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.