Strategy & Leadership

Time to act: Seven principles for effective diversity, equity and inclusion data collection

November 05, 2021


Time to act: Seven principles for effective diversity, equity and inclusion data collection

November 05, 2021

Dina Alborno

Senior analyst, Policy & Insights, Economist Impact

Dina Alborno is a senior analyst with Economist Impact's Policy & Insights team based in London, working with Europe and Middle East-based clients in support of their public policy-related initiatives. Her recent research has focused on trade and globalisation, including themes such as migration governance and economic opportunities for refugees, in addition to environmental sustainability and climate change, including topics such as the sustainable management of shared water resources and youth priorities for sustainability. Dina holds a bachelor’s degree in Politics, Philosophy and Economics from the University of Oxford.

Executive summary

Workplace diversity, equity and inclusion (DEI) measures transform an organisation. A more diverse workforce and inclusive environment increases company profitability, strengthens talent retention and attraction, and improves product strategy and development. A 2018 Boston Consulting Group study found that firms with greater diversity on their management teams generate almost 20% higher revenue from new products and services developed than those with below-average levels of diversity. Companies that do not embrace DEI are at risk of falling behind. They lack varying perspectives, limit the talent they have access to, may face lower employeeretention rates, and are at risk of public backlash and regulatory intervention. Yet, companies are still too slow in their embrace of DEI. A 2020 McKinsey report confirms this: globally gender diversity in leadership teams increased by only 1 percentage point from 2017 to 2019, from 14% to 15%, and ethnic minority representation rose from 12% to 14%.

The success of DEI programmes depends on good-quality data. Data enables companies to identify areas of poor DEI-related performance and develop fact-driven solutions. Ade Rawcliffe, group director of diversity and inclusion at ITV says that organisations can set themselves DEI goals, but “won’t know if [they’ve] met those targets unless you give [them] the data”.

Data is central to DEI efforts, yet it is notoriously difficult to collect. The reasons behind employee hesitancy to disclose personal information and experiences with employers include lack of clarity around how the data will be used; confusion over why the data is necessary; concerns regarding anonymity, data storage and protection; and fears of negative consequences of disclosure on job safety and career advancement. Ultimately, it is lack of trust in an employer that discourages disclosure.

While some companies manage to successfully collect data on their employees’ characteristics and experiences, many fall short. This data gap severely inhibits their ability to make effective DEI interventions. However, these firms cannot hide behind employee unwillingness to share data as an excuse for poor DEI-related performance: an Economist Impact survey of 1,000 employees in the UK and Ireland found that the majority of employees are willing to disclose diversity data to their employers, and that this willingness is especially pronounced when employees perceive that their organisations have made significant progress in encouraging DEI in recent years.

With employee willingness to share diversity data on the rise, it is the role of companies to take action. First, they must focus on becoming more inclusive: employees in non-inclusive workplaces are less likely to feel comfortable sharing their data. Organisations must create a culture where the voice of each employee, regardless of background, is valued. People from minority backgrounds in terms of gender, sexuality, ethnicity, race and religion, as well as individuals with disabilities, must feel safe and welcome in the workplace. It is only then that companies will be able to collect comprehensive data from their employees and make progress on diversity.

To further encourage data sharing, companies must then regularly communicate with their employees, ensuring that employees understand how the data will be used and why it needs to be collected. Firms must embed data collection as part of a company-wide cultural transformation, and ensure that it covers all identity characteristics and avoids broadly grouping together characteristics. Finally, companies must employ datacollection processes that are simple and continuous.

This report explores how the rapidly changing DEI discourse is developing, discusses the role of data in DEI initiatives and examines employee perspectives on sharing personal data with employers. It then considers actions that employers can take to encourage datasharing and hit DEI targets.

Key findings include:

• The discourse around DEI has changed. The culture of DEI has shifted considerably in the past few years, against a backdrop of various social and political movements. Employees are placing increasing importance on workplace culture and values. They are more vocal about demanding change when it comes to DEI and the fair treatment of all colleagues. DEI is no longer only good for business; it is increasingly being seen as the right thing to do.

• However, progress on DEI remains slow. Despite the recent waves of public commitment to increasing DEI and reducing institutional bias, underrepresented communities remain marginalised in the workplace, and companies remain unaccountable. Our survey finds that more than three-quarters of employees (77%) agree that their organisations do a good job of treating people equally and being inclusive, regardless of their minority characteristics—but minority groups do not share such positive views.

• The success or failure of DEI depends on good-quality data. Data eliminates uncertainty and roots organisations’ DEI-related discussions in evidence. The monitoring of DEI metrics is critical to the development of impactful DEI initiatives, enabling companies to hold themselves to account, design policies that apply to thespecific demographics of their employees, and improve employee retention, progression and engagement.

• The majority of employees are willing to share data. Our survey finds that threequarters of UK-based employees and 62% of Ireland-based employees have been asked to disclose personal data pertaining to their demographic characteristics by their current employers, and a majority are willing to share this data. Over two-thirds (70%) of UK-based respondents and 60% of Ireland-based respondents are “likely” or “very likely” to participate in such processes, while only 9%and 13% are “unlikely” or “very unlikely” to.

• However, employers must take action to make sure that all employees feel comfortable disclosing data, regardless of their characteristics. Not all employees are equally comfortable with disclosure. Those identifying as a minority are more inclined to be “very likely” to participate than employees who do not. But willingness varies among minority groups: only a third of racial and ethnic minorities and employees with a cognitive/mental or physical disability are “very likely” to participate, for instance, compared with 44% of individuals identifying as LGBTQ+.

• There is a correlation between where progress has happened and willingness to share data. It is difficult for a firm to encourage employees to disclose data if it has a poor track record on DEI. Over twofifths (43%) of employees in organisations that have made significant progress are “very likely” to participate, compared with only a quarter of employees in organisations that have made less than significant progress. But poorly performing firms need data in order to make the “right” DEI interventions.

• To improve their performance on DEI, firms must first focus on increasing inclusion in the workplace. To encourage data sharing, companies must work to create an inclusive culture where employees feel welcomed and valued regardless of their personal characteristics. Initiatives to advance inclusion include ensuring a whole-of-company approach to DEI—through which all employees are consulted and engaged in the development of programmes—and acknowledging the overlapping nature of identities, ensuring that programmes do not address minority groups in siloes.

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