Pay equity, diversity and inclusion
HR.com Report Finds Employers Have Room to Improve on DEI Initiatives
HR.com recently issued a report on a survey they ran regarding employers’ outlook towards Diversity, Equity, and Inclusion (DEI) initiatives for 2021.
The report, The Future of Diversity, Equity and Inclusion 2021, includes survey data collected between December 2020 and January 2021 from 374 HR professionals across the world, with the majority residing in North America, specifically the U.S. Over 66% of the individuals surveyed were part of organizations with over 1,000 employees.
The report prefaces that DEI initiatives are defined as those “relating to the presence of underrepresented groups, (e.g., in terms of ethnicity, gender, sexual orientation, and disability) in organizations, how valued and welcomed underrepresented groups feel in those organizations, and the degree to which these groups enjoy equal opportunities, including but not limited to equitable pay.” Below we have highlighted some of the key findings identified in the report and provide commentary on the role they play in the big picture of DEI efforts.
Employers Are in Early Stages of Developing DEI Initiatives
The survey asked respondents to rate their organization’s pay equity, diversity, and inclusion efforts in terms of maturity, and here’s what respondents had to say:
- Undeveloped (10%)
- Beginning (21%)
- Intermediate (28%)
- Advanced (30%)
- Expert (11%)
The survey report found that 41% of respondents say that their company’s DEI efforts have reached expert or advanced stages. The remaining 59% of respondents believe their organization is executing undeveloped to intermediate level DEI initiatives.
As for the reason why businesses struggle to incorporate diversity, equity, and inclusion into the workplace, the report says that “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.”
Pay Equity as a Focus is Coming up Short
Only 16% of respondents say “equitable pay is a top priority among executives,” and 20% say “that equitable pay is not currently an organization priority at all.” On both ends of the spectrum, those figures speak volumes about why DEI initiatives are lacking.
When asked the question “What drives the goal of providing equitable pay within your organization?” 46% of respondents say it is to recruit and retain talent. Only 39% say “it is to ensure compliance with legal/regulatory considerations or requirements.”
While equitable pay as a top DEI priority was fairly low, it may be due to a lack of funding available for allocating towards the systemic issue. Only 33% of respondents say their organization “has a formal budget that is allocated to closing pay gaps.”
It will be interesting to see over time how the organizational perception on pay equity will shift now that the Biden administration has taken office and states are continuing to enact legislation requiring equal pay compliance and pay data reporting.
Organizations Lack the Right Tools to be Successful with DEI Initiatives
The survey report found that 50% of organizations “rely on basic compliance-oriented workforce demographic metrics.” The report adds that “relatively few organizations collect metrics that could potentially require actions based on the findings, such as measuring diversity in the leadership ranks (38%), diversity among teams (35%), and goals related to succession planning (28%).”
A reason that organizations are lacking in these areas can be attributed to the fact that they’re not equipped with the right tools to successfully achieve their DEI goals.
To effectively meet DEI initiatives, organizations need to leverage technology. With the right data and analytics software, businesses can measure and track progress, analyze employee data, and uncover existing policies that may be creating biases and discrimination in the workplace. Best practices suggest incorporating a platform that tracks monthly progress towards DEI efforts so that your business can refine goals and ensure they align with the Sustainability Accounting Standards Board (SASB), Integrated Reporting (IR), and Global Reporting Initiative (GRI) frameworks.
Businesses Need to Improve Workforce Diversity
Most respondents say that their workforce is more diverse now than it was two years ago, however, they are not as diverse as the marketplace they work within and the issue worsens in smaller organizations.
“Just 29% of respondents at small companies agree or strongly agree that their workforce reflects the demographics of the marketplace, while more than half (57%) of mid-size companies and nearly two-thirds (64%) of large companies say the same.” The report defines smaller organizations as those that employ between 1 to 99 employees and large as those that employ more than 1,000.
Only 40% of survey respondents said their business offers DEI training to all of its employees, which means the majority of the workforce is not being kept up to date on the latest practices and policies, which leads to the last major finding.
Organizations Are Not Approaching DEI As a Company-Wide Initiative
Perhaps one of the most interesting takeaways from the survey report is that DEI initiatives fall predominantly on HR professionals, with 37% saying that “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.”
The survey report concludes that only 9% of respondents believe that everyone within the organization is responsible for DEI and that is a contributing factor to why companies are struggling.
Organizations need to approach DEI as an organization and employees from all departments have a part to play. While certain roles, such as HR, may play a more apparent role in helping an organization achieve its DEI goals, employees at every level can participate in fostering a more diverse, equitable, and inclusive work environment.
In short, the report finds that there isn’t one single barrier preventing employers from being successful with DEI, but many. In fact, the top reasons that prevent organizations from being successful in their DEI initiatives are “a lack of metrics to identify insufficient diversity, a lack of understanding of the potential benefits of DEI, and a failure to prioritize at top leadership levels.”
Employers have a long way to go on pay equity, diversity, and inclusion efforts and the status quo is not sufficient. From a social perspective, the movement for achieving pay equity is gaining momentum, and governments, investors, and litigators are making environmental, social, and governance (ESG) criteria, the larger umbrella of DEI, a focus.
Is your organization making DEI a priority? Do you have the right tools to execute DEI initiatives effectively? Are you constantly revisiting your DEI strategies to see where you can improve like you would any other business function? These are the questions employers need to ask themselves as they approach DEI, and just as importantly, be honest about answering, as the gap between efforts and expectations is growing.
If your organization is looking to establish a more rigorous DEI program, download our white paper, Designing a Successful Pay Equity Policy for Your Organization to see what steps you can take today to help build a more diverse, equitable, and inclusive workforce.
With pressure mounting for organizations to prove they foster diverse, equitable, and inclusive workforces, employers must commit to prioritizing workplace equity. Our research report, Creating a Culture of Diversity, Equity, and Inclusion, details how organizations can ensure their successful with their efforts. Download it now to learn more.