Just a few short years ago diversity, equity and inclusion (DEI) programs were HR initiatives that received attention only as time and budgets allowed. Fast forward to today, when boards are championing DEI, CEOs are talking about it to their employees, and your customers and the communities you operate in want to know what are you doing to address DEI.
Some may wonder whether this intense focus on DEI is going to fade. We believe employers have both an obligation and a pressing business need to promote DEI -- it's simply not optional for organizations that want to remain relevant and thrive. There's an expectation by shareholders, employees and customers that companies will commit to the DEI journey and make tangible progress, sooner rather than later.
There are many ways to navigate this journey, but even organizations with the best intentions can struggle to deliver on DEI goals and meet stakeholder expectations. Here are some learnings from employers that are making good progress and starting to reap the rewards of a more diverse talent pool and a more engaged workforce:
- Embrace disclosure and transparency. Both internal and external stakeholders want to know where your organization is today with DEI and expect to see evidence of progress over time. Detailed DEI data and perhaps even pay equity disclosures will soon become the norm. It's not a matter of if companies are going to share this data publicly; it's a matter of when, so now is the time to prepare for it.
- Seek out structural bias. Adverse or unexpected talent outcomes are hindering progress in DEI. These outcomes can’t be corrected with something like unconscious bias training. Leading organizations are starting to take a close look at the structural bias that is inherent in many foundational HR programs, policies and processes.
- Consider executive rewards. Leaders are increasingly being held accountable for DEI through the use of executive rewards, usually short-term incentives. Our data shows that less than 20% of US organizations currently link long-term incentive plans to DEI goals – but the trend is moving upward.
- Commit to health and financial equity. There's a strong focus on closing health and financial wellness gaps for diverse populations that face unique challenges. Employers have an opportunity to make a difference for employees and for their families by recognizing and addressing issues that society more broadly has not been able to address.
For employers wondering where to start, we always advise that the first step is to gather evidence of where there are gaps or disparities in career growth, experience, culture, inclusion, belonging and pay. Your data will illuminate where your DEI strategies should be focused and have the greatest impact.
From a tactical perspective, closing gaps and disparities in pay is non-negotiable. From 2014 to 2020, the area of greatest progress seen in our global gender equity research was in the implementation of pay equity strategies – now seen in about two-thirds of responding organizations in the US. Pay equity is an incredibly powerful tool to retain diverse talent, but career development and advancement strategies are equally critical. Employer efforts to hire diverse talent are too often offset by barriers to promotion. If those barriers aren't removed, the revolving door will turn and progress won't be made.
Beyond career development, advancement and pay, benefits are an important aspect of employers’ DEI strategies. The benefits you offer can demonstrate how much your organization cares about the well-being of the full workforce – but you need to know what your employees need and value. It is essential to offer a mix of resources and solutions as one size does not fit all.
Going deeper with persona analyses
While broad surveys and studies can be informative, employers will have to dig deeper to truly understand what employees value, and “persona” analysis is a way to gain often startling insights into an employee population. A persona analysis uses demographics data – age, income and zip code – sorted by differentiating variables like race and gender to see if some groups are disadvantaged relative to others. For example, one employer found that black colleagues were more likely to take 401(k) hardship withdrawals, loans and Cares Act withdrawals. This data helped the employer focus on benefit offerings and designs that could help these employees meet their financial burdens.
In addition, through a persona analysis an employer can learn about what’s important to different employee groups by asking very specific questions about benefit enrollment and usage. This can be of significant help in designing a benefits plan that will be impactful for all employees. The results may support using tactics such as automatic enrollment or adding new or more robust benefits. Some persona analyses have pointed to the need for more targeted education and communication.
Whether you’re starting your DEI journey by reviewing your corporate strategy and addressing bias in foundational HR programs, policies and process or you’re further along in the journey, remember it is a continuous process of evolution and transformation. The programs you put in place today will need continuous review and modifications to ensure you keep making progress toward your organization’s DEI goals.
You can learn more about these DEI strategies by viewing our webcast Employing Advanced Strategies for Diversity, Equity and Inclusion Programs.