Over the past few years, there has been a growing emphasis on the significance of diversity, equity, and inclusion (DEI) in organizations’ efforts to foster a work environment that promotes equal opportunity and respects differences. According to Forbes, companies that raised the proportion of women in top-level positions by 10% experienced a corresponding 10% rise in their revenue.

Several organizations are embracing Talent Analytics to advance DEI initiatives, which employ data to assess and enhance workforce effectiveness and welfare. We will explore how Talent Analytics, also known as People Analytics, can support the development of DEI strategies and identify metrics to evaluate progress.

Leveraging People Analytics for Diversity, Equity, and Inclusion

Organizations are recognizing the importance of creating a diverse and inclusive work environment that is equitable for all employees, regardless of their race, gender, age, religion, or sexual orientation. However, creating such an environment requires more than just good intentions. Companies must be intentional about identifying and addressing any disparities that may exist in their workplace.

Identifying Diversity Gaps

Identifying diversity gaps is the first step towards creating a more diverse and inclusive workplace. To do this, companies need to collect and analyze data on various diversity metrics to understand the current state of their workforce.

For example, Dell Technologies recognizes the importance of closing the diversity gap to meet future talent demands and reflect the global customer base’s diverse perspectives. They consider diversity and inclusion as critical business imperatives that will enable them to empower their future workforce and contribute to solving societal issues. To achieve this, Dell has set a “moonshot” goal to have 50% of its global workforce and 40% of global leaders identifying as women and 25% of its US workforce and 15% of US leaders identifying as Black/African American and Hispanic/Latino minorities by 2030.

Microsoft recently reported progress in closing the diversity gap in their 2022 Diversity & Inclusion Report. Microsoft has achieved a significant milestone as women now make up more than 30% of their core workforce worldwide, with a representation of women increasing by at least 1.0 percentage points annually since 2018. Such progress is encouraging and highlights the importance of continuing to prioritize diversity and inclusion efforts in the workplace.

Identifying diversity gaps is a crucial step in developing a comprehensive DEI strategy, and People Analytics can play a vital role in this process. By analyzing employee demographics data, HR professionals can pinpoint where diversity is lacking across various areas of the organization and develop targeted strategies to address it.

For example, let’s say an organization wants to increase the representation of women in leadership positions. People Analytics can be used to analyze the gender distribution across different levels of the organization and identify areas where women are underrepresented. Based on this analysis, the organization can develop targeted strategies to increase the representation of women in leadership roles, such as implementing leadership development programs for women or reviewing and adjusting the organization’s promotion process to remove any barriers that may be hindering women’s advancement.

Similarly, People Analytics can be used to identify diversity gaps in the hiring process. By analyzing data related the gender, ethnicity, or age of job candidates and new hires, HR professionals can detect any disparities in the hiring process that may be contributing to a lack of diversity within the organization. This analysis can help the organization develop targeted strategies to attract a more diverse pool of candidates, such as sourcing from diverse talent pools or revamping the organization’s job descriptions to be more inclusive.

Measuring Pay Equity

Companies should analyze the pay of different demographic groups to identify any disparities. If certain groups are consistently paid less than others for similar work, it may indicate a lack of equity in the company’s compensation practices.

A recent Pew Research Center survey revealed that most workers quit their jobs in 2021 due to low pay (63%), no opportunities for advancement (63%), and feeling disrespected at work (57%).

According to Payscale, on average, women earn only 82 cents for every dollar earned by men. Even when men and women have similar employment characteristics and do similar jobs, women still earn 98 cents for every dollar earned by an equivalent man. This wage disparity amounts to a loss of $80,000 over a 40-year career for women.

Recently, the EU has agreed to implement new pay transparency regulations that will require companies with at least 250 employees to publish data on their employees’ pay, broken down by gender, on an annual basis. This move is aimed at closing the gender pay gap that still exists in many EU member states. According to a report by Eurostat, in 2020, the gender pay gap in the EU was 14.1%.

