ROI on diversity lacking: Survey

Only one-fifth of employers using diversity scorecard
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 05/27/2013

While many employers have embraced diversity and inclusion, just one-fifth (18.8 per cent) are measuring the impact, efficacy or return on investment (ROI) of these initiatives, according to a survey by the Canadian Institute of Diversity and Inclusion (CIDI).

And yet four-fifths (79.6 per cent) of the 56 employers surveyed said diversity, inclusion, human rights and equity are strategic initiatives at their organization.

“I look at that and I say, ‘If it’s a strategic priority, why aren’t we measuring it?’” said Michael Bach, founder and CEO of Toronto-based CIDI, adding there are a few reasons for the discrepancy, such as not knowing what to measure.

“What things should we be counting, what things can we count? A lot of organizations may not have the infrastructure to measure, so they may not have the systems in place that will allow them to do these measurements in a sustainable and low-impact way.”

People can also feel overwhelmed, he said.

“We are managing competing priorities. It’s not like diversity is the only thing on the agenda — you’ve got a thousand other priorities to manage,” said Bach. “We are very measure-happy — rightly so, it’s important — but it’s definitely a challenge.”

There’s also the issue of follow-through, as people may discover an issue such as under-representation and be obliged to figure out how to address it, he said. And then there’s “diversity fatigue,” which is definitely setting in, said Bach.

HR works on so many issues and if there is no HR system to download the information, it can be a nightmare, said Sema Burney, president of diversity consulting firm Burney Consulting in Lachine, Que.

“The biggest challenge is really in terms of resources, in terms of the time it takes to collect this information and what type of HR system you have,” she said. “The other issue is it’s very difficult to calculate, so a lot of times they get bogged down with details and get scared of that whole issue.”

And since some employers know diversity makes good business sense, they don’t feel the need to measure the ROI, said Burney.

“They haven’t sat there and quantified why. They just know ‘Yes, studies show it’s important,’ and they can see with their own workforce what the value is, but they haven’t sat down to actually calculate it,” she said. “Most at the upper level understand the importance just because of the changing economy, globalization and the demand from customers to have more diversity.”

Linking to business strategy

Employers have to take a strategic view, said Bach.

“You need to look at diversity as a core part of your business, whether it’s attracting or retaining the best talent, attracting new clients or customers, maintaining your brand in the market — whatever the case, you need to be measuring it,” he said.

“The problem I have with the kind of social justice, ‘It’s the right thing to do’ mentality, while great, admirable, is it doesn’t connect to the bottom or top lines of an organization.”

Diversity and inclusion should be layered on top of business priorities, whether that means breaking into new communities, leveraging people in the market, promotion rates or improving retention, said Bach.

The Calgary Police Service, which participated in the CIDI report What Gets Measured Gets Done: Measuring the Return on Investment of Diversity and Inclusion, is focused on improving its outreach and corporate culture when it comes to diversity and the community, said Sgt. Bill Dodd of the diversity resource team.

But if it is going to move forward, measurement is needed.

“The organization has to make a decision that to know this kind of information is important, to know where we are, to know where we want to go and what our goals are going to be,” he said. “The organization has to make that commitment… and I don’t think we’re quite there yet.”

It’s good to have these initiatives or business practices, but you need to know if they are effective and whether adjustments are needed, said Dodd.

“Everybody talks about how it’s important, but are you really moving forward? And unless you measure it, how do you know?”

Popular measurement methods

Among the respondents that are measuring impact, efficacy or ROI, the most popular method is the representation of under-represented groups in senior leadership or board positions (88.9 per cent), while the second most popular ones include participation rates in diversity and inclusion, and human rights and equity programs; cultural competence or inclusiveness; employee engagement survey responses in relation to inclusiveness; and program efficacy (each done by 66.7 per cent of respondents). Those are followed by program costs (55.6 per cent) and return on investment (33.3 per cent).

Telus has measurements in place, such as levels of engagement, said Fiona Easton, HR manager, diversity and inclusiveness, at Telus in Vancouver, which also participated in the CIDI report.

“It’s the inclusion that we’re focusing on and being the employer of choice for all, so we have a strategy that’s driving that.”

Every employer can benefit from understanding its team members better, she said.

“The more your organization represents the communities and the customers you serve, the more success you find as an organization. When you’re able to utilize the individual strengths within the organization, it drives that engagement, and when you have an amazing culture, you can’t help but have an amazing level of customer service — it just sort of feeds organically.”

Scorecards missing

Only 12.5 per cent of the survey respondents indicated their organization has a diversity scorecard. But all of those that use one said it raised the profile of their diversity initiatives and had become part of their strategic reporting, said the CIDI report.

It comes back to the labour involved, the tools needed and who is going to look at the scorecard, said Bach.

“It is a matter of just making sure that it has a resulted action based on what the results are, based on what you see,” he said. “The scorecard doesn’t have to be huge or elaborate, and you can use data that you’re already tracking — so your hiring, your voluntary and involuntary turnover, your rates — just start there and then split it out by gender because everyone collects gender.”

By putting a spotlight on the issue and finding the gaps, hopefully organizations will be inspired to go deeper and start asking more questions, said Bach.

One-half (52.9 per cent) of the respondents had conducted some form of employee census or asked employees to self-identify by personal characteristics, said the report. But since one-third are legally required to collect and report on demographics under employment equity regulations, that suggests only one-fifth are collecting this information voluntarily.

Employers that conduct some form of employee census can find it difficult because it’s voluntary and there are stigma attached, said Burney, such as an employee concerned about revealing a disability.

“The reality is it’s all confidential but it’s the communication that goes with that kind of reporting that’s really important. A lot of times, you have the statistics but they’re not necessarily accurate if people are not identifying themselves. That comes with a whole bunch of different issues, so that makes a lot of employers hesitant to even start that process.”

There’s also a “Canadianism” aspect to it, said Bach, with people questioning why this data is needed.

“My response to that is if you have a diversity strategy and you’re spending money on a particular community but can’t tell me how many people within your own organization identify with that community, how do you know the value of what you’re spending is worth it?”

Add Comment

  • *
  • *
  • *
  • *