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DiversityInc Top 50 Methodology

For 2014, we increased the utilization of SAS software to evaluate our data. We feel the accuracy of The DiversityInc Top 50 Companies for Diversity list has been significantly improved.

We added even more quantitative factors to the analysis and now consider 183 separate factors, some nested. We now consider Black women, Black men, Latinas, Latinos, Asian women, Asian men and all women as separate categories. Tier II (subcontractor) supplier-diversity spend was considered and our emphasis on best practices was tied back to each best practice’s relationship to measurable outcome.

To enhance accountability, we required every company to send a notarized form that the information was correct, signed either by the CEO, the CHRO or a corporate officer.

We also gave extra credit for accountability to companies that voluntarily shared their EEO-1 data with us. This data is not being publicized but is being used to verify DiversityInc data submissions.

Some of the specialty lists have changed. These lists, which are determined by the same application as the DiversityInc Top 50, showcase efforts in specific diversity-management areas. To make the lists more relevant to the actual best practices for which we collect data, we have dropped the Top 10 for Blacks, Latinos, Asians and Executive Women and substituted Top 10 lists for Employee Resource Groups, Mentoring and Executive Diversity Councils.

We did not use the age-breakdowns by gender and by race/ethnicity, but they proved to be statistically significant in ranking companies. They will be very helpful in benchmarking companies and we are strongly considering having that age be a factor in next year’s competition.

About the Survey

The Top 50 list is based entirely on empirical data obtained in our survey. Participation in the survey is free and companies that do business with DiversityInc receive no preferential treatment.

In order to participate, an organization must have at least 1,000 employees and fill out our detailed, 300-question survey, which is divided into four equally weighted areas. The areas were redesigned this year and the new report cards, which every participating company received, reflect these areas: Talent Pipeline (workforce breakdown, recruitment, diameter of existing talent, structures); Equitable Talent Development (employee resource groups, mentoring, philanthropy, movement, fairness); CEO/Leadership Commitment (accountability for results, personal communications, visibility) and Supplier Diversity.

The data are entirely confidential and are kept on three secure, dedicated servers. Data are retained to allow for year-to-year comparisons. For more information on data security, see www.DiversityInc.com/data-security.

Here Are the Four Areas We Measure

Talent Pipeline: This area assesses the company’s ability to recruit people of all races, ethnicities, genders and ages. It includes:

  • Workforce Age (breakdown by race, ethnicity and gender)
  • Recruitment (with ratios of new hires vs. workforce demographics; new hires into top three levels of management vs. existing demographics of those levels; recruitment vs. involuntary turnover)
  • Diameter of Existing Talent (with ratios of demographics of top three levels vs. all managers; first promotions into management vs. all managers; promotions within management vs. all managers)
  • Structures (such as executive involvement in formal, cross-cultural mentoring; percentage of managers in mentoring; mentee/mentor demographics; percentage of CEO’s direct reports who are executive sponsors of resource groups; percentage of employees participating in resource groups)

Equitable Talent Development: This area assesses retain, engage and promote people from all demographics fairly. It includes:

  • Effective talent-development programs (such as employee resource groups used for mentoring, recruiting, marketing and diversity training; measurement of promotions, retention and engagement of resource-group members; and whether the diversity council establishes goals and metrics)
  • Movement (including ratios of first promotions into management vs. workforce demographics; promotions into and within management; percentages of managers promoted; promotions within top three levels)
  • Fairness (demonstrated by ratios of management promotions vs. voluntary turnover and recruitment vs. involuntary turnover)

CEO/Upper-Management Commitment: This area measures the visible and accountable involvement of top leadership as well as representation at senior levels and on boards of directors. It includes:

  • Quality of Accountability (such as diversity goals being part of performance reviews; executive compensation being linked to diversity metrics, including supplier diversity; whether top executives have senior-advisory positions at ethnic, LGBT and disability nonprofits; percentage of revenue spent on philanthropy; percentage of philanthropy spent on ethnic, LGBT or disability nonprofits)
  • Executive Involvement (such as diversity goals being part of performance reviews; executive compensation being linked to diversity metrics, including supplier diversity; whether top executives have senior-advisory positions at ethnic, LGBT and disability nonprofits; percentage of revenue spent on philanthropy; percentage of philanthropy spent on ethnic, LGBT or disability nonprofits)
  • Representation (includes demographics of top three levels, board of directors and executive diversity council)

Supplier Diversity: This section assesses the effectiveness of supplier development. It includes:

  • Quality of Program (such as procurement-management compensation tied to supplier-diversity results; supplier diversity included in requests for proposals [RFPs] and vendor contracts—includes Tier I [direct contractor] percentages with suppliers owned by people from underrepresented groups)
  • Developing Suppliers (such as Tier II [subcontractor] percentage with suppliers owned by people from underrepresented groups; training, mentoring and incentives for suppliers; providing financial education and assistance to suppliers)
  • Effective Strategies (such as presenting results to board of directors; auditing supplier-diversity numbers; working with corporate communications; sponsoring scholarships or education; and working with supplier-diversity organizations)

How to Apply, Free Report Card and Reporting Period

Click here to participate in the 2015 survey. You may use any one-year reporting period ending after June as the basis for your data submission. This means you may fill in your survey well before the end of the previous year. There is no fee to enter. Every company that fills out the survey receives a free report card assessing performance overall and in those four areas measured.

The survey is accompanied by FAQs that answer common concerns about each question, but our staff is also available to help with questions about technical issues and the meaning/intent of the questions. Please contact top50@DiversityInc.com for staff assistance.

The same application is used to determine placement on the 13 other lists, which can be viewed at www.DiversityInc.com/top50.

DiversityInc also annually recognizes companies with Special Awards that go beyond the empirical data and show substantive ways they connect diversity management to business results. The 2013 winners were honored at our October event. For previous Special Award winners, click here.

For more DiversityInc Top 50 reading, see:

What Drove Novartis to Become No. 1

4 Case Studies: Why Companies Rise & Fall in the DiversityInc Top 50

41 DiversityInc Top 50 Companies Score a 100 in HRC’s Corporate Equality Index