Using HR Data Analytics to Promote Diversity, Equity and Inclusion

The importance of Diversity, Equity and Inclusion is becoming increasingly more apparent within organisations, with management showing more interest in how they can create a working environment that treats its employees as equal’s, regardless of their backgrounds.

DEI (diversity, equity, and inclusion) itself serves as an umbrella term, that companies use to promote the representation and participation of different groups of individuals, fostering a work environment in which all employees feel respected, supported and valued.

And no – “equity” is not a misspelling, but rather a specifically chosen term: equity refers to the concept of fairness in providing individuals with the opportunities they need to succeed while accounting for their different circumstances and backgrounds. The more familiar term equality refers to the idea of treating everyone the same, regardless of expertise, or experience.

What is DEI?

DEl = values held by organizations, which strive to be supportive of different groups of individuals, including people of different ethnicities, religions, abilities, genders, and sexual orientations.

Diversity can be defined as having a heterogenous mix of identities in an organization. Equity indicates improvements in fair compensation and career development among employees across all different identities. Inclusion is referred to as the sense of belonging and ability to function to one's own abilities within an organization.

Why employers should be measuring and managing DEI?

As DEI becomes more important in promoting an inclusive working environment, the need for a more data driven approach is required by HR to identify potential gaps and opportunities in their workplace. The use of HR technology enables companies to build an open workplace culture, recruit and retain a diverse workforce, while also creating a positive employee experience. As people management becomes increasingly strategic, it strives to utilise technology to both automise administrative functions, but also to capture and analyze employee data, enabling it to make better informed strategic decisions.

Today’s potential job seekers are often attracted to organisations who place an emphasis on the importance of DEI. In addition, academic research shows that organisations who invest in DEI, tend to have a more productive workforce with lower attrition rates. Overall, DEI should aim to improve the general employee experience: it needs to provide all employees with equal opportunities and strive to increase the sense of inclusion amongst all of its workforce.

How do you measure DEI?

"Traditional" data analysis Gender, age, education, tenure, nationality, skills... Be careful with people categorization though. Surveys Surveys should assess: Fair treatment Integrating differences Decision-making Psychological safety Trust Belonging Diversity Make it numerical so you can analyse it with other HRA. Turns out you actually don't really measure this outside of e.g. pay equity – you draw conclusions regarding equity from diversity and inclusion measurement.

Sounds great – but how do you actually do this?

The measurement and management of DEI in companies is usually a joint effort between the HR and IT management functions. Metrics are a great way to quantifiably track and measure diversity, equity, and inclusion at an organisation. They enable your organisation to set concrete DEI goals, track progress towards those initiatives, identify areas of improvement, and create a definition of success. Many companies have already developed data reporting tools solely for the purpose of DEI management. The next step after reporting is to draw conclusions and interpretations from the data.

While DEI might seem like an ambiguous term, it most definitely can and should be measured.

Even though solutions for measurement, reporting, and analytics in regards of DEI already exist, organisations tend to face many challenges in the conduction of DEI analytics. One of the main challenges organisations face lies in defining DEI thoroughly and aligning these definitions with one’s external environmental, social, and governance (ESG) requirements.

Finally, organisations often grapple with more novel analytical methods such as indexation, trend analysis, correlation, and data combination. These various challenges can best be addressed by collaborating with experts and consultants in the field of analytics – bringing best practice knowledge, technological expertise, and an objective point-of-view in the area of DEI.

The future of DEI analytics and steps to embark on

In the future, DEI analytics will involve the integration of new data sources alongside existing HR and Payroll data. This will enable analytics solutions to use predictive techniques more, establishing linkages between business activities and demonstrating the monetary value of DEI initiatives. Moreover, DEI reporting and analytics should increasingly align with the ESG requirements of investors and external indexes, as via this, organisations can “kill two birds with one stone” and demonstrate their commitment to diversity, equity, and inclusion while also meeting the expectations of investors.

Companies embarking on their DEI analytics journey should begin with clearly established definitions. In clearly defining diversity, equity, and inclusion, and aligning it with their overall sustainability goals, companies can develop a clear vision for managing a diverse and inclusive workforce. Gavdi Group offers a wide variety of services on the topic of HR analytics whether it be advisory, training or the implementation of an analytics platform for people insights.

About the author

Gavdi Project Manager, Joel Pirinen works at the company’s Finnish office and specializes in projects regarding HR systems and people analytics development. Joel, who is keenly interested both in project management, but also corporate sustainability and people analytics, finalized his studies at Finland’s Aalto University School of Business in 2023.

As part of his studies, he completed his thesis on the topic of “Utilising People Analytics in the Management of DEI”. The study, which was conducted in collaboration with Gavdi Group received the maximum grade of 5. The thesis shines a light on how social sustainability, and especially diversity, equity, and inclusion (DEI) can be measured and managed more efficiently via the usage of data and analytics.

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