Monetizing Diversity Efforts: How Inclusion Can Be Quantified
Understanding the cost of bad diversity management.
Although diversity and inclusion is valued far more within corporations than it was in 1998 when we first launched DiversityInc.com, diversity management in many companies does not command the kind of business credibility that it could.
If you can monetize the benefits of what diversity and inclusion brings to the organization, you'll see that change.
For example, say your firm has 75,000 employees, 50 percent of whom are women and/or non-white people, and a 3 percent average turnover rate but a 3.6 percent turnover rate for women and/or non-white people. If it costs $10,000 to replace an employee, then closing that turnover gap will save $2,250,000.
What hasn't been possible—until now—is to strongly connect the results of diversity management and inclusion to areas we can measure, such as turnover or failure for some groups to thrive equally in talent development.
I think the key is "engagement," which is a measurement of a person's feeling of inclusion in an organization and which drives the quality of overall human-capital output. Further, engagement can go beyond human-capital factors to business subjects on a range as wide as accidents on factory floors to quality of innovation.
We've invested in SAS software this year and now have the computing power to correlate our engagement survey to our benchmarking survey, which allows us to then make exacting, precise recommendations for best practices going forward. Our engagement survey carefully introduces questions about race, orientation, age and gender to avoid decreased performance, as described by Dr. Claude Steele as "stereotype threat." This is especially important for majority inclusion and for companies that may not enjoy a great diversity reputation internally.
Moreover, using our shortened 50-field Benchmarking survey, we can benchmark several divisions within your company and give each an individual assessment on their relationships with people, as well as individual suggested next steps for diversity-management implementation. This can tie back to accountability for results to the local leader and give that person the exact tools they need to close gaps and move everyone forward in their engagement and feeling of inclusion.
DiversityInc is unique in its ability to do this; we have data on diversity management and outcome from hundreds of companies, and with our computing abilities, we can make specific suggestions tied to actual performance as correlated to other companies. We can project your potential return and we can help you put an actual dollar value on what success will look like.
Take these scenarios, for example:
- Your women employees are disengaged to the point of filing a lawsuit, which can mean a loss of real money and damage to the company's reputation. Our engagement survey will identify that problem and the benchmarking survey will provide correlations to the best-practice solutions other companies have used.
- After investing heavily in recruiting and training Black, Latino and Asian execs, the percentage of retention among these groups remains low. Our engagement survey will uncover the cause and degree of their disengagement, and the benchmarking survey will show you what proven best practices and goals will stop that regrettable loss.
When the benefits of diversity management can specifically be tied back to bottom-line benefits, in the absence of emotion and in the sunlight of comparisons with other companies' accomplishments, the benefits of a strong diversity-and-inclusion program become quite clear—and it can be monetized. I've staffed up on our consulting practice, and we are ready to put a detailed analysis together for you. Please contact me directly for more information.
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Clearly communicated policies and values build corporate diversity success — treating people right is not an option for a well-run company.