How to Measure Diversity, Equity, and Inclusion

For a long time, diversity, equity, and inclusion (DEI) were considered a nice to have—not a need to have—when it came to workplace programs. Now, however, a quality DEI program is recognized by many as the backbone of a high-performing workplace. 

That’s because racially and ethnically diverse companies have a 36% higher likelihood of financially outperforming less diverse companies, enjoying 2.5 times higher cash flow per employee. Plus, organizations with gender-diverse executive teams are 21% more likely to outperform on profitability. 

Many are concerned that employers will slip back into old patterns with DEI investments should a recession hit. After all, 11% of employers surveyed in Monster’s January 2023 Future of Work report openly admitted that DEI programs “are among the first to go when they are forced to cut costs,” second to company events and bonuses.

But, a diverse workplace could carry a company through difficult financial periods, because inclusive workplaces have been proven to make businesses more resilient. 

Not only do diversity, equity, and inclusion boost innovation—helping companies find solutions during hard times, but a recent survey found that during the Great Recession of 2007 to 2009, companies with inclusive workplaces (as rated by historically disadvantaged groups) outperformed companies where employees lacked inclusivity by nearly four times. 

Why Measuring Matters  

To ensure that diversity, equity, and inclusion remain a top priority through uncertain financial times, you need to get buy-in from the C-suite. 

Like with any company program—from employee benefits to learning and development—CEOs, CFOs, and other stakeholders will need proof that the company’s DEI initiatives are working, and evidence that its investments can help a business thrive through crisis, in order to continue investing in it when money (and time) is tight. 

The best way to show the value of your DEI program, and to continue to get buy-in from key decision-makers? Data. 

To drive effective change through DEI in any context, HR professionals should always measure, analyze, and report on key DEI metrics to identify improvement areas and foster continuous engagement. This practice, however, becomes especially important during times of change when executives are forced to reevaluate their priorities. 

Data can help you tell a story about how DEI programs are performing, and how they can continue to drive value in the future, in a way that’s easy for stakeholders to digest––and easy for them to take action on. 

What to Measure 

But, what exactly should you measure when it comes to DEI? Which metrics best tell the story of a successful DEI program? What numbers can HR professionals use to get key stakeholders on board? Below are six key DEI metrics to measure that pack the biggest punch. 

Demographic Retention Trends

Due to the mass exodus of employees from the workforce during the pandemic and the ensuing labor shortage (that still persists today), employers are already hyper-focused on internal retention trends. 

As such, it’s likely that you’re already collecting data around retention and turnover at your organization, so digging a little deeper into those numbers should be an easy fix. 

Disaggregate your data to see how retention rates affect different populations. This exercise can help you find areas where you’re succeeding by identifying diverse populations within your workforce that you’re truly serving. That articulated, parsed-out data will ultimately help you tell a better story about how you’re creating the conditions necessary for diverse employees to thrive. 

Diverse Employees Across the Organization 

While many companies focus on pipeline programs aimed to increase the number of applicants from underrepresented groups, pipeline diversity as a DEI metric is not enough. What’s more important is the percentage of underrepresented candidates hired and how many stick around. Be sure to dig into hiring and tenure data if it helps you make your DEI case. 

Percentage of Diverse Employees in Leadership Positions

Measuring diversity across the organization is a start, but those numbers don’t account for everything. While your overall workforce might be diverse, it’s critical to have diverse representation at all levels of the organization in order to really champion DEI. 

If all of your employees from underrepresented groups are in entry-level roles, you’re not getting it right, but if you have diverse representation from the top down, that’s something to discuss. Plus, it’s an easy way to tie DEI in with broader business goals since companies with diverse leadership teams tend to be more profitable and perform better when it comes to retention. 

Number of Incident Reports 

Take a look at industry averages for incident reports and compare them to your own numbers. If your organization has lower-than-average reports of racism (and other -isms), microaggressions, hate speech, bullying, and the like, then be sure to use it in your DEI data storytelling. 

Or, if the number of reports has declined each year as you’ve ramped up your company-wide DEI training, be sure to bring that into your analysis, as well. Incident reports shed light on how well your DEI strategies are performing, including qualitative data around how comfortable diverse employees feel bringing up concerns. 

Employee Experience 

Booz Allen Hamilton voted one of the top companies for diversity in 2023, surveys its employees regularly to gauge the employee experience. 

Surveys provide valuable qualitative data about how diverse employees really feel in their roles and at the company. Positive anecdotes from underrepresented employees are a great way to back up quantitative data and can go a long way in convincing key leaders to continue to invest in DEI. 

Promotion Rates by Demographic 

Recent research from McKinsey shows that women are still experiencing slower promotion rates than men, and a study out of Harvard finds that Asian Americans are the least likely group in the U.S. to be promoted to management. A truly successful DEI program will produce better-than-average meritocracy, where promotion rates are balanced across different demographic groups. If you have a hunch that your promotion program is fairly equitable, then this is a metric you want to include when collecting DEI data. 

For more insights into measuring diversity, equity, and inclusion at your organization—and more ideas on getting buy-in for DEI—tune in for another episode of America Back to Work: Expert Interview Series. 

We’re sitting down with Priscilla Guasso, founder of Latinas Rising Up In HR, a community of purpose-driven women elevating each other in the human resources discipline. Guasso is also a practicing HR leader with deep experience in all HR functions across talent management, development, diversity, and management.

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