From Performative to Transformative: How DEI Insights Tied to the Bottom Line Transform Your DEI Outcomes

Jessie Spellman, Director of Diversity, Equity and Inclusion at Walmart

Diversity, equity, and inclusion (DEI) data analytics and insights are a critical first step to improving an organization's DEI outcomes, but tying these insights to the bottom line can transform your organization's DEI strategies and results. After all, decades of research show us that more diverse organizations are more innovative and profitable.

Many organizations already report headcount representation, but the makeup of who we recruit, retain, and advance drives overall headcount representation. Organizations move from performing DEI activities, like reporting headcount, to transforming DEI outcomes, like building diverse organizations, by demonstrating the business implications of employee heterogeneity.

How do we build diverse, equitable, and inclusive organizations?

Most organizations strive to build an organization representative of the communities it serves. How do organizations effectively build representative organizations? Recruiting is a critical first step, but it must be considered alongside retaining and advancing employees.

It's easiest to see this dynamic through an example scenario. Let's say we are part of an organization where women are 45% of the customer base but only 30% of the employee headcount. “ how do we create an organization that is more representative of women?

We may be excited if 40% of our recruits are women each year, but we won't make meaningful progress without also considering the makeup of our employee retention and advancement. Suppose 55% of our organization's exits are women. In that case, women are leaving the organization faster than we can replace them with recruits - the lack of employee retention mitigates any gains seen in recruiting.

Let's say this organization sees only 25% of its promotions go to women. In this scenario, women are not being promoted at the same rate as their headcount, impacting career paths and providing headwinds to improving overall representation.

By leveraging data holistically, considering not only the current makeup of an organization but also the makeup of an organizations recruitment, retention, and advancement, we can best determine where the most significant impact can be made and where the most strategic areas are to focus.

"Our collective peace, our collective rest, and our joy will topple these broken systems."

In the above example, our organization hired a more diverse pool than the current headcount (40% women hires vs. 30% women headcount). With promotions less varied than headcount (25% women promotions) and exits more diverse than headcount (55% women exiting), we know we have opportunities to improve employee advancement as measured by the makeup of promotions and employee retention as measured by the makeup of exits. A comprehensive analysis would also consider the relative trends (how groups fare compared to one another) and the trends over time (how progress has waxed or waned since efforts began) to prioritize DEI focus areas and tactics.

From performative to transformative

Recruit: While a diverse, vibrant workforce improves culture, drives innovation, and boosts productivity, we must make this real for our business partners by tying these outcomes directly to the bottom line, motivating our organizations to action. For example, research from Harvard Business School shows that companies with more diversity produce 19% more revenue than similar companies that are more homogenous.

Retain: We can say that reducing turnover through retention strategies mitigates hiring costs, direct training costs, and the low productivity of new hires, but we can also quantify the actual costs of hiring, training, and productivity. We can bring the analysis to life by showing our business partners how reducing turnover boosts profits by as much as 60%, according to research by The Good Jobs Institute.

Advance: Clear and equitable career pathing, along with fostering a sense of belonging, can improve operational execution and customer experience, but we can also quantify these effects by applying research that shows employee performance improves by as much as 56% when career pathing and belonging is improved. 

Connecting all DEI outcomes around recruitment, retention, and advancement to business outcomes drives accountability, ownership, and action, moving us from performing DEI activities to transforming DEI outcomes.

Staying the course

Regarding DEI, there is no finish line: The work is a continual, iterative, and relational journey that sometimes feels at odds with most organizations' ways of working. We stay the course because building diverse, equitable, and inclusive organizations is not only the right thing to do; it is essential to competitive market positioning in the 21st century. We will lead our organizations into the future by:

1. Asking the right question to determine focus areas: “Is there a gap in our recruitment, retention, or advancement?

2. Connecting DEI outcomes to business outcomes: “How can we demonstrate the business impact of our work?

3. Establishing a regular cadence: “How often should we meet with leadership to review our strategy and celebrate progress?

Most importantly, we must take care of ourselves and each other. DEI advocates have more faith than most. We try our best every day to see the bigger picture and know deep down that all our actions and conversations, no matter how small, contribute to the next big breakthrough. This work can be exhausting, and we all deserve peace and joy. Our collective peace, our collective rest, and our joy will topple these broken systems. Be kind to yourselves and keep going.

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