Industry Research Summary: The Future of Diversity, Equity and Inclusion 2021

Advance DEI initiatives to achieve greater long-term organizational success

Most of today’s organizations lack mature and effective diversity, equity, and inclusion (DEI) programs, according to our 2021 study. The organizations that do have effective DEI programs tend to share a range of characteristics and practices. In short, they achieve their status by working at it. The HR Research Institute conducted a study to understand why so many struggle as well as how the best ones succeed.

Key Findings

• Companies struggle to fully mature their DEI programs.
• While nearly two-thirds agree or strongly agree that pay is equitable in their organization, there is much room for improvement.
• Most companies fall short in the areas of metrics and training.
• Although progress has been made in cultivating a more diverse workforce, many companies still have a long way to go.
• Companies are often not considering benefit programs that appeal to a diverse workforce, leaving considerable room for improvement.

How Developed Are Today’s DEI Practices?

One of the primary reasons many organizations have failed to cultivate diverse workforces and leadership teams is that their overall DEI initiatives are weak or are only in the beginning stages. In fact, only about two-fifths of HR professionals indicate their organizations have “advanced” (30%) or “expert” (11%) DEI practices. The remaining 59% fall into less mature stages. Further, just 30% rate their organization’s DEI initiatives as very effective (that is, respondents say their organization’s DEI initiatives are an 8, 9 or 10 on a 10-point scale). This lends support to the previous findings that most do not view their organization’s DEI practices as being in the “advanced” or “expert” stages.

Collectively, these findings suggest that most organizations and most HR departments have the ability to manage DEI much more effectively in the future. The Future of Diversity, Equity and Inclusion 2021 report shows how organizations are managing DEI and what they might do better to improve in this area.

How Diverse Is Today’s Workforce?

A majority (69%) of responding organizations agree their workforces are more diverse than two years ago, and a similar percentage (67%) say their cultures are more inclusive. However, somewhat fewer (58%) agree or strongly agree their workforce reflects the demographics of today’s marketplace.
 

Women make up roughly half of the workforce, yet they are often under-represented in the leadership ranks, a situation commonly referred to as the “glass ceiling.” To investigate this trend, we asked respondents about gender diversity among their leaders.

About half of respondents (54%) say women represent no more than 40% of their organization’s leaders. Another 29% say women make up 41% to 60% of leaders. On the other end of the spectrum, roughly one-fifth say women represent 61% or more of their organization’s leaders.

Ethnic/racial minorities make up about 40% of the U.S. population, according to Census Bureau estimates.² Our study finds, however, that about one-third (35%) of respondents say ethnical/racial minorities comprise no more than 20% of their organizations’ leaders. This suggests ethnic minorities are also under-represented in many leadership ranks.

What Is the Scope of DEI?

We asked participants to indicate the percentage of their average workweek that is devoted to DEI issues, programs or policies. About two-fifths (44%) say no more than 20% of their role is focused on DEI, while time spent varies for the remaining respondents.

Of organizations with DEI initiatives, 37% say the HR function as a whole is primarily responsible for DEI. Another 14% say the CEO/President is responsible and another 12% indicate Chief Diversity Officers (CDOs) are responsible, though these executives may work under the umbrella of the HR department. Roughly one-tenth (9%) of participants say “everyone” is responsible.

What Types of DEI Inclusive Work Arrangements Do Companies Offer?

Companies most commonly offer flexible work options (57%). In fact, 92% of millennials identify flexibility as a top priority when job hunting, and 80% of women and 52% of men want flexibility in their next role.³ Women with flexible work arrangements are more likely to return to work after having children.⁴

What Is the State of Pay Equity?

Nearly two-thirds agree or strongly agree that pay is equitable in their organization. According to a 2020 report released by the World Economic Forum, women earn just 63%, on average, of what men make for the same work.⁵

We asked respondents about “what drives the goal of providing equitable pay” in their organizations. About half say that the need to recruit (46%) and retain (46%) the right talent drives that goal. The need to ensure compliance (39%) or remove bias (30%) are cited less often, but they clearly indicate that many organizations have both legal and talent management reasons for pursuing equitable pay.

What Types of DEI Training Are Most Common?

Among organizations that offer DEI-related training, the most widely provided is inclusion awareness training (52%). Two-fifths use communication practices training (39%). This, and specific training around conflict resolution (34%) and difficult conversations (41%), can be helpful for managers and employees who need to communicate DEI issues without unintentionally giving offense or being accused of discrimination.
 
Footnotes  

---