DiversityInc Top 50 Methodology
The DiversityInc Top 50 is a metrics-driven evaluation based on the data each company submits in the online survey. Any for-profit or not-for-profit organization with more than 1,000 employees may participate. There is no cost to enter and no requirement to do business with us; in fact, a few companies who made the list do no business with us.
The survey has 300 total fields of data covering four areas of diversity-and-inclusion management: CEO Commitment, Human Capital, Supplier Diversity, and Internal & External Communications. The process is sophisticated and very secure: The evaluation and ranking is done using SAS software, and our data-handling process has been vetted by several companies.
We consider all four areas to be equally important. Although there are more fields in Human Capital than any other section, our programming equally rewards competitive performance across all four areas. In other words, excelling in Supplier Diversity will not overcome poor Human Capital results.
Because we have such a large database of competitors, we are able to determine what constitutes top performance from the results themselves. We take a percentage of standard deviation to determine “Top 50” performance. We weight questions—and combinations of questions—to award points, and the points are rolled up in each of the four areas. There are points awarded for some evaluations that are based across two or more of the four areas. This is how we correlate best practices to results (for example, mentoring to promotions).
How we weight questions and which correlation comparisons we make are done through our software and are not publicly disclosed. Our weighting and emphasis has evolved based on what we’ve observed over the 13 years we’ve been producing this competition.
Here is a brief explanation of each of the four areas we measure:
CEO Commitment: How the CEO leads and implements diversity-and-inclusion management. Although this is 25 percent of the total score, we have observed that it is the most critical factor in achieving overall diversity-management success.
We assess the CEO’s presence internally and externally as a visible proponent of diversity and inclusion. Factors include a presence on the corporate website from the CEO linking diversity management to business goals; integration of diversity and inclusion in the corporate mission statement; regular meetings with leaders of resource groups; and the CEO taking on a leadership position with a multicultural nonprofit. We have expanded the criteria to also assess the visible diversity-and-inclusion support from the next two levels of management.
Leadership’s ability to drive diversity-management best practices throughout the organization and hold executives accountable for results are measured through factors including compensation tied to diversity-and-inclusion metrics; using an executive diversity council to set and evaluate corporate-diversity goals; and the use of diversity and inclusion in succession planning.
Demographics of the top three levels of the company as well as the board of directors also are evaluated in this section. Our data show a correlation between senior-executive participation in mentoring and promotion and employee engagement rates so a series of questions on mentoring and executive involvement are weighted into the evaluation.
Human Capital: This section has the most number of questions as workforce diversity as well as management demographics are evaluated. The emphasis is on ratios that show significant progress in creating a more diverse workplace. Among the critical ratios our SAS software measures are overall workforce diversity compared with the demographics of new hires; workforce diversity compared with first promotions into management; and management demographics compared with promotions within management.
Measurable demographics include race/ethnicity, gender and age. A series of questions on orientation and disability also assess whether the company is using diversity-management best practices to create an inclusive workplace. Questions include best practices on recruitment, benefits, flexible work arrangements and retention.
Supplier Diversity: The importance of supplier diversity is emphasized in its accounting for 25 percent of the survey points. Supplier diversity’s value lies in the ability of diverse vendors to create innovative solutions to business challenges and as a critical component in building community support. Those two factors are assessed through questions ascertaining the percentage of Tier 1 (prime) and Tier II (subcontractor) business awarded to certified Minority-Owned Business Enterprises (MBEs), Women-Owned Business Enterprises (WBEs) as well as vendors owned by LGBT people, people with disabilities and veterans, as well as community-building best practices including mentoring suppliers, providing financial assistance and education, and supplier-diversity presence on the website.
Methods of holding executives accountable for supplier-diversity results, including compensation, are included as well as metrics to evaluate progress and to ensure that ethical and accurate numbers are reported.
Internal & External Communications: The evolving diversity-management best practices that contribute to sustainable business growth are measured in this section. Internal diversity-and-inclusion initiatives such as resource groups and formal mentoring are analyzed from a variety of perspectives, including participation rates, availability across the organization and metrics to assess contributions to employee engagement and promotion rates.
External diversity-and-inclusion initiatives measured include philanthropic contributions to multicultural charities and a series of website criteria evaluating visible commitment.
How to Apply, Free Report Card and Reporting Period
The surveys are due by March 1; however, you may pick any one-year reporting period ending after June. 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. We also offer these tips on how to do well in this year’s survey.
The same application is used to determine placement on the 13 other lists, which can be viewed at www.DiversityInc.com/top50. In 2013, we will also have The DiversityInc Top 10 Companies for Veterans.
DiversityInc also annually recognizes eight companies with special awards that go beyond the empirical data and show substantive ways they connect diversity management to business results. Here is a list of those awards for 2012. For previous award winners, click here.
For more DiversityInc Top 50 reading, see:
Top 3 Reasons to Participate in the DiversityInc Top 50
Diversity-Management Case Studies Reveal Why Companies Rise & Fall in the DiversityInc Top 50
CEI Index: Twice as Many Top 50 Companies Have 100% Ratings Vs. Fortune 500
CEO Commitment
8 CEOs Whose Inclusive Styles Change Corporate Cultures
Where’s the Diversity in Fortune 500 CEOs?
Human Capital
What HR Really Needs to Succeed
Diversity Web Seminar: Talent Development
Supplier Diversity
How WBENC Helps Companies & Women-Owned Businesses
Should You Track Suppliers Owned by LGBT People or People With Disabilities?
Supplier Diversity: How Can You Make the Business Case?
Internal & External Communications
Diversity Management Done Right: 5 Best Practices to Achieve Measurable Success