The new regulations will include sanctions for non-compliance and the creation of national contact points to help employees understand and use the data. Member states have two years to transpose the directive into national law. The EU has also been working on other initiatives to promote equal pay, such as policies to reconcile work and family life and to increase women’s participation in the labor market.

The new pay transparency regulations are expected to be a game-changer in promoting pay equity in the EU. By requiring companies to publish data on their employees’ pay, broken down by gender, on an annual basis, these regulations will help identify and close the pay gap that still exists in many industries. This move is expected to not only benefit women but also contribute to a fairer and more inclusive society. As a result, organizations will need to rely more heavily on People Analytics to measure and address pay equity in the workplace.

Using People Analytics to measure pay equity can help organizations identify any disparities in compensation and take steps to address them. For example, by analyzing data on employee salaries, job titles, and performance ratings, HR professionals can identify any instances where employees performing similar jobs are being paid differently based on their gender, race, or ethnicity. This can help the organization develop a plan to adjust compensation and ensure that all employees are paid fairly.

Analyzing Employee Engagement

One important way that People Analytics can support diversity, equity, and inclusion (DEI) strategies is by analyzing employee engagement. By measuring employee satisfaction, motivation, and well-being, organizations can identify areas where they can improve to create a more inclusive and supportive work environment for all employees.

Johnson & Johnson is an example of how People Analytics can empower HR teams to uncover valuable employee retention insights. The company initially hypothesized that employees with more experience were more likely to stay longer. However, after conducting research, they discovered that recent college graduates remained with the company much longer than their more experienced colleagues.

As a result of its focus on employee retention, Johnson & Johnson has achieved a high level of success in retaining quality employees, ranking in the top 15% of similarly sized companies. A significant portion of employees, 47%, reported that they would not leave the company even if offered a higher-paying job elsewhere, while 77% reported feeling excited to go to work each day. Overall, 70% of Johnson & Johnson’s employees feel that the company is doing what it should to retain them, while 30% may be considering new employment.

Given the difficulty in finding quality employees, the ability to retain them is critical for companies like Johnson & Johnson. Using People Analytics, the company has gained valuable insights into what drives employee retention and has developed strategies to support its DEI efforts.

People Analytics can be a valuable tool for organizations seeking to build more inclusive and diverse workforces. By identifying diversity metrics, measuring pay equity, and analyzing employee engagement organizations can create more equitable and diverse work environments.

EDLIGO Talent Analytics supports organizations in creating a more inclusive and diverse workforce. By utilizing the platform’s advanced analytics capabilities, organizations can gain valuable insights into their workforce and take action to improve diversity and equity.

EDLIGO helps organizations achieve their DEI goals by providing data-driven, unbiased insights into workforce diversity, employee career aspirations, and mobility opportunities and supporting the development of individual career paths and training recommendations.

Why ESG is important now and why does it matter to HR?

Environmental, social, and governance (ESG) issues are becoming more important for companies in today’s business environment. As consumers, investors and regulators become more aware of the social and environmental impacts of business, companies are under pressure to demonstrate their commitment to sustainability and social responsibility.

The emphasis on ESG factors is driven by the need for organizations to be more socially responsible and sustainable and has gained popularity in recent years as environmental and sustainability issues have received more attention on a global scale.

It takes excellent and flexible leadership to meet the current local and global ESG challenges. ESG considerations are becoming increasingly important. The European Commission has proposed the “Corporate Sustainability Due Diligence Directive” for companies to respect human rights and the environment in their global value chains.

The proposed regulations, known as the “due diligence” framework, would require companies to identify, prevent, and address human rights and environmental risks in their global value chains.

The proposed legislation would require companies to:

• Conduct human rights and environmental due diligence in their global value chains.
• Identify and assess the risks of human rights and environmental abuses in their value chains.
• Implement measures to prevent or mitigate those risks.
• Report publicly on their due diligence activities and progress.

