December 7th, 2021
To successfully measure the results of corporate diversity work, it starts by reflecting first on internal data — like representation in leadership — and builds into solving for larger systemic issues like wage and mobility gaps.
Whether the focus of the DE&I team is on talent attraction, inclusion, profitability, or all of the above, the data shows that a more diverse and inclusive workforce is beneficial to everyone involved — the organization as a whole, individual employees, and surrounding communities.
7 major components of the ROI of DE&I
This is in no means an exhaustive list of ROI metrics by which you can measure the effectiveness of your DE&I initiatives, but it’s a good start.
1. Employee experience
Workplace inclusion and belonging has critical implications for employee experience. High belonging is linked to a 56% increase in job performance, 75% reduction in sick days, and 50% drop in turnover risk.
2. Employee retention
Increased representation of diversity at senior levels boosts retention for employees of color. Black men who had senior leaders of color were 15% more likely to stay with their company than those who did not.
3. Talent attraction
Employees see inclusion as a prime factor while considering employment. Nearly 40% of employees said they would leave their current organization for a more inclusive environment, and 80% said that inclusion was important when choosing an employer. Guild survey data shows that 24% of applicants at a major hospitality brand cited education and skilling as a reason for applying for employment.
Organizations with an inclusive culture are 3x as likely to be high performing and 8x more likely to achieve better business outcomes.
Companies in the top quartile of ethnic and cultural diversity on executive teams outperformed those in the fourth quartile by 36% in profitability.
6. Economic mobility
Employees using employer education benefits achieved 43% more incremental wage gains than non-participants. In fact, the incremental wage gains were largest for the lowest paid employees: Employees earning $30,000 a year achieved a 57% increase. Black associates, at a leading big box retail company, are 2.1x more likely to be promoted when participating in Guild’s education programs.
Companies that are more gender and racially diverse outperform their peers in innovation, effectiveness, and see improved financial performance.
Are your DE&I initiatives yielding these results?
Although there is not yet much in the way of long-term research, the numbers we have indicate that an increase in DE&I not only provides a myriad of positive business outcomes, but also improves corporate culture, individual mobility, and surrounding communities benefit.
In the next few years, we expect an increased focus on data collection as it relates to equity and diversity. Meaningful data can include diversity objectives, representation in senior management and senior-level roles, and mobility for underserved populations.