Given the renewed national focus on social justice issues and a growing expectation that organizations will work harder to prevent discrimination and remove artificial barriers to opportunities for all, now is an especially good time for you to build greater structure, discipline, and intentionality around your diversity, equity, and inclusion (DEI) efforts. When managed properly, diversity metrics can be an indispensable component of a meaningful, solutions-oriented DEI program. Read on to learn some of the advantages of establishing and maintaining a DEI program as well as tips on how to achieve measurable results without conflicting with the law.
What Is A Metrics- Or Data-Driven DEI Program?
Workplace DEI programs are voluntary corporate initiatives that go beyond compliance-oriented workplace nondiscrimination and equal employment opportunity (EEO) efforts by building an organizational commitment to ensuring individuals from broadly diverse racial, ethnic, gender, cultural, and other backgrounds are recruited, hired, retained, valued, and fully supported at work. As the name suggests, DEI describes three critical components:
- Attracting, recruiting, and hiring a diverse workforce (“diversity”);
- Ensuring nondiscrimination and EEO (“equity”); and
- Building a respectful, supportive, and inclusive environment that allows all employees, regardless of demographic background but especially those from marginalized or underrepresented groups, to thrive at work (“inclusion”).
A metrics- or data-driven DEI program uses both qualitative and quantitative data and measures to set, advance, and evaluate an organization’s DEI outcome goals. Metrics-based programs can be very effective in both promoting action and holding organizations accountable for achieving positive results by, for instance, linking individual or organizational performance and/or compensation determinations to the attainment of the goals.
How Is Formal Affirmative Action Program Different?
Many organizations doing business with the federal government are legally required to develop comprehensive, formal affirmative action programs designed to help ensure nondiscrimination and EEO for women, minorities, individuals with disabilities, and protected veterans. Covered federal government contractors are required each year to:
- Develop and implement written affirmative action plans (AAPs);
- Review and analyze compensation and employment transactions data for indicators of potential discrimination; and
- Evaluate their organization’s positive outreach and other good-faith efforts to promote and advance EEO and nondiscrimination.
A data-driven DEI program may incorporate certain elements of a formal affirmative action program but typically is broader in scope and, most important, is a voluntary form of affirmative action, which as described below has important practical and legal implications.
What’s the Value Of Investing In Data-Driven DEI Program?
Diversity metrics can provide a “snapshot” of an organization’s overall demographic makeup as well as areas in which particular challenges and opportunities may exist. At bottom, and among other things, they can help to drive success by identifying program gaps and successes and providing a basis for action and accountability.
DEI metrics operate best when they are based on and consistent with a broader business strategy, which often focuses on not only workplace demographics and culture but also the supply chain and other dimensions of diversity. In the employment context, well-designed metrics that align with the corporate business strategy can boost DEI efforts at every stage of the talent life cycle (from outreach and recruitment to hiring, retention, and advancement).
Potential Risks from Implementing Data-Driven DEI Program
Unintended discrimination. Because DEI programs are almost entirely company-driven initiatives, their structure, content, and efficacy can vary significantly from organization to organization, even with respect to how broadly the term “diversity” is defined. That said, although most employers generally aren’t required to maintain DEI programs, they’re obligated to ensure the programs are lawful and reinforce, rather than undermine, EEO and nondiscrimination.
Diversity metrics can take different forms. For example, an organization might track and analyze the number of job applicants for technical jobs by demographic group, then set a goal to increase targeted outreach and recruitment efforts based on the results. It’s generally unlawful, however, to make employment selection decisions based on protected traits such as race or sex in the absence of a valid AAP.
For example, suppose the employer in the above example (after reviewing the hiring data) sets a DEI goal of increasing the representation of Asians by 25%, and hiring managers made race-based selections to achieve that goal. In that instance, the employer would run afoul of federal EEO law (specifically, Title VII of the Civil Rights Act of 1964) unless it meets the legal criteria for practicing voluntary affirmative action.
Under long-standing U.S. Supreme Court principles, a DEI program that sets hiring goals for a particular protected group, for example, must be remedial in nature and narrowly tailored in how it achieves the objectives. A best practice is to establish goals based on an observable underrepresentation of certain groups available in the relevant labor market.
Thus, although EEO and nondiscrimination are foundational elements of any meaningful corporate diversity initiative, sometimes well-meaning organizations can place their programs at risk by establishing overzealous goals, timetables, and/or other mandates calling for “more” of one group or “fewer” of another group that are unrelated to actual representation and availability data.
Missed opportunities. Implementing a data-driven approach is likely to raise expectations among staff, investors, and others that the organization actually will review the results and take appropriate action to address issues possibly impeding its DEI efforts. Failure to do so can leave the mistaken impression the organization’s DEI program is merely a “paperwork exercise” or public relations gimmick.
That sentiment, in turn, can lead to many of the very issues such a program is intended to avoid: dissatisfaction, mistrust, avoidable staff turnover, and so on. Failure to act on culture issues that may come to light as a result of a DEI analysis also can come back to haunt the organization in subsequent litigation.
Tips for Building Robust, Defensible Metrics-Driven Program
Align DEI efforts with business objectives. As noted above, even the most well-intentioned DEI initiatives can pose compliance challenges if not properly aligned with a thoughtful and evidence-based business plan. How do your DEI objectives support the organization’s mission, vision, and values?
One obvious practical benefit of business-aligned DEI efforts to build an organizational culture of support and respect for individuals of different backgrounds, cultures, and experiences is that it invariably translates to happier, more engaged, efficient, and motivated employees, which ultimately will contribute to the bottom line.
Identify any specific concerns that may define scope. How do you define “diversity”? What are the desired outcomes? What are the main indicators of success?
Collect and review baseline information. Look at workforce demographic data, previous or existing DEI plans, your employment policies and procedures, industry best practices, and so on.
Determine what data and information should be analyzed. For example, if Asian employee retention is a particular concern, would it be helpful to analyze promotions data and/or look at internal complaint activity for clues to potential problems? What helpful information may be gleaned from employee engagement survey results? Exit interviews?
Collect, review, and analyze data. What are your benchmarks? There’s a variety of possible sources of information for analysis beyond just data on employment transactions (applicants, hires, promotions, and terminations).
Whenever embarking on quantitative workplace data analyses, you should consider what steps to take to preserve data confidentiality and prevent unwanted disclosure of the information and/or study methodology and results. To the extent possible and appropriate, the review and analysis of the DEI data should be conducted by, or at the direction of, legal counsel.
Devise plan for correcting issues discovered along the way. You may run across statistical indicators of possible discrimination, possible patterns of harassing or retaliatory behavior, or gaps in training and development programs.
Set appropriate goals. Use the results of the data analysis to help set outcome goals and accountability measures consistent with the organization’s standard practices. There are myriad ways in which organizations evaluate performance (of a particular line of business, research initiative, or employees). Metrics-driven DEI goals and benchmarks can and should operate in similar ways.
Note About Compliance Training
Because all DEI programs must operate within the parameters of the laws, you must ensure all employees, particularly any personnel tasked with supporting and implementing corporate DEI initiatives, are regularly trained on applicable EEO and nondiscrimination legal principles and expectations. Doing so will help to minimize legal risk and also drive the success of the organization’s DEI programs.