Industry Research Summary - The State of Diversity and Inclusion 2018/2019

Improving D&I practices to boost organizational innovation and performance

Today’s Workforce Has Become More Diverse, but Problems Exist

Participants were asked to indicate the extent to which they agree with the statement that “our workforce is more diverse than it was years ago.” Over half of HR professionals (53%) agree with that statement, whereas just 16% disagree. Despite this, organizations still tend to have poorly developed D&I initiatives and only about half say that their workforces reflect the demographics of the marketplace.

How Developed Are D&I Practices?

The majority (80%) of HR professionals indicate that their organization’s D&I practices have not attained top organizational maturity levels. Only a small percentage of participants (7%) report that their organization’s initiatives are at the top (Vanguard) level and about 13% are at the Advanced stage.
 
Survey Question: At what stage of development is diversity and inclusion (D&I) within your organization?

How Is D&I Currently Defined?

D&I efforts today need to meet a number of regulatory requirements. For example, businesses operating in the United States must adhere to federal anti-discrimination law or Title VII [1] which was first enacted in 1964. The law prohibits discrimination on the basis of “race, color, religion, sex, or national origin.” This law also refers to gender identity and sexual orientation [2]. Laws and regulations have a large impact on how organizations define the concepts of workforce diversity and inclusion. Other issues that, some argue, are also aspects of D&I tend to be left out of the definitions of most organizations.
 
Sherryl Dimitry, an expert in diversity talent development, states, “There are two primary fundamental mindsets around D&I: those who incorporate it to mitigate risk and those who embrace it because they see it as a value driver. HR leadership today needs to be honest about their company’s core philosophy and motivation. In reality, getting both of these things right is more crucial than it was ever before. The risk of failure used to be about losing money. Today, it is about whether or not a company will survive.”

Who Is Typically Responsible for D&I Initiatives?

HR is most commonly responsible for D&I initiatives (37%). Another 12% cite chief diversity officers (CDO) as having primary responsibility, though it should be noted that CDOs are sometimes part of the HR function. Together, they represent nearly half of the responses. However, just under a quarter of HR professionals believe that “everyone” is responsible for D&I.

How Well Are D&I Programs Communicated and Managed?

Less than a third (29%) of HR professionals say their organizations consistently communicate D&I throughout the organization to a high or very high degree, and only about a quarter require D&I training or embed the topic of D&I into most talent development materials to a high or very high degree.

The success of an organization’s D&I program initiatives, of course, is largely dependent on how well initiatives are communicated and embraced by employees. The survey findings here suggest that, although many initiatives are executed, they are not well emphasized or implemented in most organizations.
 
The least used initiative appears to be Employee Resource Groups, or ERGs, which tend to be voluntary groups led by employees themselves.
 
Only about one-quarter of HR professionals require training to a high extent. Of that cohort, nearly two-thirds train all employee groups (69%). One-fifth, however, train “select employees and managers” while even fewer train “only managers” (11%). Some HR professionals may find that limiting training to managers is an effective strategy, but others argue it fails to engage all employees in D&I.
 
Although participants today use a variety of tactics to measure the impact of D&I, most rely on basic demographic data (e.g., gender, race/ethnicity, and age). Relatively few (29%) look at diversity goals related to succession planning, although such goals might be used to evaluate the existence of “glass ceiling” issues within organizations.

The most commonly cited barriers to effective D&I are a lack of budget and a lack of prioritization by top leadership levels. About a quarter of HR professionals cite a lack of technology (28%) and 34% cite a lack of metrics.

Diversity Among Leaders

Although women make up nearly half the U.S. workforce, they have a minuscule representation in some key corporate leadership realms. For example, as of January 2019, there were 25 female CEOs of S&P 500 companies. That only totals 5%: therefore, they are about 47% of the workforce but 5% of the top business leaders.
 
The HR.com survey confirms that there’s a problem among organizations. In most companies (62%), women are less than 41% of leaders. In nearly a fifth of organizations today, they are no more than 10% of leaders.
 
The shortage of women leaders are attributed to many possible reasons, but few organizations have leadership development programs focused on improving D&I in leadership ranks.
 


Despite the lack of diversity and inclusion among corporate leaders, only 36% of organizations have one or more development initiatives focused on improving D&I in the leadership ranks. Also, most have no mandates for making leadership more diverse.
 
In fact, it appears that managers have few tangible incentives for increasing diversity. In the large majority of organizations, managers are not even partially rated, promoted or compensated based on their ability to help the organization achieve diversity goals.

Diversity-Related Benefit Plans

The research studied what benefits and work-arrangements are offered to make it easier for diverse employees to work at their organizations. Flexible work options (69%), of course, may appeal to any employee, but they have the added advantage of making it easier for parents of either gender to balance work and family lives. The same is true for telecommuting and part-time work options.
 
Other benefits are more targeted at specific employee groups, such as those in domestic partners (56%) arrangements. Some organizations also offer a growing range of family building/fertility benefits (19%).

What Do High Performers Do Differently?

High-performing organizations* are more likely than lower performers** to adopt a broader definition of D&I, while lower performers are more likely to focus solely on areas related to compliance with laws and regulations. High performers are also much more likely than lower performers to incorporate features such as diverse living arrangements, career aspirations, sexual orientations, sexual identities, and educational backgrounds into their D&I definitions.
 
Looking at the barriers to increasing the effectiveness of their D&I initiatives, high performers are less likely to experience challenges, across the board. High-performing organizations are more likely to 1) get support from leadership, 2) understand the potential benefits of diversity, and 3) make sure diversity is a priority for HR.
 
High-performing organizations are also more likely than lower performers to make “everyone” or a C-level executive (ie. CEO or CDO) responsible for D&I. Lower performers are more likely to leave it up to HR or an executive committee.
 
High performers are much more likely than lower performing companies to communicate well, set goals, measure D&I effectiveness, and embed D&I into talent development materials. A multipronged consistency is key.

High performers are also more likely than low performers to create leadership development initiatives that are focused on improving D&I in leadership ranks. Such programs can help certain diverse groups (e.g., women) overcome the cultural and organizational challenges that sometimes hinder them in their aspirations to become leaders.
 
The research shows that most organizations currently have narrow definitions of D&I, are in the early stages of developing programs and, overall, are unsure about how effective their D&I programs really are. In light of these research findings, what steps should organizations take to make D&I more of a reality in the workplace today? To learn more about the research along with key strategic takeaways, we invite you to download and read the complete report here:


 
Notes
[1] https://knowledge.leglobal.org/anti-discrimination-laws-in-usa/
[2]  https://www.eeoc.gov/federal/otherprotections.cfm
 
* High performers are those respondents who indicated that their organization’s D&I programs are in Advanced or Vanguard stages of development and who also rated their overall D&I initiatives a 7, 8, 9, or 10 on a 10-point effectiveness scale.
**Lower performers are those respondents who indicated that their organization’s D&I programs are in the “underdeveloped,” “beginning”, and “intermediate” stages of development and also rated their overall D&I initiatives a 1, 2, 3, or 4 on the 10 point effectiveness scale.