The Future of Diversity, Equity & Inclusion 2022

Most of today’s organizations lack mature and effective DEI programs, according to our study. The organizations that do have successful DEI programs, though, tend to share a range of characteristics and practices. In short, to do DEI well, these organizations comprehensively define and work at it.

To better understand why so many organizations struggle as well as how the best ones succeed, we investigated the following areas:

• the DEI landscape, including program maturity levels and equitable pay

• the extent to which key DEI initiatives are developed and their perceived level of effectiveness

• how much time organizations spend on DEI initiatives and the extent to which they are funded and supported

• how employers’ use of training, incentives, communication practices, and metrics relate to DEI

• the practices that seem most closely associated with DEI success

In the survey on which this study is based, we defined DEI initiatives as those “relating to the presence of underrepresented groups (e.g., in terms of ethnicity, gender, sexual orientation, disability and more) in organizations, how valued and welcome underrepresented groups feel in those organizations, and the degree to which these groups enjoy equal opportunities, including but not limited to equitable pay.”

Below are some key findings from the study:

1. Companies struggle to fully mature their DEI programs.

• Only about two-fifths (22%) indicate that DEI initiatives in organizations have reached the “expert” or "advanced” stages.

• Only 9% rate their organization's DEI initiatives as highly effective (that is, an 8, 9 or 10 on a 10 point scale).

• Although most organizations are having trouble effectively managing DEI, more than 44% say that DEI plays a role in strategic planning, and another 32% integrate their DEI frameworks into the business strategy.

2. While nearly half agree or strongly agree that pay is equitable in their organization, there is much room for improvement.

• Just 9% say equitable pay is a top priority among executives, and 28% say that equitable pay is not currently an organizational priority at all.

• Only 30% say they are actively investing in understanding the pay equity gap in their business to a high or very high degree.

• The most common tools to measure pay gaps and pay equity are comparisons of pay among comparable jobs (55%) and comparisons within pay bands (41%). Fourteen percent say they don’t measure pay or pay equity at all.

3. Most companies fall short in the areas of metrics and training.

• Among those that use metrics to measure the current state of DEI in their organizations, most rely on basic compliance-oriented workforce data (56%), while fewer evaluate diversity within the leadership ranks (42%), recruiting outcomes (38%), diversity goals related to succession planning (23%), and equal job titles (20%).

• Only two-fifths offer DEI-related learning and development to all employees (40%).

• Among those that do offer training, the most common DEI-related training program is unconscious bias training (69%).

• Fewer offer specific trainings in the areas of:

• - inclusion awareness training (55%)

• - difficult conversations training (48%)

• - inclusive recruitment policies training (42%)

• - performance management training (37%)

• - conflict resolution training (33%)

4. Although progress has been made in cultivating a more diverse workforce, many companies still have a long way to go.

• Forty-eight percent agree or strongly agree their workforce is more diverse than it was two years ago.

• Somewhat fewer say their workforce reflects the demographics of today’s marketplace (45%).

• More than half (57%) say ethnic/racial minorities make up no more than one-fifth of their organizations’ leaders, and 20% say the same about women.

5. Companies are often not considering benefit programs that appeal to a diverse workforce, leaving considerable room for improvement.

• Only 29% ensure benefit providers reflect the diversity of the workforce.

• While nearly three-fifths offer flexible work options (70%), fewer offer paid parental leave (58%), benefits for domestic partners (43%) and professional part-time roles (34%).

• In fact, 18% say they only provide benefits mandated by country, state and local laws.

6. Organizations that perform better in the area of DEI practices are more likely than others to:

• have support from the top to close pay gaps and an associated budget for it

• include a wide range of characteristics in their definition of DEI

• integrate DEI strategic frameworks into their business strategies

• make DEI quite visible to the workforce

• emphasize DEI in succession planning and talent acquisition processes

• use more advanced metrics, set more goals related to DEI, and use more incentives to encourage DEI

• provide training for pay equity, communication practices, antiracism, inclusion awareness and inclusive recruitment policies

• have programs to improve diversity in the leadership ranks

• offer more inclusive and family-friendly benefits

Key Takeaways

Given the research findings in this report, below are some key suggestions for how organizations might become more successful in fostering a culture of DEI.

1. Consider the talent management landscape and how your organization collectively thinks about DEI. Social injustices and Covid-19 have had a dramatic impact on the environments today’s employees want and need to be productive. Have women and minorities recently left your organization due to current events? Many organizations today focus their DEI efforts on compliance and avoiding legal concerns. To what extent have you considered DEI as a component of talent management and employee experience? Can DEI be used to enhance organizational performance, engagement, and innovation?

