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4 Steps to Building a Business Case for D&I

Improving diversity and inclusion is top of mind for most organizations—87% of them, according to a PwC study. CEOs are on board, too, with Deloitte reporting that improving their organization’s impact on society was the top issue CEOs cared about in 2019.

However, how do you take the leap from knowing improvement is important to doing something about it? You need a strategy to bring to your leadership team that makes the intangible goal of improved diversity and inclusion both intangible and accessible. Although it can be overwhelming to start it is needed to succeed and people analytics can help—a lot!

Your organization is already sitting on a wealth of data, and people analytics can turn that data into actionable insights. Follow these four steps to build your D&I case and start changing your organization.

1. Establish existing costs

A diversity and inclusion plan entails an investment—of time, of resources, and of attention that could be spent elsewhere in the organization. Don’t forget sitting still has costs too. To win buy-in from leadership, start by laying out what a lack of diversity and inclusion is already costing your organization today. 

We all know that our people are one of our most valuable assets, and an absence of diversity and inclusion puts that resource at risk. High-performing employees might decide to leave the organization out of frustration with the lack of inclusion, and recruiting new employees will be more difficult. Your organization could miss out on outstanding candidates if they look around and decide that they won’t be successful or feel included. 

In addition, your organization could also lose out on customers or investors, as more and more companies are requiring diversity benchmarks to be met before they work with or invest in a business. In 2020, investment bank Goldman Sachs announced that it would no longer take companies public if they did not have at least one non-white, non-male board member. The message is clear: a lack of diversity and inclusion is both a limitation and a liability. 

2. Underline potential benefits

Diverse companies have been shown to be more profitable, more innovative, and better at decision-making. McKinsey states that companies with higher gender diversity are 21% more likely to have higher profitability, while companies that are ethnically diverse are 35% more likely to have better financial returns. 

Not only will creating a more diverse and inclusive organization increase your recruiting pool, it can help you recruit more competitively. Nearly half of millennials prioritize diverse companies when job searching, according to a survey conducted by the Institute for Public Relations. Creating a deliberate diversity and inclusion plan now can reduce duplicate efforts later and actually save money. If your organization works to recruit women and minorities now but fails to develop a plan to retain them, your organization won’t benefit from those efforts and will need to repeat them.

Improving results, hiring faster, and saving money? These are the tangible benefits that win buy-in from leadership.

3. Decide what to measure

People analytics can make diversity and inclusion measurable, and as the saying goes, what gets measured gets managed. So which diversity and inclusion metrics do you want to measure? 

Female ratio and minority ratio will tell you how many women and minorities you have throughout the organization and in each department, location, and job function. Are women and minorities represented at each level of the organization?

Compa-ratio, which is the ratio of an employee’s or group of employee’s pay to the pay-level midpoint for a given role, is incredibly useful for evaluating how relatively well-paid someone is and whether there is a gender- or minority-based pay disparity in your organization. Do women and minorities have higher or lower compa-ratios than the overall organization?

Performance ratings are another great place to start, given that they can reveal the presence of unconscious bias—learned stereotypes that influence how we behave toward minority groups—in your organization. Compare the performance ratings of women and minorities to the performance ratings of the rest of the organization. Is any group being evaluated more positively or negatively?

When you identify a disparity in the percentage of women or minorities, their compa-ratios, or their performance ratings, that’s both a red flag that warrants follow up and an excellent place to focus your diversity and inclusion efforts.

4. Start small and prove the benefits

Trying to tackle everything at once will overwhelm your team and spread efforts too thin. Instead, pick one challenge to confront, something that is both pressing and measurable, and decide what metrics are most applicable. Then track your organization’s efforts over time, comparing data month-over-month and quarter-over-quarter to see whether your interventions are taking effect. Data can show you where you need to improve, help you make those changes, and tell you whether your efforts were successful. 

Take action today

Diversity and inclusion build on each other. Small steps you take today will accumulate into major changes down the road. You don’t have to wait until you’re ready to tackle every diversity and inclusion challenge your organization faces to act. Put your data to work for you, and you can start making real, measurable progress. 

Looking for more information on how people analytics can shape your diversity and inclusion strategy? Download “The Big Book of People Analytics: Diversity & Inclusion.”

Author Photo
Deep Litt |
Deep Litt is a certified HR Professional with over 15 years of experience across numerous facets of HR. Deep has demonstrated capabilities influencing business leaders with data-driven insights and recommendations to improve the employee experience. She also has a sushi roll named after her!