Good news: Leaders are thinking more about diversity, equity, and inclusion (DEI) and looking for ways to follow up verbal commitments with action. They understand that a diverse and inclusive workplace is good for businesses because it helps them attract and retain great employees and perform better financially. A McKinsey study linked diverse executive teams to 35% higher earnings and 33% more long-term value creation.
Bad news: Many leaders are overlooking important DEI metrics, aren’t tracking their DEI efforts effectively, and are missing the mark on recruiting and hiring processes. Too many leaders are making decisions about DEI programs based on faulty or incomplete data and are lacking actionable insights to help diversify their workforce. They’re missing out on the benefits of having a diverse, equitable, and inclusive company as a result.
The problem is that companies rely on EEO-1 data on the racial, ethnic, and gender makeup of their workforce that they report to the Equal Employment Opportunity Commission, and maybe a few other internal statistics, to determine where they are on DEI. That’s not sufficient because self-reported data can be inaccurate. You need to incorporate other relevant data that goes beyond employee demographic makeup to build an effective DEI strategy.
Not only that, but you also need modern recruiting and hiring practices to move the needle on DEI. If your company isn’t making the progress you’d like to see, you can change things up to get better results. Here are five ways to tune up your company’s DEI program.
Don’t ignore context
Industry context matters when creating DEI programs. Say a company has a workforce that is 50% women. For a sector like healthcare, that’s average, but it’s far above average for the tech industry, where women made up only 31% of employees at Fortune 500 tech firms in Q1 2021. To put their data in context, companies need basic demographic data for their industry, plus inclusion indicators.
Starting with accurate employee data at the company level is also crucial. Not all companies have data on employee diversity, and those that do often have inaccurate information since some workers don’t self-report the data for fear of discrimination. With access to big data analytics and public records from multiple sources, employers can create a more accurate account of their baseline on diversity and use that information to build DEI programs that close gaps.
Dig into the numbers
Hiring for diversity isn’t enough. It’s also critical to understand the many factors that impact diversity through retention, including churn risk, tenure, internal mobility, and participation in management roles. A company that hires 100 Black managers won’t make a lasting change if it fails to retain the 200 Black managers already on board, so using advanced analytics to accurately gauge churn risk is key.
Keeping an eye on tenure metrics and internal mobility can provide clues on whether employees are getting opportunities to move vertically or laterally within your company. Diverse employee participation in management roles can show that team members are finding meaning in their careers at your company—or whether they are at risk of moving to a competitor to move up.
Don’t be afraid of AI
To bolster their pool of qualified, diverse candidates, employers should take advantage of new recruiting technology. For example, research shows that qualified, diverse candidates typically rank lower in sourcing tools that rely on the top keywords for a position. That’s because those candidates often claim fewer skills than they possess and write less text describing their achievements on their online résumés.
AI can help companies address these roadblocks through functions that predict and fill in relevant skills and qualifiers that may be missing from diverse candidates’ profiles. Using AI, recruiters can also easily run variations of each search and identify how making small changes in keywords or job requirements could widen the talent pool. Employers can leverage these functions to continuously refine their recruiting approach and create a more diverse hiring pipeline.
Set transparent goals and share them with employees
To create accountability and demonstrate a serious commitment to DEI goals, it’s imperative to set transparent objectives and share them with employees. Industry benchmarks and rich data can help you find goals you’re comfortable with, and sharing objectives establishes accountability.
It’s also important to monitor your progress regularly so you can step up diversity efforts if you’re not on pace to achieve your goals. Remember, when you commit to transparency, employees and the public will be watching. Waiting until the end of the year to consolidate data and create a report doesn’t give you time to adjust along the way if needed.
Eliminate bias and bottlenecks
If your HR department isn’t already doing so, it should consider practices like removing photos and names from candidate résumés. That helps ensure diverse candidates aren’t eliminated due to conscious or unconscious biases. Study after study has demonstrated that this is a problem, including recent research which found that minority and female STEM majors needed a 4.0 GPA to be rated as highly as a white male candidate with a 3.75 GPA. Blind résumés are an easy fix.
It’s also a good idea to monitor the recruiting pipeline and identify where diverse candidates hit roadblocks. Does a review indicate that they are being disqualified for lacking a credential that they actually have? Maybe a good candidate was overlooked for describing themself as a “Project Leader” when you’ve only been searching for “Project Manager.” Using AI instead of manual keyword searches (as described in tip #3) can help, and a review of processes can reveal similar bottlenecks.
Data and advanced analytics have transformed the way companies do business, and with the right metrics and technology, you can make lasting, positive change on the diversity front, too. So, if you’re ready to put your corporate commitments to diversity into action, make sure you have accurate data (including industry context), and measure relevant KPIs that impact diversity and retention.
Build a strong and diverse recruiting pipeline and implement hiring practices that eliminate bias. Set transparent goals and monitor progress along the way, and don’t forget to celebrate your successes as you achieve DEI objectives. Creating a diverse, equitable, and inclusive workforce is good for business, and it’s the right thing to do. That’s worth celebrating.
Gal Almog is the cofounder and CEO at Talenya.