FOR DATA & METRICS

The Business Case

UTILIZING DATA TO SUPPORT MEANINGFUL IMPACT IN INEQUITY

In order to create more diverse and equitable organizations, leaders and employees alike must commit to the hard work of confronting unconscious bias and institutional barriers that act as barriers for entrance and success for underrepresented groups. The intentional measurement of Data & Metrics helps support companies in their DEI&B and ESG goals by helping locate the source of issues. Furthermore the tracking of DEI&B metrics can help create a diverse and equitable workforce that supports business output and results.

The Bioscience industry and employees are driven by a common goal to improve public health. The impact of lack in diversity doesn’t just impact the marginalized communities they are supposed to serve. When diversity isn’t represented and honored, Bioscience loses:

INNOVATION

“We find that the more underrepresented genders or races in their discipline, the more they are likely to introduce novel conceptual linkages. Yet the more students are surrounded by peers of a similar gender in their discipline, the more their novel conceptual linkages are taken up by others: that is the less a student’s gender is represented, the less their novel contributions are adopted by others… Most surprisingly, the positive correlation of novelty and impactful novelty on career recognition varies by gender and racial groups and suggests underrepresented groups’ innovations are discounted.” (The Diversity Innovation Paradox in Science)

“Diverse groups are more prone to conflict, but conflict forces them to go beyond the easy solutions common in like-minded groups. Diversity leads to contestation of different ideas, more creativity, and superior solutions to problems. In contrast, homogeneity may lead to greater group cohesion but less adaptability and innovation…” (The Diversity Innovation Paradox in Science)

COST OF TURN-OVER

“Thirty-five percent of an employee’s emotional investment to their work and 20% of their desire to stay at their work is linked to feelings of inclusion.” (Catalyst)

“Improved employer brand and reputation. Fair treatment is important to employees, and a diverse workforce can make an employer more attractive to investors and improve the organization’s public image.” (Making the Business Case for Diversity and Inclusion, Morley, 2018)

Numerous studies have shown the benefits of a diverse, equitable workplace for business performance, innovation, customer loyalty, and employee trust. Diverse teams better represent the customers they serve, make decisions with fewer blind spots, and bring more varied and innovative thinking to problem-solving.

•Inclusive and diverse teams outperform less inclusive teams as much as 50%.

•Diverse management teams have a 19% increase in revenue compared to less diverse teams.

•Diverse companies have 2.3 times higher cash flow per employee.

Organizations thrive when they foster higher levels of representation, a diversity of thought, and an inclusive workplace. The “Gartner 2021 Leadership Progression and Diversity Survey” reports that companies making a serious effort to improve DEI&B are more likely to reach goals faster.

Even though it may take years to achieve gender and racial parity, proactive companies are making the most significant gains. We must empower these initiatives with data to pinpoint issues, in order to expedite significant impact, while also examining effectiveness.

AN ESSENTIAL COMPONENT TO A COMPANY’S DEI&B STRATEGY

The challenge is that it’s often difficult to know what’s going on inside a company. Habits, existing processes, and unconscious biases shape our understanding of what’s happening, which can cause us to overlook issues or over-index on correcting them.

Data can reveal the irrefutable truth, turning a conversation based on opinions and beliefs into one based on facts. Using data in diversity and inclusion initiatives can help organizations move beyond tick-the-box exercises. It can enable them to take an honest look at where they’re falling short, assess the experience of specific groups in the company, and prevent employee attrition before it happens.

In addition to driving business performance through a diverse workforce, investors are increasingly applying ESG (Environmental, Social, and Governance) as part of their analysis process to identify material risks and growth opportunities. To date, a limited number of companies have disclosed DEI&B data, but the numbers are increasing significantly. The limited amount is likely driven by the reaction from internal and external stakeholders. The story data paints may signal to absent formal and robust DE&B strategies and policies.

“Data-informed decision making is so important, specifically when we are talking about DEI. Rather than just aiming for a quick fix to improve your numbers in terms of diversity, data-informed hiring allows for you to evaluate the physical characteristics such as ethnicity and gender, but also characteristics of diversity of thought, education, or experience that have immense value.”
— Kim Lee, Exec. Director at Department of Homeland Security

Additionally, disclosure had been optional, but the SEC on Aug. 26, 2020, amended its disclosure requirements relating to the description of the business, legal proceedings and risk factors. The final rules require registrants to describe certain aspects of their human capital resources within the overall framework of principles-based disclosures. The new human capital disclosures should be supported by effective controls and procedures, showing that the movement toward a data-driven approach has started. But companies face a few key challenges when it comes to measuring, reporting and gaining deeper insights from data. For instance, in terms of ESG reporting, there is often no consensus on what metrics to report. Companies also frequently lack a standardized reporting process, controls and quality data, and reporting is mostly manual.

Leaders should define a set of relevant ESG metrics, such as those in this material, and proactively determine what information to report, how to source it and who the key stakeholders are. They should likewise standardize data sources and attributes, data quality expectations, definitions of metrics, and general policies and procedures related to gathering data. 

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