Let's Talk About Diversity, Equity, and Inclusion (DEI) ROI - Part 1

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Wanting to feel included, being part of a community is part of what makes us human. We want to connect with our friends, family; inclusion is fundamental to our sense of happiness and well-being. Our interests, motivation, health, and happiness are inextricably tied to the feeling that we belong to a greater community that may share common interests and aspirations. Organizations realize that a culture of inclusion has a positive impact on their business and considerable bearing on the bottom line. So, why are so many companies hesitant to make significant investments in DEI programs? One of the reasons, is they have difficulty measuring the return on investment (ROI).  

Many companies struggle with effectively measuring the results of DEI initiatives. In part, the challenge begins with determining what measures will yield the most useful information. For others, this task is difficult because they do not collect the necessary data required to measure diversity and inclusion. DEI programs, for example, are often considered to have “intangible” results, such as improved communication or improved teamwork, yet such improvements may have a significant impact on productivity, growth, and profits.

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Data collection is key to effective DEI measurements. Examples of meaningful data are:

  • Level of participation in the firm’s diversity and inclusion vision formulation.
  • Number of underrepresented employees informal mentoring programs who get promoted.
  • The ROI of Diversity and Inclusion
  • Percentage of diversity objectives aligned with key strategic business objectives that are tied to bonus and compensation systems.
  • Representation on the board of directors.
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Overall organizational climate and culture ratings and their effects on all represented groups. By following five basic steps, monetary values for intangible results can be established:

  1. Identify a unit of measure that represents a unit of improvement.
  2. Determine the value of each unit.
  3. Calculate the change in performance data.
  4. Determine an annual amount for the change.
  5. Calculate the total value of the improvement.

Effective DEI measures and evaluation processes that determine the potential ROI of a DEI plan can provide an organization with invaluable information to support critical business initiatives. The goal should be to embed DEI metrics into the organization strategic plan and make it a part of everyone’s responsibility. DEI champions need to help leaders motivate leaders, and peers encourage peers to influence each other and own the initiatives.