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Reporting on DEI Progress At Your Company
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Workforce Management

Why DE&I Reporting Matters

One-Minute Takeaway

  • Annual DE&I reporting is becoming the norm.
  • A DE&I report should list your goals, measurable progress, success stories, and ongoing challenges.
  • Transparency empowers you to build trust and accountability.

In today’s business landscape, Diversity, Equity, and Inclusion (DE&I) initiatives are no longer optional. More and more, companies are recognizing the value of a diverse workforce. DE&I strategies aren’t just about ethics – they also drive business results (McKinsey).

Just implementing new initiatives isn’t enough. You also have to demonstrate growth. That’s where DE&I reporting comes into play.

What is DE&I Reporting?

DE&I reporting means sharing your company’s efforts to foster an inclusive, supportive workplace. That includes your goals, your achievements, and yes, even your failures. The key to this process is transparency. This invites stakeholders to hold you accountable, and it earns their trust in the process.

As of today, there’s no formal, universally accepted process for DE&I reporting. That said, it’s becoming the norm for companies to publicly share their progress. It’s easy to imagine a future where these annual status updates become a standard part of compliance.

What Goes into a DE&I Report?

A DE&I report should be relevant to your specific business and industry. Most of the time, you’ll want to include:

  • Clearly defined goals: Outline your organizations specific, measurable DE&I goals. By the time you write your report, you should already know what these are. Most of these goals should be easy to track, like, “have 50% of leadership positions filled by women.” If you’re updating your goals for the coming year, be sure to let your stakeholders know.
  • Metrics that matter: Share relevant metrics aligned with your goals. For example, you could talk about the diversity of your applicant pool and hiring panel, retention rates of diverse employees, participation in employee resource groups (ERGs), and so on. You could also share dollar amounts of funds allocated for DE&I efforts, like employee education.
  • How things have changed: Showcase the progress you’ve made over time. To do this, you can compare last year’s metrics to your current achievements. In a qualitative report, you can describe how and why things have changed at your company.
  • Success stories: Don’t be afraid to brag! Without inflating the numbers, talk about the positive impact of your DE&I efforts. This section could include personal stories from employees, case studies about your customers or community, and more.
  • Ongoing challenges: Be transparent about what’s holding you back. If you failed to meet your annual goals, explain why you think that happened, and how you plan to rectify it. Acknowledging these gaps is central to accountability. Describe how these challenges will inform your future goals.

DE&I, CSR, and ESG Reporting – Oh My!

It’s important to distinguish between DE&I reporting, Corporate Social Responsibility (CSR) reporting, and Environmental, Social, and Governance (ESG) reporting. While related, each one is a little different:

  • DE&I reports focus on your commitment to building a diverse and inclusive workplace.
  • CSR reports describe your company’s financial impact, including philanthropic work, fair labor practices, ethical supply chains, and similar.
  • ESG reports give a holistic view of your non-financial performance. They describe your environmental impact and resource efficiency, community engagement, employee well-being, risk management, and more.

There’s a lot of overlap here, but each report serves a slightly different purpose. For U.S. companies, none of these reports are strictly required by the federal government. However, you may need to report on a lot of the same data in other contexts. And market trends are pushing more companies to share this information openly. Going forward, I foresee this becoming a major concern for investors and shareholders.

Why Does DE&I Reporting Matter?

First and foremost, DE&I reporting demonstrates your commitment to improvement. A well-crafted report shows you’re willing to invest time and energy into staying accountable. This sends an important message to your employees, customers, investors, shareholders, and the general public.

DE&I reporting is one of the best ways for you to join in the wider conversation about these efforts. Sharing your progress helps set the standard for other companies in your industry. If you’re leading the way forward, other business leaders will start looking to you as an example.

For HR leaders, this process has a very practical impact. Showcasing your commitment to DE&I is a great way to attract top candidates from a larger talent pool. That becomes a positive feedback loop – next year, you can report that your workforce is even more diverse.

The DE&I Maturity Model: Embracing Your Stage of Growth

It takes time to build a truly inclusive workplace. In my own work, I try to embrace every stage of the process as a learning opportunity. I find inspiration and reassurance in Dr. Ella F. Washington’s DE&I Maturity Model (Harvard Business Review). Dr. Washington describes 5 stages of DE&I maturity for any organization:

  1. Aware: Recognizing the importance of DE&I and taking initial steps to gather data and establish goals.
  2. Compliant: Implementing basic compliance measures to avoid legal issues.
  3. Tactical: Developing and implementing specific DE&I initiatives.
  4. Integrated: Embedding DE&I principles into every aspect of the organization’s culture and operations.
  5. Sustainable: Continuously measuring progress, adapting strategies, and ensuring long-term sustainability of DE&I efforts.

Progress is important, but honesty is non-negotiable. If you’re in stage 3, acknowledge that – don’t announce that you’re in stage 4 or 5. Showing your progress – even if it’s slow – gets your community more involved in your story.

Facing the Challenges of DE&I Reporting

DE&I reporting can be daunting. For example, you might worry that sharing your challenges could damage your company’s image. But here’s a tip: when it comes to DE&I, transparency can only work in your favor. If you’re not getting results, fix it by fixing your DE&I strategy! Then, you can even talk about those changes in your marketing materials. 

Employee privacy can get in the way of proper reporting. ADA laws restrict which questions you can ask your team, making it hard to collect accurate demographic data. There’s an HR solution for this challenge, too: create a psychologically safe environment at work. When your team members have good reason to trust you, they may be more willing to share personal information – on a secure platform, of course.

The Evolving Landscape of DE&I

The field of DE&I is constantly growing and changing. While it isn’t a new concept, 2020 represented a major cultural shift in the way companies think about diversity. Leaders need to stay informed about emerging best practices and adapt accordingly.

DE&I reporting is a valuable internal tool for HR leaders. These documents help you track your company’s progress over the years. You can use them to evaluate what worked, what didn’t, and why. In the long term, they can help you develop best practices for building your DE&I strategy.

HR Tools for Diverse Teams

Use Paycor’s suite of HR solutions to streamline every aspect of reporting. With a single source of truth for employee data, leaders can easily track their progress and analyze key metrics for DE&I reporting.

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