To maintain the momentum of DEI, companies need to invest in 3 areas
Organizations of all sizes and from all sectors have pledged their support for DEI initiatives in 2020, including building more diverse and equitable businesses, and using their power for good. Now that the spotlight isn’t shining so brightly on enterprise DEI, what progress have organizations made against their promises? To understand the state of DEI’s efforts since 2020, the authors examined self-reported aggregate data collected from a subset of 48 of their clients, as well as their consulting experiences with other organizations. Overall, they see positive progress. But they also find that organizations could make better and faster progress if they were more intentional about how they build their DEI strategies. They identified three areas where organizations need to focus and invest to maintain DEI momentum: connecting the right strategy to the right accountability; collect and analyze the right data; and truly empower DCI leaders.
The 2020 murder of George Floyd – and the subsequent social uprising around racial injustice – catalyzed an unprecedented investment in diversity, equity and inclusion (DEI). Organizations of all sizes and across all sectors have pledged their support for black employees and other underrepresented groups, building more diverse and equitable businesses, and using their power for good.
Now that the spotlight isn’t shining so brightly on enterprise DEI, what progress have organizations made against their promises? Our company has partnered with hundreds of companies at various stages of DEI maturity over the past two years. To understand the state of DEI’s efforts since 2020, we looked at self-reported aggregate data collected from a subset of 48 of our clients, as well as our consulting experiences with other organizations.
Overall, we have seen positive progress. But we also find that organizations could make better and faster progress if they were more intentional about how they craft their DEI strategies. We have identified three areas where organizations need to focus and invest in order to maintain DEI’s momentum and deliver on their promises.
A good strategy is linked to the right responsible parties.
Sixty percent of organizations reported having a DEI strategy in place. However, we found that these strategies do not always focus on the right objectives or the right accountable partners. On the goals side, only 26% of companies said they have gender representation goals and 16% have racial representation goals. Businesses that want to drive positive DEI results need to focus on the basics: having a strategy with clear goals in place that are data-driven and measurable.
Focusing on advocacy can seem disappointing for an organization looking to make headlines by announcing new partnerships and initiatives. As basic as they may seem, representation goals are an essential foundation of any effective DEI strategy.
Representation goals – whether based on industry benchmarks or demographics for the appropriate city, state or country – are one element, but equally important is incentivizing leaders and create accountability systems to help make these strategies a Hit. For example, a leader may support a fairer promotion process in the abstract, but that support may waver when he realizes he has to let go of the way he has always made promotion decisions in the past to a different and more structured process among all eligible applicants. employees. Holding this leader accountable for change is a way to ensure continued compliance. Our data shows that few organizations have such accountability measures in place. For instance:
- 28% of companies hold C-Suite leaders accountable for progress against DEI strategy
- 23% of companies hold senior executives accountable for pay equity
- 12% of companies hold C-Suite leaders accountable for gender diversity, and 5% are held accountable for racial/ethnic diversity
- 7% are held accountable for gender diversity in promotions and 5% are held accountable for racial/ethnic diversity in promotions
This data helps us understand why so many organizations may experience stalled DEI progress in the face of what they believe to be an otherwise sound strategy. In their eagerness to embrace or accelerate their DEI efforts, they rushed through a collection of efforts and hoped that at least some would land. Instead, they must readjust their strategic goals and ensure that individual accountability goes all the way to the top.
Collect and analyze the right data.
Fortunately, we’ve found that most organizations have access to the fundamental data they need to create actionable strategy. Over 90% of companies collect gender data and 88% collect race/ethnicity data in their HR information system (HRIS). Most organizations also track this information in their talent pipelines: in their applicant tracking systems, 75% of companies collect gender data and 69% collect race/ethnicity data.
