Get answers to frequently asked questions about workplace diversity and discover the best practices successful hiring managers use to build a diverse, inclusive workforce.
Prioritizing diversity, equity and inclusion (DE&I) in the workplace can deliver many benefits for employers. Tracking your company’s metrics in this area is the first step to success. Here’s what you should know to effectively measure the results of your DE&I program.
The US is often depicted as a “melting pot” due to the diversity of cultures and ethnicities, and that trend will only increase in the coming years. Nearly half (48%) of Generation Z are racial or ethnic minorities, and by 2044, groups currently designated “minorities” will account for the majority of the population, according to Census data. By 2065, the Pew Research Center predicts, the country won’t have any single ethnic or racial majority: The population will be 46% non-Hispanic whites, 24% Hispanics, 14% Asians, and 13% Blacks. As the face of the nation evolves, diversity, equity, and inclusion will be more important than ever to employers. And employees—especially younger workers—expect to see a workforce that reflects their reality.
What is DE&I?
While DE&I starts with hiring a diverse workforce, that alone doesn’t guarantee equity and inclusion. Here’s a closer look at each element of DE&I:
- Diversity means having a varied workforce. Most often, employers think about this in terms of race, ethnicity, gender, and sexual orientation. However, a successful DE&I program goes beyond these factors to encompass religion, age, social class/background, disabilities, neurodivergence, educational attainment, criminal history, and more.
- Equity means impartiality within programs and processes. This includes equitable pay for comparable work and ensuring that each individual has the support needed to create a level playing field to succeed. Equitable support might look different for different people. For example, a single parent might need flexible working hours to accommodate their child’s schooling; a neurodivergent employee might need a quiet space to work.
- Inclusion means employees feel respected, valued, and safe at work. They are confident that their opinions matter, their input is considered, and they can comfortably express their true feelings.
The concept of diversity in the workforce got its start in the 1960s when Title VII of the Civil Rights Act of 1964 prohibited employment discrimination on the basis of race, sex, color, religion, or national origin. To help employees adapt to more diverse workplaces, companies began providing diversity training.
Today, US companies spend some $8 billion annually on diversity training programs. No longer just an item to check off on an HR compliance list, diversity is increasingly seen as a critical business strategy. Organizations are hiring Chief Diversity Officers to develop and execute effective DE&I plans, using diversity recruiters to attract a wider range of candidates, and employing consultants to assist with assessment and strategic planning.
Positive Impact of DE&I
There’s good reason for employers to focus on DE&I. Successful DE&I initiatives have been shown to have a positive impact on a variety of factors that matter to a business. These include:
- Talent acquisition: More than three-fourths (76%) of job seekers say a diverse workforce is an important factor when assessing job offers. The percentages are even higher among Black (80%), Hispanic (80%) and LGBTQ (79%) candidates.
- Employee satisfaction: Companies with effective inclusion policies see a 50% reduction in employee turnover—something that’s increasingly important in today’s challenging labor market. Our recent survey discovered that 81% of all employees would consider leaving their jobs if their employer weren’t committed to DE&I.
- Alignment with customer base: Minority consumers’ buying power is on the rise. Native American, Asian American, and Black consumers alone account for 17.2% of the total buying power in the US.
- Decision making and innovation: Diverse companies have a 19% higher innovation revenue for new products than comparable companies lacking diversity. In addition, 72% of employees believe that diverse workforces are more productive.
- Corporate performance: Those organizations with the most gender and ethnic diversity are 25% and 36% more likely to have above-average profitability than less diverse firms.
Measuring Effectiveness of DE&I
How well is your DE&I strategy working? Only 9% of HR professionals rate their companies’ DE&I initiatives as “highly successful.” And if you think your organization is one of them, be aware that your perception may not be reality: 71% of Black and 72% of Hispanic employees feel their employers should do more to boost workplace diversity, compared to just 58% of white employees.
HR professionals say a lack of metrics is one of the top barriers to effective DE&I. Even companies that do track DE&I metrics typically focus on those related to employees in protected classes under Title VII—not other types of diversity, such as disabilities or whether employees have college degrees.
Improving the effectiveness of your DE&I program starts with measuring results. The specific metrics to track will vary based on your company’s current status, goals, and industry benchmarks. Examples of metrics you may want to measure include:
- The percentage of diverse recruits and hires (women, minorities, fair chance talent)
- The percentage of diverse employees in leadership roles
- The percentage of promotions or raises going to diverse employees
Measuring representation of identified groups during all stages of the employee life cycle will help you identify where you may be falling short. For example, are 50% of your job candidates women? While this may seem like a positive statistic, if only 10% receive an offer and 5% are hired, there is still work to be done. You can also compare industry and/or national averages with your company’s metrics to see where you stand relative to your competitors.
While DE&I success starts with the hiring process, it doesn’t end there. You should also track diversity statistics regarding employee engagement and retention. For example, you can measure various groups’:
- Overall retention
- Average length of employment
- Turnover by department or position
- Participation in training programs
Data on inclusion and equity can be harder to measure and quantify than diversity. To unearth employees’ opinions, it’s important to maintain regular communication and solicit feedback. For example, you can use employee surveys or data from employee reviews to assess whether employees feel included and supported. There are many software options available to easily solicit this information and interpret the results.
For larger employers, honest discussions within employee affinity groups—for example, an LGBTQ or Black employees’ organization—can surface potential shortcomings as well as successes of your DE&I efforts.
Finally, you can look at the makeup of various teams or departments within your organization. How successful are various teams in terms of innovation, revenues, efficiency, and other measures? If you find that your most effective teams also rank highest on DE&I measures, that’s positive reinforcement your strategies are paying off.
Build Value With a Diverse Workforce
Embracing DE&I can make your company a more desirable place to work, enhance your reputation with customers, and boost organizational effectiveness and innovation. Because DE&I starts with the hiring process, using an experienced background check service, like GoodHire, can help ensure a fairer screening process. Our platform offers features to support your diversity hiring efforts for informed decisions that align with your DE&I goals.
The resources provided here are for educational purposes only and do not constitute legal advice. We advise you to consult your own counsel if you have legal questions related to your specific practices and compliance with applicable laws.