of 1-6 are your detractors who may not be happy in the workplace and have a higher risk of leaving. Scores of 7-8 are your passive employees who have a neutral opinion about your organisation. Scores of 9-10 are your most loyal employees who are very happy in the workplace.

Again, it’s important to compare your company's eNPS for various demographic groups. This comparison can help you identify a disconnect with specific demographic groups within your organisation. You can also follow up your main survey questions by asking ‘why or why not?’ These details can help you better understand exactly why some of your workers aren’t happy on the job.

retention rates per group

Attracting and acquiring diverse talent is one thing, but building an inclusive workplace that encourages workers from all demographic groups to stay is another thing. One of the best ways to determine if your diversity and inclusion strategies are working is to track retention rates by demographic group.

For example, let’s say your diversity and inclusion analytics reveal that retention rates among your male workers are twice as high as rates for your female workers. This discrepancy could reveal many issues within your workforce structure, such as unequal pay or that women aren’t promoted at the same rate as male workers.

While a quick calculation can help you analyse retention rates by demographic groups, you may need to dig deeper, such as conducting exit interviews, to determine why some rates are lower than others.

voluntary and involuntary turnover

Tracking employee turnover rates by demographic can help determine if your employees are satisfied with their roles and your organisation. First, you want to track new hire turnover. You should measure these turnover rates at 1, 3, 6, 9 and 12 months. High turnover at these early stages of employment could indicate dissatisfaction with the role or your company in general. Conducting exit interviews, or at least exit surveys, is essential and the best way to determine why these new hires are leaving.

Secondly, don’t overlook involuntary turnover rates. Some types of involuntary terminations are just part of managing a workforce. However, high levels of involuntary turnover could be a sign of a greater problem within the workplace, such as inadequate or unfair training, unconscious bias or even discrimination.

It’s crucial to not only track these HR metrics regarding voluntary and involuntary turnover but also to use surveys and interviews to determine why your new hires are leaving or why they weren’t a good fit for your workplace.

equal pay and equal work

Despite decades of discussion about equal pay for equal work, women around the world still only earn $0.77 per $1 when compared to their male counterparts. This number is even lower for women within various minority groups, such as older women, black women and Latinas.

Listing compensation on job openings can be the first step considered during equal pay audits. Today, many governments are pushing for pay transparency legislation which demystifies salary and compensation for new job openings listed. Having full transparency of the rates and total compensation for all positions can be a useful tool in identifying disparities between pay and job duties assigned for new employees.

Measuring equal pay for existing employees can prove to be a bit more challenging. After all, there are numerous factors that go into determining salaries, including experience, qualifications and length of service. You also need to consider other factors, such as bonuses, stipends and overtime hours. By factoring in combined salaries, you can see how your company is performing when it comes to offering equal pay and equal work opportunities.

For example, breaking down overtime pay by demographic groups may reveal issues, such as that younger workers are disproportionately offered overtime or that male workers receive raises at a faster rate than women.

employee advancement rates

Diversity hiring and building an inclusive culture are key components of any DEI strategy. But, if you want to maintain diversity and inclusion at all organisational levels, you must ensure that your employee development and advancement programmes are fair, unbiased and available to all workers and meet your DEI goals.

Tracking HR metrics allows you to see how many workers from specific demographics complete training programmes or apply for in-house advancement opportunities compared to your entire workforce. Using calculations, such as promotion rate by demographic group, can provide the insights you need.

tools for tracking DEI metrics

Today’s technology makes it easier than ever to capture massive amounts of talent data and transform it into valuable HR analytics. For example, application tracking systems (ATS’s) can make it easy to track your applicants throughout the recruitment process, including demographic information. 

HR software, such as CruncHR, BambooHR or Workday, can help track additional HR metrics and DEI metrics, such as promotion rates, pay equity, training completion rates and payroll information, including salaries and overtime. 

Using these tools can help to provide real-time analytical data to continuously track your DEI metrics and automate some key HR processes. However it is important to remain mindful that such tools, specially those powered by AI, can unintentionally discriminate with certain algorithms. At the basis of every good diversity inclusion process is a human with good intentions.

Get quick and easy access to the most essential HR metrics you should track throughout your employees' journey by downloading our cheat sheet.