Why data is crucial to show return on D&I investment
By Jo Faragher on 10 May 2023
As D&I functions grow in maturity, so do the expectations of senior executives that it can demonstrate the business case for the investments and initiatives it sponsors. D&I professionals are becoming ever more adept at using data to show the impact of their work, or to identify where gaps are in the business that may need addressing. But there is still some way to go on this; last year consultancy Radley Yeldar found that while four-fifths of HR decision-makers believe their organisation is clear on D&I progress, only just over half report on their strategy. Almost a quarter wanted D&I progress reported more widely.
One thing most D&I teams will recognise, however, is how challenging it can be to get the full picture in terms of data. According to Mary White, senior manager, people science at Inclusio, many organisations struggle to get employee diversity data in the first place because staff are worried about how it will be used. “Yet employees still want their voices heard, so we need to help organisations collect it so they can address any gaps, but also ensure that employees have that voice,” she explains. Inclusio operates a platform where employees can submit their own diversity data on an anonymous basis, coupled with gamified learning where they can understand more about the lived experience of others. “We create a safe space for employees to disclose, and have engagement rates of more than 70%,” she adds. “Organisations see a rise in data disclosure so they get a better picture.”
A rise in mandatory reporting in a number of countries – such as the gender pay gap reporting regulations in the UK – has increased visibility of the importance of D&I data at the highest levels in business, as CEOs and other executives see the value in these insights for making decisions. “They see a return on investment because most consumers adapt their behaviour dependent on a company’s values, while 60% of internal stakeholders are keen to see CEOs publicly state their positions on key issues. It works both ways,” White explains. Inclusio pushes out daily ‘nudges’ to users to engage with small pieces of inclusion-related learning as well as sharing their data. “This drives behavioural change rather than making it a box-ticking exercise,” she adds.
Gamiel Yafai, founder and CEO of Diversity Marketplace, argues that data can help to accelerate progress where it feels to be stalling. After the heightened activity in 2020 during the pandemic and in reaction to the murder of George Floyd, many organisations are less enthusiastic about a major D&I push but happy to sign off small initiatives here and there, which have less impact. “One of the problems is that many do brilliant work and don’t shout about it, or when it comes to proving a business case D&I teams do some quick research and present a ‘list’ to the board without full consultation,” he says. While external research and data has value, working with employee resource groups and the people you’re hoping to support gives a fuller picture. He adds: “You can combine a culture survey with data collection, for example, or gather case studies explaining why data is important and how it will be used. The big thing here is trust.”
Yafai says that getting more people involved in the ‘why’ of data collection, such as talking about their experiences or a chief executive making a video to explain why data supports inclusion, can help increase disclosure rates significantly. “One company I worked with saw rates above 90% after a CEO video and cascading that discussion to every line manager in the business, as well as networks, D&I committees and executive sponsors,” he adds. Following up on that data collection and insight is crucial, too. “If there’s an issue, perhaps run a focus group rather than just leaving it. If you don’t do anything, you’re leaving room for potential discrimination,” he says.
Targeting your efforts
“Enthusiasm for DEI is always welcome. But sometimes this enthusiasm can lead to a scattergun approach which attempts to address many areas but fails to get to the core of specific issues impacting the business,” points out Toby Mildon, founder of D&I consultancy Mildon. “Put simply, data helps organisations identify these core issues – for example, which groups in an organisation are feeling particularly excluded. This enables business leaders to take targeted action, focusing resources and budget in the right areas and leading to a much better return on investment. Without data in the form of employee insights, it’s difficult to set a clear DEI strategy.” Mildon adds that without data, progress cannot be tracked, so it becomes difficult to show how D&I teams or programmes are having an impact. “There’s a lot of frustration amongst businesses that they’re not “shifting the dial”. Data helps track trends and patterns to provide evidence that the business is making a difference,” he adds.
“All too often, leaders create cultural strategies which miss the mark,” echoes Victoria Lewis, CEO of workplace dynamics consultancy Byrne Dean. “They are well intentioned but fail to engage their people because the transformational strategies do not feel relevant – they are then pretty impossible to execute successfully.” Organisations can only really understand their culture by looking at behaviours and experiences that are happening ‘on the ground’, she believes. “That means you need to ask your people – what do they see and what do they hear? Your people will tell you – a far more robust process than subjective and bias fuelled gut feel and anecdotal evidence. The tricky part is creating a platform where your people will feel safe to tell you.” If analysed effectively, data will help surface those solutions that will close any gaps, such as development opportunities for specific cohorts, career pipeline issues, an urgency for transparency across a team, or the need for managers to role model inclusive leadership and challenge inappropriate behaviour.
Return on effort
But is data the be-all and end-all for D&I, when so much of our sense of belonging at work can be subjective. Mildon argues that organisations need to overcome this idea that inclusion is too nebulous to be measured. “ROI should definitely be a focus,” he says. “DEI cannot simply be regarded as a ‘nice to have’. Rather, it is an integral part of the culture of the business, intrinsically linked to the bottom-line and ‘inclusive growth’. So, measurement is a must. If you’re a business leader, you want to know that you’re making a difference and shifting the culture of the organisation for the better. You need data to prove that the needle is moving in the right direction and to show that investment in people’s time and resources is working.
The key, he adds, is to translate this information back to the business strategy so you can demonstrate value to stakeholders. “It’s also worth mentioning the distinction between ROI and ROE – return on effort. For some people, DEI is simply the right thing to do regardless of any business case or ROI. So, ROE is about getting the balance right, evaluating whether the business is putting in a bit of effort for great return or major effort for hardly anything back,” he concludes.
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