Diversity, equity, and inclusion (DE&I) efforts are key components of any HR strategy. A more welcoming, inclusive culture drives key HR metrics like retention, productivity, engagement, and more. Prioritizing DE&I can even improve your brand reputation, directly impacting your company’s finances.
The problem is, DE&I can be hard to define. And far too many HR departments create “initiatives” or “resolutions” that promote big, vague ideals, instead of working toward a concrete list of goals. If you want to make meaningful improvements – and demonstrate progress to the C-suite – you need to start tracking DEI metrics.
What are DEI Metrics?
DEI metrics are quantitative measures that help HR evaluate whether the workforce is diverse, equitable, and inclusive. These measurements should keep you on track to reach key DE&I goals, which, in turn, should align with your HR strategy and long-term business plan. Leaders should analyze DEI metrics numbers regularly to track progress and pivot when needed.
Importance of Measuring DEI Metrics
Tracking diversity metrics empowers HR to design a more effective strategy. Robust data offers insight into your current standing, helps you identify areas for improvement, and allows leaders to track the effectiveness of their DE&I efforts over time.
The act of collecting DEI data can also impact company culture. This process demonstrates your commitment to DE&I, sending an important message to your team members, customers, and other stakeholders.
Benefits of Tracking DEI Metrics
There are several benefits to tracking diversity and inclusion metrics. Gathering and analyzing this data empowers HR to:
Make Better Decisions
By analyzing DE&I metrics, leaders can easily track trends, make predictions, and pinpoint issues before they become problems. When HR understands the impact of specific initiatives, it’s easier for leaders to choose which projects to focus on in the future.
Reduce Compliance Risks
Depending on the size of your organization, you may be required to follow state and federal laws prohibiting discrimination. The details of these laws change as your company grows.
For example, the Equal Pay Act requires companies with one or more employee(s) to give men and women equal pay for equal work. Companies with 15-19 employees must comply with additional laws that bar discrimination based on race, gender, disability, and other demographics. Companies with 20+ employees need to track even more regulations, which change over time.
Even accidental discrimination can put you at risk of major compliance issues. For example, failure to conduct regular pay equity audits can lead to severe compensation discrepancies. Tracking DEI metrics ensures HR has all the necessary data to avoid fines and legal problems.
Expand the Talent Pipeline
80% of workers want to work for a company that values DEI (LinkedIn). That percentage goes up among Gen Z and Millennial job candidates. Measuring DEI metrics is the best way for HR to demonstrate the company’s commitment to diversity, equity, and inclusion, which appeals to the next generation of talent.
Increase Employee Engagement and Productivity
Employees work harder when they feel included. People are also more innovative when they feel safe to be their authentic selves at work. Robust DE&I policies allow team members to focus on work-related tasks instead of putting unnecessary time and effort into fitting in or hiding their identities.
In addition, demographic diversity naturally leads to diversity of thought. When your team includes people of various genders, races, ethnicities, sexual orientations, and so on, they’ll have vastly different life experiences. Sharing those perspectives adds to the collective brainpower of the entire team.
Drive Long-Term Retention
Companies that prioritize DE&I have higher retention rates (Forbes). Collecting hard data can help HR understand whether your DEI efforts are having a direct impact on turnover. You can also track trends over time and update your strategy as best practices change.
12 Best DEI Metrics to Track
These examples can help you start tracking DE&I metrics, but every organization is unique. Choosing which metrics to track is an important part of measuring DE&I at your business. HR leaders should customize the DE&I evaluation process to align with the company’s needs.
1. Representation
Representation metrics evaluate the diversity of the workforce across various demographics. This data can tell you whether the employee base reflects the diversity of the labor market. Make sure you analyze representation across all levels, especially among managers and company leaders.
Examples:
- Percentage of women employees at the company
- Percentage of Black managers in a department
2. Pay Equity
Pay equity metrics assess whether employees in similar roles receive comparable pay, regardless of gender, race, ethnicity, or other protected characteristics. Analyzing pay equity helps identify and address any pay gaps.
