Diversity boosts the bottom line. A McKinsey & Company report found that companies in the top 25 percent for racial and ethnic diversity are 35 percent more likely to have financial returns above their industry’s median. Companies in the top quartile for gender diversity are 15 percent more likely to have above-median financial returns.
Meanwhile, companies in the bottom quartile for diversity are the least likely to achieve above-average returns, says Vivian Hunt, a senior partner at McKinsey and managing partner for its UK and Ireland offices.
Diversity boosts innovation, too. A 2017 paper by researchers Roger C. Mayer, Richard S. Warr and Jing Zhao found that companies with strong diversity hiring programs announced two more new products each year, on average, than their less-diverse competitors.
While the benefits of workplace diversity are well-documented, the path to achieving diversity is less clear. Companies “understand the need to improve workforce diversity but struggle with how to prioritize their challenges and create a tangible, results-driven strategy,” says Kathy Clem, director of diversity recruitment at Allegis Global Solutions.
Tracking the right metrics is a must for companies that want to know how well their diversity efforts work.
Choosing the Right Metrics
As with any HR-related goal, determining your organization’s success at implementing diversity efforts requires choosing which metrics to track.
In a 2018 white paper from the Association of Talent Acquisition Professionals (ATAP), a committee led by consultant Nicole Dessain recommended using four criteria to assess various metrics:
- Does the metric have a clearly articulated purpose?
- Does the metric pass the SMART (specific, measurable, action-oriented, relevant, timely) test?
- Can the metric be treated as a standard for future benchmarking purposes?
- Can the metric be categorized as either functional (providing insights on operations) or individual (providing feedback for coaching and performance)?
These four factors provide context for determining which metrics need the most emphasis when it comes to understanding and improving your company’s diversity efforts.
When it comes to finding more diverse candidates, “you’re setting yourself up for failure if you’re merely working toward filling an equal employment opportunity quota,” Jori Ford writes at Fast Company. Instead, demographic data points should be incorporated into a hiring process that focuses on reaching specific goals for both diversity and inclusion.
Most applicant tracking systems today can gather demographic information about candidates. However, many of these systems are set up to store and share applications as a single set of information. When hiring managers can view demographic data, unconscious biases can affect screening and interview decisions.
Instead, companies can use these systems both to track essential diversity metrics and to reduce bias, says Daniel Bortz at the Society for Human Resources Management (SHRM).
For instance, collecting information about age, gender and racial or ethnic background, along with names, addresses, college names or graduation dates, can still be done in the system. However, the right software can also sequester this information, instead assigning each candidate a unique identifying number.
Without the demographic data, hiring managers and recruiters can focus on each applicant’s skills. The ID number can be used to track candidates throughout the process, and the candidate’s identifying information can be easily reunited with the application when it becomes time to evaluate diversity efforts. When the data is housed within the software, tasks like analysis and pattern identification can be given to the system, allowing recruiters to spend more time on evaluating experience and skills.
Holding leadership accountable for meeting specific goals in this area can help improve the diversity of the applicant pool, says Jeffery Lewis at Affirmity. For example, one global bank uses metrics to track factors like age, gender, and racial or ethnic background in its applicant pools and in promotions. To ensure a more diverse mix of professionals, the company holds leadership accountable for cultivating a more diverse applicant pool.
For many companies, changing the makeup of their applicant pool means changing where they search for new applicants. But many companies aren’t sure where to look, says Lori Sylvia, founder and CEO of Rally Recruitment Marketing.
Sylvia recommends attending conferences and events intended to connect more diverse applicants with hiring companies, and to track specific metrics related to the event. For instance, tracking the number of contacts made, applications received, and applicants who reach each stage of your hiring and onboarding process can help you determine the event’s impact on your diversity and outreach efforts.
In addition, Sylvia recommends tracking the total cost to exhibit at every event, then breaking down the cost per lead, per applicant, per interview and so on. “Ensure that your reporting aligns with your recruiting funnel and/or hiring stages,” she writes. “It will be more meaningful to leadership than impressions or page views.”
Interviewing as Metric Collection
Interviews are typically seen as the point at which metrics take a backseat to relationship-building. While the human element is still vital to an interview, this stage shouldn’t be ignored as a site of essential metric collection.
For instance, tracking the demographic data of candidates who reach the interview stage is a must. Here, it’s also important to compare the diversity of the group of candidates offered an interview to the group that accepts, the group that attends and the group that is still in contention after interviews are completed.
Hiring Managers: What Workplace World Are You Building?
Diversity hiring without inclusion efforts can easily result in higher turnover when new hires don’t feel like they belong on the team, says Tim Sackett, president of HRU Technical Resources in Michigan.
In a study on diversity and inclusion, researchers Sylvia Ann Hewlett, Ripa Rashad and Laura Sherbin found the following about employees who perceive bias at work:
- 33 percent feel regularly alienated.
- 48 percent have looked for another job while on the clock during the last six months.
- 80 percent have declined to refer people in their professional networks to their employer.
This is why it’s so important to remember that a workplace is something you build over time. Diversity and inclusion aren’t things you can measure with KPIs and one day announce “Mission Accomplished.”
Amber Baldet, co-founder of Clovyr and former head of the blockchain team at JPMorgan Chase, drives this point home: “Inclusion happens when your recruiting process casts a wider net for qualified candidates. It happens when you give credit to people for their ideas and contributions. … Inclusion happens when people in power use that power to bring people in rather than keep people out.”
That’s why so many of the employees in the stats above felt alienated and were looking for new jobs. They felt kept out.
Certainly, it takes time to build a workplace and a company culture that ensures everyone feels included. However, the long-term benefits to doing so are tremendous. And for organizations that recognize they could be doing a better job with inclusion, candidate screening is great starting point.
Who Fills Which Roles?
In addition to examining the applicant pool as a whole, companies seeking to promote diversity can benefit from looking at specific roles within the company, as well as considering the culture on specific teams and throughout the organization as a whole.
Improving the mix of perspectives on your teams often means reaching beyond your usual sources for hiring on those teams. “For example, consider hiring someone who comes from a different industry, or who has slightly different skills,” says Angela Copeland, founder of Copeland Coaching. “Look for candidates beyond the universities you are the most familiar with. Review resumes from more than one job website.”
When companies know which candidates apply for specific roles and who is hired to fill them, recruiters and hiring managers can adapt their outreach efforts accordingly. They can also work to target staff in existing roles for further education or promotion, based on each staff member’s specific abilities and skills.
Performance and Evaluation Metrics
Tracking diversity metrics in promotion and leadership is essential for company success. In addition, ensuring that each position has a set of metrics for success can help ensure that unconscious bias doesn’t adversely affect diversity.
Here, tracking quality of hire alongside demographic points like age, gender, and racial or ethnic background can also help companies determine where and how their diversity efforts are having results. In addition, calculating both pre-hire and post-hire quality can help companies determine how their diversity efforts in hiring are meshing with their inclusion efforts on the job, says Roy Maurer at SHRM.
When quality of hire is tracked alongside diversity data, companies can determine exactly where and how their diversity and inclusion efforts are making an impact — and where work remains to be done.
Images by: Albert Yuralaits/©123RF.com, Narith Thongphasuk/©123RF.com, Edhar Yuralaits/©123RF.com