How Diversity & Inclusion Can Drive Business Value with Detailed Data Analysis
Diversity, equity & inclusion (DE&I) is critical in building a productive workforce yet is too often misunderstood or neglected within company strategies. We live in an increasingly diverse society. It is only right that the workforce reflect this to better represent the client base, introduce varied perspectives and, as John Davidson of the FCA says, because “it is simply the right thing to do”. However, companies often fail to competently engage with DE&I and reap the benefits.
Diversity & inclusion is best described as fair representation and opportunity, regardless of ethnicity, gender, sexuality, or any other protected characteristic. And one without the other, it is often said, simply results in tokenism.
To tackle the issue, a detailed awareness of where the gaps lie is vital; and the key to this is data. With solid and reliable data, companies can gauge a full picture of diversity, equity & inclusion needs and formulate targeted solutions for tangible results.
Why Diversity & Inclusion Fails
Despite its many proven benefits, DE&I generally isn’t given the same time and attention as other business functions; in fact, many don’t treat it as a business function at all.
Data is core to DE&I and a vital foundation for its success, however, is often only skimmed over. Whilst other business functions are regularly evaluated against metrics and KPIs, DE&I is still deprioritised as a ‘nice to have’ with hirers applying the bare minimum to simply appease stakeholders.
Flippant attitudes towards DE&I are a widespread issue: according to Culture Amp’s DE&I Report 2022, only 41% of companies had formal DE&I policies in place, with only 42% having actual documentation. As well as this, 58% indicated that they had DE&I policies in name only.
Post Brexit and COVID-19, many hirers will be preoccupied in dealing with subsequent skill shortages and losses. However, in failing to address DE&I, they’re missing out on its potential to help overcome such challenges. In fact, Mckinsey & Company even warn of a “performance penalty” in failing to engage.
The Business Case for Diversity & Inclusion
So how exactly does diversity and inclusion enhance organisations and companies when competently addressed?
The business case for diversity, equity & inclusion is confirmed by numerous studies. With the potential for enhanced productivity, profitability, and worker satisfaction, Mckinsey & Company report that diverse and inclusive companies are better positioned for post-COVID recovery and growth.
From initial recruitment to long-term retention, DE&I is essential. According to Glassdoor, 76% of candidates evaluate a company’s DE&I throughout the recruitment process. This means, especially considering skill shortages, DE&I is vital to attract the right candidates and can keep you competitive on the job market.
As well as this, a recent Deloitte survey indicated that 39% of respondents would leave an organisation for a more inclusive one. It shows just how important DE&I is in workers’ decision-making and its strong potential to help companies retain top skills.
Additionally, Mckinsey & Company also found diverse and inclusive companies to have outperformed competitors by as much as 35% and to be 25% more likely to achieve above-average returns—increasing productivity and profitability too.
Data Strategy for On-going DE&I Monitoring
The main problem with DE&I data is its limited reach within companies. Too often, it’s collected at the beginning of a placement and simply stored within static HR platforms. This prevents it from having a measurable impact on wider company culture and actively driving DE&I forwards.
To truly make an impact, data must be monitored on a more regular basis so that companies can address DE&I changes as they happen. Whilst the standard for DE&I evaluation is for most companies annual, leaders in the field are setting the bar higher.
In a study by SHRM (Society for Human Resource Management), some companies were found to revaluate data at least every quarter, with some even doing so monthly. As well as this, some are widening the scope of their data, monitoring workers retained as well as new hires.
Within this, technology must also be considered. Many HR platforms are simply not equipped to support a successful DE&I data strategy: many operate offline, inhibiting wider company access and timely data sharing for quick responses. Many are also manual, meaning that duplicates and errors can negatively impact the effectiveness of DE&I initiatives.
Cloud-based Tech for Data Monitoring
The solution: cloud-based tech with automated DE&I reporting functions. With this in place, companies are better positioned for fast and effective DE&I responses. With the potential for multiple departments to access the same platform, DE&I data can be utilised across the company, as all parties are kept in the loop in real-time. And with automated functions, data entry can be kept accurate and error-free for more effective results. DE&I can become operational.
In conclusion…
As both a moral duty and potential tool for growth, companies can no longer afford to deprioritise DE&I. Going forward with a data-based foundation, companies can get vital insight into their workforce and evaluate areas for improvement. With this, initiatives can bypass assumption or bias and go beyond outward tokenism. This means securing measured results and mutual benefit for both the company and workforce with sustainable long-term success.