The proposed regulations would also establish a monitoring and enforcement mechanism to ensure compliance with the framework. Companies that do not comply with the requirements could face fines and other penalties.

The role of HR in ESG

A key role is played by HR. Will professionals be prepared to provide quantifiable evidence when the CEO comes knocking on HR’s door asking about ESG-related employee issues like diversity, equality, and inclusion (DE&I), gender pay equity, upskilling and employee development, and workplace culture?

HR plays a critical role in ensuring that a company’s ESG efforts are integrated into its culture and operations and that employees are aware of and engaged in these efforts.

According to Forbes, ethnically diverse companies are 35% more likely to outperform, while companies that are gender diverse are 15% more likely to outperform.

ESG is expected to continue to shape HR in 2023 and beyond as more companies prioritize sustainability and social responsibility in their operations and decision-making. This will likely lead to changes in HR policies and practices such as:

• Identifying areas where the company can improve its diversity, equity, and inclusion efforts, which can be used to guide recruitment and hiring strategies.
• Measuring the engagement and motivation of employees, which can be used to support retention and development strategies.
• Assessing the environmental impact of the company’s operations and identifying opportunities for reduction, which can be used to shape employee development and mobility strategies.

•  Identifying the company’s reputation and attractiveness to job candidates, which can be used to improve recruitment and branding strategies.

Starting Points for HR Leaders

The development and implementation of an organization’s ESG initiatives can and should be a key responsibility of HR leaders and their teams. To accomplish this, a strong, inclusive culture that fosters a sense of belonging among all employees is needed.

What should be the starting point for the organizations’ HR departments to begin the ESG journey?

• Work with the executive leadership, risk, and investor relations teams to understand what ESG standards and criteria the organization is following and how professionals can support those efforts.
• Analyze workforce data to provide a report on the organization’s efforts to hire and manage a diverse, skilled workforce from around the world. Utilize this data to monitor and assess human resources-related performance indicators for the company.
• Publish an inventory of the efforts to build a diverse and engaged workforce for the benefit of all parties.

According to Forbes, 47% of investors considered the “S” aspect of ESG the most important when making decisions, overtaking “E” at 35%.

Putting the “S” in ESG, HR contributes to the development of an environment where current and potential employees want to work, collaborate, and advance the company.

Including ESG in the longer-term strategy

According to Gartner, 83% of business leaders say their sustainability program activities directly created both short- and long-term value for their organization.

ESG plays a significant role in fostering and sustaining a strong sense of fulfillment and providing purposeful work. A real competitive advantage over rivals who might be prone to greenwashing their public-facing information or ignoring ESG entirely can be gained by adopting and implementing ESG goals in a transparent way.

Incorporating ESG considerations into a company’s long-term strategy can help to ensure that the company is sustainable and responsible in its operations and growth. By considering the impact of their activities on the environment, society, and corporate governance, companies can mitigate risks and create growth opportunities, while also addressing the concerns and expectations of stakeholders. This can include implementing sustainable practices and policies, promoting diversity and inclusion, and being transparent about the company’s actions and impact.

ESG is an important consideration for companies now more than ever, and HR plays a critical role in supporting these efforts and creating a sustainable and responsible workforce. Companies can better understand how their ESG efforts impact their workforce and use this information to inform their talent strategy and workforce planning. This helps companies to attract and retain top talent, and to create a more responsible and sustainable company culture.

EDLIGO Talent Analytics can support HR departments with a constant flow of data to predict and measure the impact of key strategic decisions and determine the future readiness of the organization, supporting HR departments in their strategic role as a foundation for sustainability.  EDLIGO helps organizations achieve their sustainability goals by providing data-driven, unbiased insights into workforce diversity, employee career aspirations, and mobility opportunities, and supporting the development of individual career paths and training opportunities.

Schedule a Demo to know more.