Before the deep dive, cover the DEI basics

By: Ralf Bovers

Diversity, equity and inclusion (DEI) are high on the agenda for companies, which are expecting their HR teams to report on their progress. When it comes to people analytics, you don’t have to wait until you can do a deep dive analysis – there are simpler ways to get started.

History was made at the beginning of December when Stéphanie Frappart became the first woman to referee a football match in the men’s World Cup. And even more unique was that one match – between Costa Rica and Germany in the early stages of the tournament – had an all-female refereeing team.

This kind of representation is important for others to see; they can imagine themselves in such positions. At every stage of her career Frappert has been a trailblazer, and now the path is laid for the next generation of women. “I am like a role model for women referees, but I think it inspired some women in society or in companies to take more and more responsibility,” Frappert has been quoted as saying.

And women in companies have been taking more responsibility. For their employers, diversity, equity and inclusion (DEI) has moved up the agenda and they know the importance of diversity – and having it visible at the leadership level.

It also makes good business sense. McKinsey, for example, found in its analysis from 2019 that companies in the top quartile for gender diversity on executive teams were more likely to have above-average profitability than those in the bottom quartile. Now it is recognized that there is a stronger business case for diversity, but progress has been slow, McKinsey notes.

With this in mind, business leaders are expecting their HR teams to provide them with analysis on how their teams are faring. However, though very important, it can be an overwhelming assignment. For example, a deep dive regression analysis of the gender pay gap can be time consuming and could even require bringing in consultants if you don’t have the expertise in house.

There are easier ways to start with providing the business with DEI data. This holds for gender, but also other types of diversity such ethnic and racial diversity and age diversity. Instead of going immediately for a sophisticated analysis, the most basic descriptive statistics would be a good place to start. Even these first steps can indicate whether you have a DEI problem.

Crunchr recommends starting with six metrics

  • Current representation in the organization
  • Representation in new hires
  • Turnover rates per group
  • Promotion rates per group
  • Representation at leadership levels – ratio majority/underrepresented groups
  • Pay gap: compare average salary for each group per job grade and taking the hours of work into account

Ideally, you can split out the results across segments of the organization – business lines, functional areas, locations, job grade – to get a more nuanced view and to quickly spot pockets in the organization that are doing well or not well.

Obviously, there is much more you can do: segmenting across the recruitment funnel, analyzing your failed hires rate, looking at succession plans, reviewing engagement surveys, doing an organizational network analysis, etc. However, if you are at the beginning of your analysis and don’t have a team of advanced analysts in-house, the six metrics above are a good way to start.