Examples:
- Average salary of male managers vs. average salary of female managers
- Average hourly rate of white cashiers vs. average hourly rate of non-white cashiers
3. Employee Retention
Retention is always an important HR metric, and it can be especially valuable when you’re measuring DE&I success. Leaders can analyze the retention rates for different demographic groups to reveal disparities in the employee experience.
Examples:
- Turnover rate for Black employees within their first year of employment vs. turnover rate for white employees within their first year of employment
- Retention rate for female employees compared to male employees in technical roles
4. Leadership Representation
HR should measure diversity across leadership, including managers, directors, and executives. These DEI metrics ensure that decision-making power is distributed equitably across people of different demographics.
Examples:
- Percentage of LGBTQIA+ employees in executive roles
- Number of Black employees promoted to manager or director levels within the last year
5. Candidate Demographics
Measuring the diversity of job applicants provides valuable insight into your recruiting strategy. These DEI metrics tell you whether your company appeals to a diverse talent pipeline. If your pipeline isn’t meeting DEI goals, recruiters could partner with more diverse community organizations, rewrite job descriptions to be more inclusive, or post on a wider variety of job boards.
Examples:
- Percentage of applicants who self-identify as Asian within the last fiscal year
- Percentage of applicants for a single role who self-identify as disabled
6. Hiring
While candidate demographics can help you expand your talent pipeline, hiring metrics take recruiting to the next level. These DEI metrics determine whether job applicants are being judged fairly, based on their merits rather than demographics.
Examples:
- Percentage of new hires who are veterans
- Number of women vs. men hired within the past fiscal year
7. Turnover Rate
Voluntary and involuntary turnover rates can tell you a lot about company culture. If employees of certain demographics leave more quickly or often than others, it could indicate the presence of bias or even outright harassment. High voluntary turnover might signify that these employees are being undervalued and would be happier at another company. High involuntary turnover could mean your managers need implicit bias training.
Examples:
- Voluntary turnover rate for employees over age 50
- Involuntary turnover rate for employees with children under age 10
8. Promotion Rate
These DEI metrics assess the rate at which employees are promoted within your organization. Promotion rates can tell you whether all workers have equal opportunities for advancement, or whether people of certain demographics face additional barriers.
Examples:
- Number of white vs. non-white workers promoted in the last calendar year
- Average time women vs. men spend in entry-level roles before being promoted
10. Adverse Impact
Measuring adverse impact can help HR identify any hiring or promotion practices that disproportionally affect certain groups. While adverse impact is typically unintentional, it can have major negative consequences for some of your employees.
Examples:
- Hiring rates for women vs. men in the past fiscal year
- Promotion rates for employees over age 50 vs. employees under age 50
11. Employee Resource Group (ERG) Participation
Employee Resource Groups (ERGs) are employee-led affinity groups for team members with various identities. Many ERGs are also open to people who support those identities. For example, an ERG that supports women’s issues might invite men to join as advocates. High participation in ERGs can indicate widespread support for DEI at your company.
Examples:
- Percentage of employees participating in women’s ERGs
- Average number of employees who attended ERG-hosted events in the past quarter
12. Inclusion Index Score
Designing an inclusion index can help you track key DEI progress. To create an inclusion index, HR should work with other company leaders to identify and rank top DEI priorities. Then, analyze your DEI metrics holistically, assigning weight to various metrics based on their importance. This analysis should give you a score indicating the overall success of your DEI strategy.
Examples:
- Percentage of employees who report a sense of belonging and do NOT report experiencing discrimination
- Percentage of women who have experienced harassment or discrimination at work
Additional DEI Metrics to Monitor
The DEI metrics above can help HR track quantitative progress. However, qualitative progress is just as important. Leaders should also regularly evaluate the more subjective aspects of DEI, such as:
Accessibility
Does your company provide accessible options for people with disabilities? To answer this question, you’ll need to evaluate your physical space, online presence, and company culture.
