What can employers do to start making progress toward diversity goals? 

Corporate leaders remain highly engaged in conversations about diversity -- what diversity means for different companies, what strong programs look like, and how diversity goals fit into larger people and business strategies. Over the past few years, the business case for diversity has broadened. Research conducted by Mercer and others has shown a clear and consistent relationship between a company's level of diversity and its overall performance, which has changed the framing of the diversity conversation significantly. These days, we aren't only embracing diversity because it's the right thing to do, but also because it makes good business sense.

Companies also face growing pressure from different sources to get serious about diversity. Social movements, amplified on social media and intensified in recent years, have compelled employers to consider issues that might not have surfaced otherwise. More consumers are talking openly about making purchasing decisions based on their values and beliefs, pushing companies to take a public stance on various social issues. As ESG disclosures influence more investment decisions, major shareholders are asking more questions about companies’ performance in areas not captured on their financial statements, and diversity is seen as a major component of the “S” in ESG. And finally, especially in markets where the talent wars are still intense, diversity practices may be a deciding factor for employees choosing where to work.

While there has been some progress, our research shows persistent gaps in satisfaction, turnover rates, compensation, and even mental health between different populations. For example, a Mercer survey of more than 4,000 US workers found that 41% of non-white employees are looking to leave their employers compared to only 33% of white employees. Fewer women than men believe they're fairly compensated or feel their career goals can be met at their current company, and mental health shows up as the number-two concern for LGBTQ+ employees, but number-five for employees overall. There clearly is room for improvement across the board.

It can be helpful to set some rules of the road to help build support for your program and guide your way. First, make your program data driven. Companies have access to more HR data than ever before, which means you can use your own data, not external benchmarks, to identify challenges, build a personal business case for diversity, and track progress with objective data-driven KPIs and metrics.

Second, think expansively about diversity. Certainly, diversity programs should consider groups that are disadvantaged based on gender, race/ethnicity and sexual orientation. But there are other ways that employees differ from each other that might be particularly relevant to a given organization at a specific point in time. For example, coming out of the pandemic, many employers have a new focus on caregivers and how policies and practices might land differently for employees with significant caregiving responsibility. Similarly, as companies shift into new ways of working post-pandemic, they are looking at whether their employees with remote or hybrid working arrangements have different career outcomes than those who work in the office five days a week.

Finally, while diversity programs may focus on the ways we differ from each other, their ultimate goal is to benefit all employees – ensuring everyone has the same opportunities and the same sense of belonging. Think of your diversity program as a giant umbrella over all the people in your organization.

With these rules of the road, you can go in many directions, but here are few ideas for initial projects that are likely to pay off for most organizations.

Look at turnover. Most companies already watch this metric pretty closely, and it’s important to see whether turnover is higher in certain groups. But there may be more to uncover. Over the past few years, when we’ve assisted employers with turnover data mining and rigorous predictive modeling, we’ve found that a major predictor of whether someone will leave an organization has become how they feel about their employer's progress on diversity. If that’s true for your organization as well, you’ve made an even stronger case that managing diversity is part of managing turnover.

Study the employee experience across the diversity dimensions that are most relevant for your organization to see if there are meaningful differences – there shouldn’t be. How do people get hired and enter your organization? How do they move through your organization over the course of their career? And how do they exit your organization? Focused investigations in these areas can help target actions that make a real difference quickly.

Seek out areas in which equity can be measured objectively -- and where you consider inequity to be unacceptable -- and lean into them. For example, pay transparency has become more common and more expected, and regulations regarding fair pay are popping up around the world. This makes it more important than ever that your pay practices can stand up to scrutiny. Are the right factors being considered in determining pay? Do compensation practices reflect your compensation philosophy? Is there a chance that bias colors pay decisions? Career equity must be considered as well because the ability to earn higher pay is linked to promotions and top performance ratings. Sometimes pay differences are actually the result of harder-to-see differences in how people are treated that may be deeply rooted and stretch the length of a person's career.

If you’re an employer just starting on a diversity journey, you may struggle with what to do first. A goal that’s too broad -- like “becoming good at diversity” -- can be paralyzing. But bite-sized projects like these can deliver quick wins and create a feeling of progress -- help build momentum for further action.