Why the Key to DEI Initiatives is Data
15 October 2020
Since June, there’s been a renewed urgency in corporate America to prioritize diversity, equity and inclusion (DE&I) initiatives. And recently, I had the opportunity to interview Dr. Solange Charas. She is the founder and CEO of HC Moneyball, a data scientist and HR compensation consultant on a mission to ensure equity doesn’t become just another buzzword in business.
Including the word "moneyball" in her company’s title is no accident. After Michael Lewis's best-selling book, moneyball became a metaphor for using KPIs in business—from budgeting and data analytics to productivity. But today, DE&I aren’t actually in the KPIs of most organizations. That’s even true for HR: According to a recent study, only 7% of businesses in the U.S. set representation hiring targets for gender and race, and these are only part of the DE&I story. Paraphrasing the father of modern management Peter Drucker, "if you don’t measure it, you can’t manage it."
Luckily, more companies are coming around to the need for DE&I measurement: Fifty-six companies and organizations recently joined the groundbreaking Gender and Diversity KPI Alliance (GDKA) to support the adoption and use of a set of key performance indicators (KPIs) to measure gender and diversity in their companies and organizations. It’s a small step that indicates CEOs realize genuine diversity and inclusion will require more than meeting EEO guidelines and checking off boxes.
Matching DEI Commitments to Real KPIs
According to Dr. Charas, to truly create the fairness that equity implies, companies first need to locate and measure their current inequities. These KPIs can be used to locate and address pay inequities, for example. In 2009, the Lilly Ledbetter Fair Pay Act attempted to close gender pay gaps, But in 2019, ten years after its enactment, women in America were still paid only 81 cents for every dollar made by men. For women of color, it’s only 75 cents.
But pay inequity is just the tip of the iceberg. By studying the impact of common metrics—both financial (productivity, ROI) and operating (attrition, retention, diversity, training effectiveness), Charas has quantified the efficiency impact of these metrics on bottom-line performance.
Her analysis revealed inefficiencies and inequalities in areas beyond pay. If we’re going to finally "fix" equity and lead fairly, then we need to start quantifying and evaluating the efficiency of equity in our organizations in other areas—like the following.
Recruitment and Attrition Equity
It’s well documented that interviews are not only inherently biased but inaccurate at predicting job success. And yet, they are often the only assessment tool used to hire new employees. How can you be sure all your candidates were screened and selected fairly if you’re not measuring it? Ensuring that 13% of the candidates are Black and 18% are Hispanic or Latino won’t create equity. Instead, here are some questions to consider when formulating your recruitment metrics:
- Are your job offers presented equitably to all minority groups and what is the acceptance rate for these demographics?
- Does the distribution of candidates reflect the diversity of your community or region?
- Do candidates selected for interviews reflect the diversity of your community or region?
- Do the candidates that are extended a job offer reflect the diversity of your community or region?
- Are the candidates that accept job offers reflective of your community or region?
- Is this diversity reflected in all roles or is it skewed when comparing front-line to management?
Many organizations measure hiring equity because they are required to do so, but what about workers who leave? Do people of color, ethnicity, and gender quit at the same rates as white workers? You also need to start monitoring employees who leave as diligently as you track those who enter.
Training and Mobility Equity
Companies have to be able to prove that all employees, no matter their ethnic or gender categories, are given equal opportunities. Develop training methods that consider the following questions:
- Can you verify that each group participates and completes the training at the same rate? If no, why or why not?
- Are all genders, ethnicities, and races represented in leadership training and not just front-line training?
- What is your training dollar investment per each category? Is it distributed equally by gender and color?
And equally important is looking at what happens after after training:
- Are all ethnic and gender categories given the same opportunities for mobility and advancement?
- Are managers favoring younger or older workers?
Say your company finds that 10% of its Black employees were promoted over the last 5 years—the same rate as your white population. That’s great, but don’t stop here. Dig a little deeper: You might find white males got promoted within 12 to 24 months of training but Black males take 60 months or more. And missing from the data was the fact that women of color quit or were terminated before being offered any new opportunity. Don’t stop after discovering a single equity disparity; keep digging until you have unearthed the whole truth.
This one is my favorite. Think: step stool vs escalator. While men in feminized workplaces experience a ’glass escalator’ and are quickly promoted into supervisory positions, women in male-dominated positions tend to get a smaller boost—a glass step stool.
Ask yourself: Do each EEO, gender and ethnic category experience privilege, advancement and even attrition at the same pace? Equity isn’t just about whether or not you’re offering promotional opportunities or lateral opportunities or training opportunities. It’s whether or not you’re offering all races, genders and ethnic groups a step stool or an escalator.
DEI is Everyone’s Job
Equity can’t be explained away by rhetoric—it’s about the numbers. Whether or not you believe equity is framed and defined by ownership or diversity, it is quantifiable. By now, many of you might be thinking: quantifying equity takes a lot of time, money and resources. And that’s not my job or department. But let me make this perfectly clear: Fairness and justice is everyone’s job. It also doesn’t take a data scientist and AI to get started. It can be simple. Let me share the advice of Victor Assad, CEO of Victor Assad Strategic HR Consulting:
"Just start. The data is just sitting there. Most companies just need to look at it. You don’t need advanced technology or the skills of Bill Gates. All you need to do is start—collect the data and use a simple spreadsheet. The rest will follow."
Ignorance is not bliss: Quantifying equity must be top of mind in the C-Suite and HR.
Looking to support your company’s DE&I program with better tools, courses or technologies? Click here to explore Cornerstone Cares, an online library of free learning resources with courses on everything from managing remote teams to mitigating unconscious bias at work.