Examples:
- Is your storefront or office physically accessible to people who use wheelchairs? Do you have doorknobs or accessible door handles? Are the pathways wide enough for people who use walkers?
- Does your website have sufficient color contrast? Do images include alt text (image descriptions)?
- How easily can employees take sick days for their mental health?
Employee Engagement
Engaged employees are more focused, productive, and likely to stay with your company in the long term. While employee engagement is one of HR’s top priorities, it can be difficult to measure. However, answering certain questions can give you some insight into your team’s engagement levels:
Examples:
- How often do employees participate in online or in-person events, complete surveys, or share their feedback when asked?
- What percentage of employees belong to an ERG?
- Do employees express pride in their accomplishments at work?
Employee Satisfaction
Widespread job satisfaction can indicate that you’re on track to achieve your DEI goals. This signifies that HR is successfully supporting diverse employees. While this outcome can’t be measured directly, you can use other DEI metrics to evaluate overall employee satisfaction.
Examples:
- Did your voluntary turnover rate change when you implemented a particular DEI initiative?
- How often do employees refer friends to apply for open positions?
- What qualitative feedback do managers receive during performance reviews? What write-in suggestions does HR receive from company-wide surveys?
Partnership and Channels
Developing external partnerships helps your company cultivate diversity, inclusion, and belonging in your wider community, not just on your team. These connections can aid in recruiting efforts and sales by improving your organization’s name recognition and reputation.
Examples:
- Partner with a local veterans’ organization to provide training or returnship opportunities, or host expert speakers.
- Offer your employees volunteer opportunities with partner non-profits.
- Design an internship program and advertise it through channels at a partner college or university.
How to Measure Diversity, Equity, and Inclusion Metrics Effectively
These best practices allow leaders to track important DE&I metrics:
Use HR Technology
HCM software streamlines the process of tracking DEI metrics. It also offers valuable insights, helping you track trends and understand employees’ needs. With the right tools, HR can automate data collection, reporting, and analysis, giving leaders more time to focus on strategy.
Establish Clear DEI Goals
Setting clear, specific DEI goals gives you – and everyone on the team – something to work toward. You can measure progress, celebrate milestones, and change tactics as needed. Leaders should make sure their DE&I goals are aligned with business objectives and integrated into their overarching HR strategy.
Conduct Surveys
Employee surveys are the easiest way for HR to learn about inclusion metrics. This method allows HR to collect anonymous, self-reported data in a psychologically safe environment. Workers feel more comfortable sharing negative opinions when they have some reassurance of privacy. Running regular surveys – quarterly, biannually, or annually – allows HR to track important trends.
Regularly Communicate Results
Transparency builds trust. HR should regularly communicate information about the company’s DE&I strategy, describing notable wins and ongoing challenges. Ideally, leaders should share this data with the entire team and external stakeholders, including customers and community partners, but make sure to secure executive approval before publishing a report.
DEI Metrics FAQs
How Often Should DEI Metrics Be Calculated?
HR should calculate DEI metrics on a regular basis, but the exact frequency depends on your company’s size and needs. Larger companies and those with higher turnover should review most metrics quarterly. Some metrics, like compensation data, should be reviewed annually for companies of any size.
How to Use DEI Metrics Effectively?
HR should always be prepared to make changes based on their analysis of DEI metrics. Use this data to identify areas for improvement for your DEI strategy and track progress toward goals. You can also use the DEI metrics for effective, compliant DE&I reporting.
How Paycor Helps with DEI Metrics
Paycor’s comprehensive suite of HR software empowers HR to track and analyze important DEI metrics. For example, leaders can run regular Paycor Pulse surveys to collect anonymous employee responses in a psychologically safe environment. Paycor Analytics provides real-time, user-friendly insights into complex data. And when you’re ready to implement strategic changes, our Talent Development Software drives employee engagement, retention, and job satisfaction.
Track Your DEI Metrics with Paycor
Measuring DEI metrics is the first step in creating a more inclusive, innovative workplace. Paycor’s tools empower HR to track DEI metrics, analyze data, and make meaningful changes that drive results.