DiversityInc Best Practice’s “Guide to Developing Diversity Scorecards and Metrics” is an insider’s guide for diversity and data teams that provides insights on data transparency, scorecard strategy and development, as well as tips on driving accountability in your diversity efforts. This is part one. Check back soon for more insights on these essential concepts in scorecard development.
In the last 18 months, pressure has mounted for everyone from executives to line managers and diversity activists to better understand the metrics used to analyze the impact of diversity and inclusion efforts.
The difference between your D&I efforts being perceived as merely feel-good press releases and a business imperative that aligns with the organization’s goals comes down to communication, measurement and impact analysis. A crucial tool in this mission is the development of diversity scorecards and metrics. Tracking metrics will provide transparency and a platform to showcase how impactful these efforts have been for the company across the board.
Communication, however, is a vital element that can’t be overlooked, whether the information is communicated to individual stakeholders, in companywide communications or publicly.
“Since the racial reckoning in the United States that has happened since George Floyd’s murder, we’ve become much more transparent as an organization,” said Eric Mitchell, Associate Vice President of Workforce Diversity at AT&T (a DiversityInc Hall of Fame company). “Suddenly, we aren’t just looking at management and non-management [occupational titles], we’re looking at senior levels of leadership. You can see how representation of women and people of color tapers off the higher you go up.”
Mitchell noted that the prioritization of transparency came from senior leadership but didn’t necessarily paint a comfortable picture for the leadership group. Since that picture has become more apparent, the organization has worked to identify metrics that not only help to level-set the perception of AT&T’s diversity profile but also show opportunities on where to improve it.
“Having a snapshot of a business group at the end of a quarter is nice, but it doesn’t help me look at the movement, changes and areas of opportunity that will enhance my ability to influence the numbers,” Mitchell said. “Now, what we’re doing is enhancing that scorecard to add things like promotion rates, hire rates, lateral-movement rates, loss rates, etc. So, now you can see how you’re trending and what will happen if you just keep going business as usual. It’s a real diagnostic that shows what specifically an organization or team within the business can do to move in the right direction.”
The scorecard has long been a tool to show representation, but as we begin to analyze the employee experience, it now has the potential to show how that representation translates into opportunity for underrepresented groups. The knock-on effect of that is a better understanding of retention and how the employee experience can influence your ability to recruit.
“Diversity teams can use [scorecards] with the help of HR, VPs and Chiefs of Staff to determine what can really be done,” Mitchell said. “In the past, when leaders were asked to support diversity, equity and inclusion, they’d talk about ERGs, their involvement as executive advisors and mentors. That’s nice on an activity basis, but that’s not changing your workforce profile. We need to make sure they have the data necessary to make decisions about how to move forward, how they can further support equity and how to address factors that are preventing people from having the right opportunities.”
Rethinking the Scorecard
If you’ve ever heard any criticism of diversity and inclusion initiatives, you’ve probably heard someone say they don’t understand the difference it’s making or how it impacts the goals, strategies and processes the business aims to meet or improve.
Diversity scorecards once focused primarily on representation. They were designed to measure gender and racial percentages for the workforce, management and top executives — beyond that, the function and purpose of these scorecards were limited.
A modern definition of successful scorecards and the dashboards that support them is different than it would have been even just a few years ago. These days, a scorecard is designed to examine relevant variables related to diversity and inclusion, such as supplier diversity, engagement, retention, talent development and contributions to market growth.
“Leaders need a variety of insights from these scorecards,” said Rick Gomez, HR Business Partner at AT&T. “We need to look at all types of metrics, whether that’s headcount or compensation, bonuses, awards, staffing, replenishment, performance-management ratings and so on. We’ve been working to build a single place for them to view [the information], but through the lens of diversity. We want to know if we’re providing performance ratings the same for everyone, for example, and we need our managers to have that holistic view of the entire talent landscape.”
This evolution of the scorecard must continue, especially as more data becomes available around employee trends, behaviors and achievements. Successful companies will find new and innovative ways to plug that data into their overall approach to diversity.
There are six fundamental principles that diversity teams and HR leaders should focus their scorecards around, and they are the foundation of DiversityInc’s annual Top 50 Companies for Diversity competition. These include:
- Human Capital Diversity Metrics: Gender and racial/ethnic representation of the overall workforce and management, as well as representation in new hires, promotions, turnover and the 10% highest-paid employees.
- Leadership Accountability: CEO/senior leadership commitment and accountability, diversity and inclusion management, as well as representation metrics and practices of the board of directors and diversity councils.
- Talent Programs: Participation metrics and practices for formal mentoring, formal sponsorship, employee resource groups and high-potential programs.
- Workplace Practices: Practices and metrics related to talent acquisition, talent management, onboarding, diversity training, workforce development and engagement, LGBTQ inclusion, people with disabilities, military community and employee benefits.
- Supplier Diversity: Procurement spend with companies owned by people from underrepresented groups, as well as leadership accountability and management practices.
- Philanthropy: Contributions to and engagement with nonprofit organizations focused on people from underrepresented groups.
“It’s about really being intentional, being maniacally focused on tracking these metrics and focused on getting a sense of where we’re progressing, both good and bad, as it relates to progress around diversity or inclusion-related metrics,” says Chris Johnson, Director of Inclusion & Diversity at Humana (No. 13 on The DiversityInc Top 50 Companies for Diversity list in 2021)
Want to see examples of diversity scorecards and how leading companies go about constructing them? Watch the video below and download the accompanying deck with it!
Download the deck here!
In part 2, we’ll examine how scorecards are adapted for the audience, how to align your metrics with business goals and what the evolution of the scorecard looks like going forward.