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Using Analytics to Solve the DEI Challenge

Updated: Feb 6, 2022

This article originally appeared on IHRIM's Workforce Solutions Review magazine.

The Covid-19 pandemic brought major change and upheaval to work and personal lives. But another major change in 2020 and 2021 has been the increasing push to prioritize Diversity, Equity, and Inclusion (DEI) in the workplace. Diversity, Equity, and Inclusion (DEI) is certainly not a new concept in the world of business. For many, the racial justice protests in 2020 shined a bright light on existing racial and gender inequities in society and highlighted the need to improve transparency and drive change with respect to how DEI is addressed in society and work.

A January 2021 study by JUST Capital JUST Capital corporate-racial-equity-tracker, found large companies getting the diversity message. JUST Capital’s Corporate Racial Equity Tracker, which gathers DEI data disclosed by the 100 largest employers in the Russell 1000, shows investors how companies are doing on their diversity, equity, and inclusion commitments. According to JUST Capital, “while only 45% of those 100 companies disclosed such data in 2019, that increased to 80% just two years later”.

While only 45% of those 100 companies disclosed such data in 2019, that increased to 80% just two years later

Diversity Matters Financially

A 2018 white paper “Delivering through Diversity delivering-through-diversity” by McKinsey and Co. as well as their 2015 study “Why diversity matters why-diversity-matters”, showed how much gender diversity matters in company performance, with gender-diverse companies performing 21% better than the national average. The study also found that ethnically and racially diverse companies had 43% higher profits.

From a progress standpoint, the issues with diversity and equity are most obvious at senior levels in organizations. The higher one ascends in a company, the more precipitously diversity drops off, which in turn results in less pay equity and inclusion.

Most companies would say that there are simply too few fully qualified diverse candidates for the most senior roles in their organization and industry overall. However, is that true or just an excuse? This is where analytics comes into play. Using analytics and publicly available data such as the Bureau of Labor Statistics and U.S. Census data from 2020, we can verify by geography and job type what the diversity level is by geo metro area and job type (U.S. Census has 100 job types and BLS nearly 900).

Using U.S. Census data from 2020 a given job family in a particular geo-metro area can be tested and benchmarked to verify whether or not companies are stating the truth or simply doing a terrible job or recruiting/retaining diverse talent.

For example; 2020 U.S. Census data for the working population at the support staff and operations level (lower level lower-skilled jobs), shows that racial demographics in the workplace most closely match U.S. demographics overall with the exception of Latinx individuals making up 10% of this workforce tier compared to 18.5% of the general population. Therefore, at lower levels of many organizations and industries, employment does closely match the U.S. overall.

Then what is preventing greater levels of diversity at higher levels in organizations?

As we move up in terms of skills and education in the U.S., the percentage of white staff increases steadily at each level of the corporat