DTT – Measuring Return on Investment in Diversity & Inclusion

ROIThese are the thoughts and takeaways from the latest Diversity Think Tank (DTT) held on Tuesday 20th May 2014 hosted by State Street Bank’s Pauline Miller (Vice President, Global Inclusion EMEA) titled ‘Measuring Return on Investment in Diversion and Inclusion.’

The following summary has been prepared to reflect a segment of the discussion held amongst senior HR and Diversity professionals from leading national and international businesses. Specific company details, experiences and examples have been omitted from this summary as all discussions are held under ‘Chatham House Rules’.

Diversity and inclusion in the workforce has been a hot topic within HR for many years now as companies and regulations put more and more emphasise on the importance of having a diverse workforce. But from a business perspective the question is how can you actually show the return on investment from D&I, measure the impact and demonstrate its importance to business leaders?

Measurement of D&I

To start with it is important to define the difference between what is meant by diversity and by inclusion. Diversity is looking at the demographics of a workforce, whereas inclusion is looking at the behaviours and actions of these employees. Effective leaders need to be able to recognise this difference and be able to measure it.

Employers are currently measuring D&I amongst their workforce with engagement surveys being the most commonly used method to gather this data. The main factors that are being measured are currently gender split, age, disability and how ethnically diverse the lower levels of the company are. However a problem that is faced is that there is no consistency globally in terms of measurement. Due to different legalities in different countries employees can find themselves restricted in what they can measure depending on where the workforce is based.

There is especially a lack of measurement throughout the recruitment process. Recruiters tend to have good intentions but a formal measurement process is needed. Senior management need to set diversity goals with a timescale in place and theses goals need to be measured and met. However it needs to be considered that there are only so many questions that can be asked at the recruitment stage. It seems there needs to be more training on diversity and inclusion. However it is important to measure the effectiveness of this training to see if the number of attendees on a course leads to success.

  • Unconscious bias Training

One of the types of training, that is highly recommended to be rolled out as mandatory for recruiters and managers, is unconscious bias training. Unconscious bias is identified as a real problem within middle management. It is advised that this training is offered to anyone but mandatory to exec level employees. Attendance should be measured in order to then use these findings to see what impact this training has had on things such as gender split of people being promoted. This area is seen as subjective but it is hoped that this training can make an impact through awareness.

Measuring ROI

A clear finding from this Think Tank was that companies do tend to measure diversity and inclusion in terms of how diverse their workforce is but not how this impacts the business.  From a business’s perspective it is important to measure to what extent a diverse work team can impact innovation, increase speed / proficiency, improve client experience and financial performance.

It is reported that for every 1% change in diversity there is a 3% increase in financial improvement. But why is this? It could be that limiting your employee population can limit your market place; your employee population needs to mirror and represent current and potential customers. Customers are now taking more of an interest in businesses including the diversity of their workforce. More business is now done in the public eye and documented across media which leads to more scrutiny. Having a diverse workforce could win new business, build relationships and generate commercial opportunities. Educating clients on your work or awards around D&I is beneficial to let them see a diversely representative business. It is important to measure the customers’ perspective of the business and its D&I policies. This could be done by looking at social media, glassdoor.co.uk or gaining customer feedback and analysing it.

Challenges

The current challenges faced by businesses are that corporates don’t seem to be pushing some of the responsibility back down the supply chain, for example to recruitment agencies. There also seems to be a problem in implementing diversity at the workforce planning stage and gaining a diverse range of employees amongst senior level employees. Issues also lie in making a company accessible to a diverse workforce and creating an environment that people feel comfortable to disclose their disability.

  • D&I as Part of the Business Strategy

It is essential that the whole business is supportive and aware of the role D&I plays in business strategy and the role that they play to implement it. This should start by educating the HR team who should be given diversity goals and communication on how this contributes to the business and what role they play in this. This should be replicated throughout the business, understanding the relevance from all aspects and showing them how D&I impacts their role before starting a communication plan. It is the responsibility of the whole business, not just the D&I team to ensure a diversely representative and inclusive workforce.

  • Encouraging a more Diverse Workforce through Flexible Working

Currently flexible working can be seen as a ‘working mothers arrangement’ but it is a policy that is beneficial for helping to build and promote a diverse workforce. Having a flexible working scheme can open the business up to higher numbers of potential employees  which can increase the talent pool available. Other benefits include making the most of people’s potential by allowing them to share workload or work in an environment which increases output. Flexible working needs to be communicated throughout the business so that anyone feels they can apply for it and employees and clients understand why people are in the scheme and the benefits it can offer.

  • Encouraging Disclosure of a Disability

One in five adults have a disability which can range from physical to mental. 70% of these disabilities are hidden with 74% of job seekers not wishing to disclose a disability due to fear of discrimination. Companies need to create an environment where employees or potential employees feel comfortable to disclose a disability. This has been proven to be beneficial to the business by reducing sick days and creating a supportive team environment, with people going through similar issues being able to help one another. Suggestions for creating this type of environment are ensuring recruitment processes have a focus on gaining a diverse workforce and encouraging senior management with disabilities to discuss mental health, be open about their disabilities and be used as role models for the rest of the business. Focus groups and disability champions can also encourage discussion and openness of disabilities.

Oasis HR

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