2. Determine where the organization is in regard to DEI. As a first step, for example, you could evaluate employment market demographics, employee engagement/satisfaction surveys, compensation data, and hold small focus groups. Identify the areas in the organization where DEI programs are necessary to build morale, improve innovation or support government regulations. Use key learnings to create a business case and refine your organization’s definition of DEI. Identify when managers, HR and employees have similar or different views about the characteristics and traits that should encompass a diverse workforce.

3. Get support from C-level executives and develop a DEI plan to engage all managers. Consider what you may need to engage senior leaders, middle managers and first-time managers, and be sure to convey those needs to C-level leaders and possibly the board of directors to garner their direct support. Create an overarching strategy with clear goals and objectives. Then work with leaders to identify and prioritize phases of DEI improvement. What are the quick wins to improve DEI? Think about creating a communication strategy for the CEO to communicate these phases of improvement with the whole organization.

4. Design a variety of training programs to expand reach, reinforce cultural values and minimize lawsuits. Think about incorporating more than compliance-focused material. Consider the never discussed DEI training more often used by high performers, such as pay equity awareness, anti-racism, inclusion awareness, conflict resolution, performance management and recruitment management. Keep in mind that one size will not fit all. You may want to keep some training optional and/or private and some of it mandatory. Think about methods and technologies and creating an open, fun dialogue about discussing these issues. Will employees be more engaged working on an individual training worksheet, listening to videos or being hands-on in group settings?

5. Evaluate recruiting processes for women and minorities and improve leadership initiatives/succession plan. As discussed throughout this report, racial and ethical minority leaders continue to be underrepresented in the workforce. Review hiring and promotion processes. Does your recruiting process incorporate techniques to minimize conscious and unconscious biases? Also, women and minorities may fail to become leaders because they lack equal opportunities to the right projects and training. Consider holding events, creating ERGs, forming formal mentorship programs, and providing leadership training to give minorities and others the right opportunities.

6. Take a good look at how your organization’s pay, performance, benefits, succession and reward systems support DEI. Are performance management processes objective? Does the system do a good job of reflecting actual performance, or is it more of an obligatory ritual? How do succession plans consider diversity of talent? If pay is linked to performance evaluations, how much should tenure, education and salary history matter relative to work experience certification and skills? Consider tracking performance measures as much as bonuses, pay bands and comparable jobs. Consider using regressions to look for pay inequities. Are time-to-hire goals and benefit plans realistic and equitable? Don’t forget to consider rewards. For example, to what extent do leaders encourage and reward competitiveness, diversity of thought, teamwork and collaboration?

7. Consider the dominant leadership style of the organization and help employees navigate through changes. Some executives and employees are accustomed to top-down leadership styles. DEI often values behaviors of openness and collaboration. Is there a conflict between styles and, if so, how can it be resolved? When appropriate, help leaders to incorporate a style that is supportive of DEI.

8. Seek opportunities that encourage diversity of thought and support a hybrid and flexible working environment. Consider bringing together employees with different backgrounds to work on a fun and challenging project where diverse viewpoints matter. For example, create or test a new product by inviting different job levels, roles, departments and regions to a product development meeting. Given so many companies have created hybrid workforces in response to the pandemic and employee preferences, it's essential to bring them together in a way that is flexible. Consider venues and whether work will be completed online, in-person or optional for special projects as well as regular work.

9. Decide how your organization should approach DEI metrics. Should there be a point person or team that decides how to track and collect key DEI metrics over time? Which DEI data points does your organization need to track? When will you need to survey employee populations? Identify who will be responsible for collecting data and regularly sharing it. Should they regularly meet with leaders to show them progress and areas of improvement?

10. Consider DEI incentives. The organization may want to find ways to recognize leaders for DEI progress. There are various options. For example, your organization might consider tangible non-quota performance-related criteria such as ranking a manager based on their ability to give men and women access to similar career-changing projects or networking opportunities. Of course, run programs by legal counsel.

11. Stay up-to-date on global regulations, policies and procedures. There are a host of new policies and regulations across the various countries, states and regions. Consider who will track pertinent regulations and adjust internal policies and procedures. When does it make sense to change internal company policy in anticipation of governments mandating legislation down the road?

12. Reinforce DEI messages and provide ongoing support with the right tools. Look for DEI success stories. For example, the organization could share a story about how a diverse team of workers designed a new customer service plan or product innovation. The company could feature the story in the employee newsletter, videos, annual report or the DEI section of the organization’s website. Show employees and potential customers that your workforce is representative of multiple races, genders, backgrounds, views and abilities.

13. Regularly review corporate culture and take a pulse of your organization in regard to DEI/ pay equity. Consider how your organization wants to continually be proactive about DEI in the future. For example, maybe you want to compare salaries across departments and comparable jobs annually. Consider in advance the ways in which your organization could react to potential pay inequities and discrepancies that you find. Coordinate with the executive team so everyone is on the same page. If there is no formal budget for such an endeavor, consider making a case for it. Also look at turnover and engagement on a regular basis.