In an article titled, “Diversity Plans Tough to Measure” that appears in the latest issue of Human Resource Executive Online, Jared Shelly writes that although many companies want diversity programs (according to a study by i4cp), most have not defined what they mean by “diversity” and most don’t measure the ROI of these programs. It is my experience that for many companies, having a diversity program is simply a way to protect themselves against EEOC complaints and lawsuits. They don’t care about quality and results of these programs.
For others, who care about impact on their organizations, their HR leaders believe that it is too difficult and too costly to measure the return on their investment in diversity initiatives. If by ROI they mean a dollars and cents calculation of cost savings and revenue increase, they might be right. However, evaluating the impact of diversity programs should not be difficult nor should it be costly. The first step is to define diversity in the organization. Does it mean:
- complying with EEOC guidelines?
- recruiting a diverse pool of candidates for a job opening?
- promoting women and minorities to senior level positions?
- working effectively in diverse teams?
- effectively managing a diverse workforce?
- being personally aware of one’s own stereotyping?
- something else?
We can’t develop useful measures of diversity until we know which of these definitions is being used and, therefore, what are the indicators of success.
I have written previously about measuring the results of one particular diversity program (including measuring ROI). The purpose of that program was “… to improve leadership skills for middle and senior managers by providing information, tools and processes for them to become more effective at managing and leading diverse teams to deliver exceptional customer service.” To achieve this goal the company put employees through an intense, three-day leadership development and team building workshop followed by informal coaching. One cohort of participants were surveyed several months after the workshop to determine who was applying what they learned and who was achieving business results related to the diversity program. Those who reported gains were interviewed. From these interviews, the company discovered that the program had a profound effect on the attitudes and behavior of some managers. Positive actions that were attributable to the diversity program were documented and, in some cases, cost savings (e.g., retained worker) and revenue increases (e.g., successfully negotiated contract) were calculated. From this study, HR leaders discovered the strengths and weaknesses of the program and its potential for success. This study was neither difficult nor expensive and the results were vital to the company and its employees.