However, other information suggests that this data is underutilized. For instance:
- Employee attrition: 52% of companies analyze by gender and 40% of companies analyze by race/ethnicity
- Promotion rate: 46% analyze by gender and 33% of companies analyze by race/ethnicity
- Hiring results: 40% of companies analyze by gender and 31% of companies analyze by race/ethnicity
- Progress in the hiring process: 25% of companies analyze by gender and 23% analyze by race/ethnicity
Here’s an example of how it plays out: An organization we worked with wanted to diversify its leadership team. During a brainstorming session, they considered various ideas: hiring external candidates, starting an internship program to get an infusion of new talent to develop, etc. However, when they looked at their data, they found two things: (1) their top performing leaders were those developed internally, and (2) the representation of people of color was consistent across the board. until the step before VP, where there was a steep drop.
This information helped us quickly identify the real problem: to qualify for a vice president position, an employee had to participate in a leadership acceleration program, and the only way to gain access to this program was through a referral from a colleague who had already participated. Because previous cohorts were predominantly white, and research tells us we’re more likely to manage and invest in people who look like us, people of color were not nominated at the same rates. With this data-driven insight, leaders realized they were actively contributing to an inequitable system that was responsible for these results. It was much more empowering to see how they could change things for the better, instead of lamenting a “pipeline problem”.
Using and leveraging organizational data like this is not a one-time job. As with any data-driven initiative, organizations need to look at data consistently — monthly, quarterly, and year-over-year — to assess whether their interventions are working and, if not, how. adapt accordingly.
Strengthen the DEI leader (for real).
Organizations need a qualified chef to guide their DEI programs to success. It’s not a new idea. To research finds that organizations with a dedicated DEI manager are more likely to see leadership-level diversity gains than organizations without such a person. Perhaps that’s why diversity director positions have been on the rise for years. But companies can and should do more to take full advantage of this role. While 58% of companies in our data set have a dedicated DEI budget, only 21% of companies have a dedicated DEI budget. Senior role fully dedicated to DEI. In addition:
- Only 12% of DEI leaders have a team under them dedicated to DEI work
- Only 9% of companies have a DEI leader who is at the same level as other executives
Accountability without authority, or the ability to hold the organization accountable, is a recipe for burnout and stalled progress. This is a model of leadership so widespread that it has a name: the “glass cliff.” To research find that the people of marginalized groups (eg, women, people of color) are often hired into leadership positions during times of corporate crisis. The added stress leads to a shorter time in the role – the the average tenure of CDO positions is three years — and if the person cannot turn the tide, people question their leadership skills instead of questioning the underlying circumstances.
Empowering the DEI leader requires a real investment of time, money and access. This leader needs a dedicated DEI team that can refine the organization’s strategy and work with each of the organization’s various functions – talent acquisition, marketing, engineering, etc. – to adapt and execute a plan that corresponds to this strategy. Similar to HR Business Partners, these DEI “Business Partners” are a trusted extension of the team that can help each function meet challenges and iterate quickly, while communicating progress to senior management. Finally, an empowered DEI leader must have the ear of the company’s decision makers and the power to hold people accountable.
Over the past two years, we have heard frustrations from people at all levels of organizations. Employees are disappointed that their companies have seemingly walked away from their bold anti-racism commitments and DEI initiatives; leaders are confused that their strategies are not producing obvious or measurable results. Transforming inequitable systems is often slow work. But having a dynamic, data-driven approach, as we’ve described here, can accelerate change.
One of our clients saw this kind of change by making some adjustments to their hiring process. Initially, only 4% of employees were black, Latino or Native American. After reviewing the data, the team realized the problem: they hadn’t taken the time to create a representative pipeline in the initial stages – simply put, the candidate pool was almost entirely white. By changing the hiring process to address this issue, the company went to 8% black, Latino or Native American in six months. Two years later, this figure has risen to 15%. This client was able to have a short-term impact by focusing on hiring and measuring data to track progress toward desired changes.
This is the power of a good DEI strategy: a strategy that focuses on collecting and analyzing data, developing interventions based on that data-driven information, and holding leaders accountable for their progress.