The Importance of Having Diversity Metrics

In the past few articles we have shared various elements of Diversity , as well as the importance of Diversity audits. While our country does not make diversity a legal compliance area, in order to be perceived as a global organization that believes in equal opportunities, organizations must proactively have metrics in place related to the composition of their workforce. This kind of periodic monitoring assists organizations in ensuring that close any glaring gaps which are leading to some kind of diversity imbalance at a particular location or business unit or management level. These metrics should also cover the Board, since the diversity at the Board levels is fast becoming a highly critical issue.

While on one hand tracking diversity metrics is important , comparing it against the diversity goals is also essential to track progress. Further to that, using the metrics, to come up with an action plan with clear timelines and goals, ensures that the organization has a committed approach to creating a diverse workforce.

Here are some important metrics that need to be defined as the starting point. The company can add to this list or apply those which are relevant. It also helps in identifying which decisions might need to be revisited and probably revised. Metrics enable the creation of an agile and flexible Diversity policy.

Some elements to bear in mind when defining the metrics are as follows:

• Demographic profiles of the workforce should be collected when the diversity programs are launched. This helps to ensure that one is aware of the situation prior to the programs. This should cover gender, ethnicity/religion, language spoken, age, marital status, education and so on.
• The information should be collected for employees from all departments, levels (board, top management, mid management , junior management and even contractual workers).
• Additional information such as the employees utilizing the flexible work arrangements, their network groups, overall attrition rates, various benefits choices and performance ratings should be maintained as well.
• Inclusion of quantitative and qualitative data is important to have an overall picture, while the latter is more difficult to track in terms of measures.
• One of the approaches that can be viable in order to track diversity metrics is the Balanced Scorecard one. You can evaluate its feasibility for your firm and if creating a Diversity Scorecard using this approach works well.
• The metrics should be tracked periodically and the analysis should be carried out on a year on year basis, to get a clear idea of how the organization has progressed.
• The aim should be to have metrics across all HR sub functions or processes in the overall framework. For example, while most organizations tend to focus on recruitment efforts related to inclusion of minority segments of the population, they do not have a clear approach on leadership development efforts related to ensuring that the leadership pool has a diverse set. Hence as many people touch points can be covered, should be included.
• Training the HR as well as line managers on the Diversity metrics, their objective, definitions and applications is absolutely mandatory to ensure uniform implementation as well as acceptance of the same.
• Collecting client feedback on the diversity metrics and approach of the firm is also a good idea, since it gives the firm an external viewpoint on its brand and hence allows for further improvement. Aspects such as new clients or new geographic markets added and serviced effectively due to a diverse workforce is a key metric to be tracked from a business standpoint.
• Business impact is what the metrics should definitely seek to capture as well. Hence designing business specific diversity metrics is a challenging but mission critical task for the HR team along with the line managers.
• When the organization’s overall employer brand becomes viewed as diversity focused, there is expected to be an automatic increase in the number of applications from more women, older workers, differently-abled individuals and so on. Hence these kind of indirect metrics also provide valuable data.
• If there has been a grievance redressal process in place in the past, assessing the number of complaints and the change in them, based on harassment of the minority segments in the workforce, is critical.

Apart from the above guidelines, a regular diversity survey is a business imperative to gauge employee feedback and sentiment related to the initiatives and how the organization is truly progressing.

The article was first published in Business Manager – HR Magazine’s February 2014 edition. Republished with Permission.