Exclusive HR.com Industry Research - The State Of Diversity And Inclusion 2018
Posted on 06-22-2018, Read Time: Min
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A diverse organizational culture is great for employees and businesses alike. Diversity and inclusion (D&I) have the potential to drive innovation and increase organizational performance. Organizations with diverse workforces attract talent and are more successful. Yet, strong D&I cultures are still not the norm in most workplaces today. To understand more about the status of D&I in today’s organizations and its impact on employee performance, HR.com conducted this exclusive state of the industry research.
Below are key findings from the study based on an extensive survey of HR practitioners.
- D&I programs today are largely immature or in development mode.
- A lot of the time, organizations are failing to adequately communicate, manage and measure their D&I programs.
- While diversity among the leadership ranks has shown the potential to drive innovation and change, most organizations do not mandate diverse leadership in its ranks, and most fail to reflect substantial diversity in their leadership teams.
- Some diversity-friendly benefits are offered today, but there is much room for improvement.
- Organizations that broadly define, communicate, measure and get support from the top are more likely to find their D&I programs highly effective.
Is Today’s Workforce Increasingly Diverse?
We asked study participants to indicate the extent to which they agree with the statement that “our workforce is more diverse than it was years ago.” Over half (54%) agreed with that statement, whereas just 14% disagreed. In short, most said their organizations have become more diverse, while few said they’ve become less diverse.
The bad news, however, is that organizations still tend to have poorly developed D&I initiatives, and only about half say that their workforces reflect the demographics of the marketplace. Moreover, the leadership ranks of most organizations still tend to lack significant diversity and inclusion.
The majority (80%) of survey participants indicated 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 one-eighth are at Advanced stage.
D&I efforts today need to meet a number of regulatory requirements. 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.
The bad news, however, is that organizations still tend to have poorly developed D&I initiatives, and only about half say that their workforces reflect the demographics of the marketplace. Moreover, the leadership ranks of most organizations still tend to lack significant diversity and inclusion.
The majority (80%) of survey participants indicated 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 one-eighth are at Advanced stage.
D&I efforts today need to meet a number of regulatory requirements. 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.
Survey Question: Which of the following areas are included in your organization's definition of workforce diversity and inclusion? (check all that apply)
D&I Program Management
HR is most commonly responsible for D&I initiatives (36%). Another 10% cite chief diversity officers (CDO) as having primary responsibility. However, it should be noted that CDOs are sometimes part of the HR function. Together, they represent nearly half of the responses. About a quarter of respondents state that “everyone” is responsible for D&I.
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 listed here are Employee Resource Groups, or ERGs, which tend to be voluntary groups led by employees themselves.
Only about one-quarter of participants require training to a high extent. Of that cohort, nearly two-thirds train all employee groups (67%). One-fifth, however, train “select employees and managers” while about one-eighth train “only managers” (12%). Although some HR professionals may find that limiting training to managers is an effective strategy, others argue it fails to be effective in engaging all employees in D&I.
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 listed here are Employee Resource Groups, or ERGs, which tend to be voluntary groups led by employees themselves.
Only about one-quarter of participants require training to a high extent. Of that cohort, nearly two-thirds train all employee groups (67%). One-fifth, however, train “select employees and managers” while about one-eighth train “only managers” (12%). Although some HR professionals may find that limiting training to managers is an effective strategy, others argue it fails to be effective in engaging all employees in D&I.
What Metrics Are Used to Measure D&I?
Although participants 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 look at diversity goals related to succession planning, although such goals might be used to evaluate the existence of “glass ceiling” issues within organizations.
How Successful Are Initiatives?
Survey respondents typically believe that D&I initiatives result in higher rates of innovation, better compliance with laws and regulations, and stronger business performance in general. Increased innovation is most widely cited, and there are various studies supporting this contention.
The most commonly cited barriers to effective D&I are a lack of budget and a lack prioritization by top leadership levels. It is possible that many leaders are not aware (or skeptical of) the benefits of D&I because they have competing priorities or because they have no interest in changing the established culture. If leaders do not prioritize it, of course there will be no chance for an adequate budget. About a quarter of respondents cite a lack of technology (23%) and 28% cite a lack of metrics.
The most commonly cited barriers to effective D&I are a lack of budget and a lack prioritization by top leadership levels. It is possible that many leaders are not aware (or skeptical of) the benefits of D&I because they have competing priorities or because they have no interest in changing the established culture. If leaders do not prioritize it, of course there will be no chance for an adequate budget. About a quarter of respondents cite a lack of technology (23%) and 28% cite a lack of metrics.
Diversity Among Leaders
Although women are nearly half the U.S. workforce, they have a miniscule representation in some key corporate leadership realms. For example, as of May 2018, there were 24 female CEOs of Fortune 500 companies. That’s a little less than 5%: therefore, they are about 47% of the workforce but 4.8% of the top business leaders.
In most respondent organizations (61%), women are less than 40% of leaders. In nearly a quarter of responding organizations, they are no more than 10% of leaders.
Our study indicates, however, the leadership ranks in most organizations are much less diverse than the workforce in general. About three-quarters of respondents say ethnic/racial minorities are no more than 30% of their leaders. In fact, nearly half (47%) say no more than 10% of their leaders are members of ethnic/racial minorities. The bottom line is that these diverse populations are vastly underrepresented in leadership ranks today.
In most respondent organizations (61%), women are less than 40% of leaders. In nearly a quarter of responding organizations, they are no more than 10% of leaders.
Our study indicates, however, the leadership ranks in most organizations are much less diverse than the workforce in general. About three-quarters of respondents say ethnic/racial minorities are no more than 30% of their leaders. In fact, nearly half (47%) say no more than 10% of their leaders are members of ethnic/racial minorities. The bottom line is that these diverse populations are vastly underrepresented in leadership ranks today.
Diversity-Related Benefit Plans
The survey asked HR professionals what benefits and work-arrangements are offered to make it easier for diverse employees to work at their organizations. Flexible work options (60%), 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.
Over the past few years, fertility benefits have received a lot of attention. We found that 9% already provide fertility benefits and another 2% are seriously considering offering such benefits. A considerable proportion, however, said their organizations know little about such benefits. This suggests that many HR professionals require greater education about a benefit offering that may appeal to today’s increasingly diverse labor force.
Over the past few years, fertility benefits have received a lot of attention. We found that 9% already provide fertility benefits and another 2% are seriously considering offering such benefits. A considerable proportion, however, said their organizations know little about such benefits. This suggests that many HR professionals require greater education about a benefit offering that may appeal to today’s increasingly diverse labor force.
How Do High D&I Performers Differ?
- High performers 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-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 performers are more likely than lower performers to make “everyone” or a C-level executive (that is, 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 also more likely than low performers to create leadership development initiatives that are focused on improving D&I in leadership ranks.
- High performers are more likely to provide family-focused benefits.
The rise of millennial leaders, combined with society’s broad demands for inclusion and less conservative policies, is beginning to bring more awareness to the transformations that need to occur in the workplace globally. The research results show 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 - The State of Diversity and Inclusion 2018 - along with key strategic takeaways, we invite you to download and read the complete report here:
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