Here's how to calculate the return-on-investment on your D&I initiatives.
Companies measure and track factors considered important to achieving strategic goals. However, diversity and inclusion (D&I)—while often touted as critical to attracting, retaining, and developing the best talent in the workplace and capturing customers in the marketplace—rarely is measured.
Although there are several reasons for this gap in D&I measurement (such as not being sure of what to measure, concerns about legal exposure, sensitivity about making D&I a compliance-based "numbers" issue), measuring your effectiveness in this area is essential to determine if you are hitting intended objectives and to assess where calibrations should be made going forward.
Although a D&I measurement approach will be driven by an organization's strategic objectives, here are some ideas for establishing meaningful metrics.
Track D&I as part of employee engagement or organizational health surveys. Be sure to obtain demographic data so that you can compare and contrast the degree to which your organization is creating an inclusive environment.
Conduct return-on-investment on a key D&I initiative. Determine the financial and business results of a major organizational program.
Assess year-over-year progress of adding more diverse senior leaders. Although some organizations track the diversity of their pipeline of candidates, measuring the composition of executives and board members is more reflective of changing demographics in a global world.
Examine turnover rates from a D&I perspective. Are you seeing greater turnover in certain diverse populations, such as women, veterans, or lesbian, gay, bisexual, and transgender employees? If so, this is a good indicator that the environment may need to become more inclusive.
D&I metrics must be multipronged. Obtain input from several internal and external stakeholders to determine what will be most meaningful. Ensure there is buy-in from leadership for the metrics and a commitment to taking appropriate action. Although measuring D&I effectiveness is not simple, it is essential to demonstrate and sustain strategic impact.