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Before the deep dive, cover the DEI basics

By: Ralf Bovers

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

Increasing Diversity: Progress in Action

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 level 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 said.

“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. – Stéphanie Frappart, first woman to referee a men’s World Cup match.“

Whether or not we can directly attribute it to Frappert’s historical World Cup appearance, women in leadership and gender parity have made huge strides in recent years. For their employers, diversity, equity, and inclusion (DE&I) has moved up the agenda and they know the importance of diversity, especially 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. It is widely recognized that there is a strong business case for diversity, but progress has been slow, McKinsey notes.

Measuring Diversity, Equity, and Inclusion

With this in mind, business leaders expect their HR teams to provide them with an analysis of 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 provide the business with DEI data. This holds for gender, but also other types of diversity such as ethnic and racial diversity and even age diversity. Instead of going immediately for a sophisticated analysis, the most basic descriptive statistics would be a good place to start.

These baseline metrics can help you indicate where you have DEI gaps and opportunities.

Six Basic DEI Metrics to Track

1. Current representation in the organization

2. Representation of new hires

3. Turnover rates per group

4. Promotion rates per group

5. Representation at leadership levels

For this, you would divide the ratio of majority/underrepresented groups

6. Pay Gap

Compare average salary for each group per job grade. Also, take into consideration hours of work.

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.

Next Steps

There is much more you can do to quantify diversity, equity, and inclusion: segmenting across the recruitment funnel, analyzing your failed hires rate, looking at succession plans, reviewing engagement surveys, organizational network analysis, etc. However, if you are at the beginning of your journey and don’t have a team of advanced analysts in-house, the six metrics above will put you leaps and bounds ahead of many other organizations who are just getting started.