New research reveals Diversity & Inclusion efforts well-intentioned, but lacking

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Today at IMPACT 2014: The Business of Talent, we’re launching new Bersin by Deloitte research on Diversity & Inclusion (D&I) nine months in the making. Our study of 245 organizations with operations in North America, 56 percent of which are global or multinational, reveals no shortage of good intentions when it comes to fostering an inclusive culture. Execution and results, however, are lagging.

A few of the highlights from our new benchmarking study:*

  • Though most organizations want to be inclusive, most are not today. A clear majority of respondents (71%) aspire to have an “inclusive” culture in the future, where employees feel involved, respected, valued, and connected, and where their diverse backgrounds are put to work to drive value and business results. Only 11% of organizations report having an inclusive culture today.
     
  • D&I is seen as an investment in driving employee and business outcomes….  Respondents selected “enhance employee engagement,” “serve customers better,” and “increase innovation and agility” as their top three reasons to invest in D&I. FORTUNE 500 respondents, much more than the average, were primarily focused on enhancing engagement, and increasing innovation and agility.
     
  • …However, monetary investment per employee is small… Employers surveyed understand the value of diversity and inclusion, but aren’t spending very much on a per-employee basis. Most are spending just over $50 per employee to support D&I efforts; only about 5% of the $1,159 organizations said they spent per employee on learning & development in 2013.**
     
  • …And metrics are being tracked, but not leveraged. Although the majority of organizations are tracking metrics, most are not using them effectively. Almost two-thirds of respondents (62%) report diversity and inclusion efforts are not well-mapped with metrics to strategic business outcomes. Only 10% of respondents “strongly agree” that their organization changes/adjusts/refreshes D&I strategies and solutions based on evaluation data or feedback.

Overall, our research found that most D&I initiatives today suffer from a lack of “three Fs”— focus, funding, and follow-through. Only one in four organizations includes a D&I metric when determining the CEO or executive compensation; the percentage is even less for managers at 18%. Moreover, public accountability for achieving D&I outcomes is small. While almost one-third of leaders (31%) publically discuss the business value of inclusion “to a great extent,” only 12% discuss to a “great extent” their organization’s effectiveness at achieving D&I goals, and only 2% of respondents “strongly agree” their organization’s metrics are transparent and shared among employees.

Instead, to improve D&I effectiveness, organizations should focus on three S’s—

  • Strategic alignment with business and talent outcomes. Performance management should be the tool that creates D&I accountability by setting goals and tracking performance against those goals. Recruiting, selection, and assessment processes should also be designed to engage individuals with both traditional and invisible diversity.
     
  • Senior leaders publicly championing and staying involved in D&I initiatives. As is typical when driving change throughout an organization, “tone at the top” is critical. For  example, as part of its diversity initiative, a global financial services company profiled in the research  has established a global council comprising 40 senior leaders from Asia-Pacific, EMEA, Latin America, and the U.S.. The council meets twice a year, with the goals of creating a clear sense of accountability for diversity efforts companywide, and championing measurable and actionable diversity and inclusion initiatives.
     
  • Support for employees. D&I efforts should be integrated with learning and leadership development aimed at helping them manage conflict for positive outcomes, build successful mentoring relationships, and feel comfortable presenting their authentic selves. Leaders should encourage employees to ask questions, be open to new ideas and innovative approaches, and engage in meaningful conversations about diversity.

Along with the benchmarking report, Bersin by Deloitte is also launching The Diversity and Inclusion Primer for those new to or having little experience with D&I; The Diversity and Inclusion Framework for those taking a fresh look at their diversity and inclusion initiatives; and additional tools and a Playbook that pulls D&I resources together in one place.  These resources will be available to Bersin research members at www.bersin.com.

As the focus for organizations continues to shift from counting heads (“diversity”) toward making heads count (“inclusion”) for greater engagement, performance, and innovation, we’ll continue to research and report on their investments in D&I strategies, and their effectiveness in tying them to business strategies.

*  For more about these and other survey results, see The Diversity and Inclusion Benchmarking  Report: An Analysis of the Current Landscape, Bersin by Deloitte/Stacia Sherman Garr, March 2014. Available to research members at http://www.bersin.com/Lib/Rs/ShowDocument.aspx?docid=17320.

** For more information, see The Corporate Learning Factbook 2014: Benchmarks, Trends, and Analysis of the U.S. Training Market, Bersin by Deloitte / Karen O’Leonard, January 2014.

Stacia Garr

Stacia Garr writes on trends and best practices in talent management, focusing on topics such as performance management, employee engagement, career management and workforce planning. In her blog, she likes to share what she's learned about how to make talent management programs more frequent, collaborative, engaging and effective.

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