Article: The value of people analytics in improving DEI

Diversity

The value of people analytics in improving DEI

In her keynote at People Matters TechHR India 2021, Lexy Martin, Principal, Research and Customer Value, Visier, discussed the way to achieve gender pay equity in nine years and the need to eliminate the ‘Manager divide’.
The value of people analytics in improving DEI

A long time researcher, Lexy Martin is presently Principal, Research and Customer Value at Visier. In her keynote at People Matters TechHR India 2021, Lexy reflected on the progress of diversity and equity in the last five years, discussed how people analytics can close the gender equity gap and emphasized the need to eliminate the Manager Divide’

Sharing how data and analytics are transforming the DEI landscape, Lexy said, “People Analytics is making a difference…With a full understanding of how broader trends are impacting gender equity, employers can make the best decisions possible to make headway.””

Here are highlights from the session.

Tracking DEI Progress in the last five years

Lexy kickstarted the keynote with research findings from the last five years focused on tracking progress in DEI. As per the findings, there is a positive movement in enabling gender equality, stated Lexy.

Sharing cases on how employers across the globe are responding to this space, Lexy noted that people analytics is shining a light on diversity and inclusion and as a result several employers have created a new D&I role, leading to improvements since then.

Lexy highlighted how a global industrial manufacturer leveraged analytics to identify how women and other underrepresented groups moved through the hiring funnel. “They uncovered that the number of women applicants was disproportionately lower than males which led them to take a number of actions. They leveraged this insight to encourage more participants in STEM education to build a talent pipeline of women and people of colour.”

A 2020 Visier report ‘Visier Value: People Analytics Improves Women Leadership Ratio’, found that organizations using people analytics for atleast two years had improved female leadership retention by over 70% and the female to male ratio by 11.5%.

“What we are looking at here is the female to male leader ratio in the leadership feeder pool. It’s a set of leaders who are equivalent to (as per McKinsey) senior managers, vice presidents and above,” said Lexy.

According to the report, the likeliness of a woman replacing a male leader at senior positions was significantly low. Women were mostly found to take up leadership roles that either remained vacant for a longer period of time or were previously held by women. 

In contrast, at lower levels, the stats differ. Women at lower levels, not necessarily in managerial positions, are making progress in breaking glass ceilings. “At lower levels, when we looked at internal hiring and movement data, females are increasingly replacing males. The percentage of women replacing men at lower levels has increased by 25%, a significant change.”

The Visier report reveals improved profitability, better margins, better revenue and qualitative benefits such as more trust, collaboration and better management for organizations where there are more women in leadership roles, noted Lexy.

Gender pay equity: Progress, hurdles and the role of analytics

Lexy shared that despite their being statistical improvements in DEI, a lot remains to be done. Visier’s 2016 gender equity report revealed the ‘Manager Divide’ - an underrepresentation of women in manager position from age 32 onwards. The report linked this trend to the subsequent finding that as careers progressed, women faced a substantial gender wage gap, nearly impossible to close.

“There is a dip in the percentage of women in the workforce, between the ages of 25 and 40, when they are often taking off to take care of children. The dip though recovers around the age of 39. Men in the meantime, are getting promoted at higher salaries.”

Lexy highlighted that the key finding of this report was that if the Manager Divide was removed, or could be made smaller such that the same proportion of men and women held managerial positions, the gender wage gap would be reduced. Interestingly, the 2020 report revealed that the Manager divide still holds true but the picture has changed. High tech and manufacturing industries are significant contributors to women today resuming their careers between the ages of 35 - 40, as opposed to earlier.

“Over the past three years, the pay gap closed by six cents, and if this rate of change continues at the same pace, pay equity can be achieved in nine years,” said Lexy.

“Gender equity has to continue to be pursued by design with people analytics capabilities, taking performance history data into account while making promotion decisions and factoring employee sentiment. 

Reflecting on the above statistics, Lexy said that women at younger ages made gains of seven cents instead of six cents, indicating employers are paying attention to narrowing the pay gap at the level of new job entrants. The pay for women aged 35-40 remained at 90 cents vs a dollar for men. Researchers attribute the reason for maintaining this gap from falling further to women’s educational gains and the demand for higher skilled labour.

Two key findings from the Visier research were:

  • Organizations are using people analytics where unconscious bias is impending improvements across the employee lifecycle
  • Organizations are taking smart actions from insights

“Employers can take a proactive role in supporting gender equity as we all move towards recovery to minimize pandemic impacts. With people analytics in place you can continuously monitor your data, you can identify where unconscious bias is impeding progress, you can ensure key demographics are accounted for while making recruitment and promotion decisions. With analytics driven planning, employers can also make projections to see how certain courses of action impact women specifically,” highlighted Lexy.

Getting started on DEI analytics

“If you are getting started with analytics, female equality requires assessing the starting point,  benchmarking, establishing goals, creating a roadmap with milestones and clear accountability. Data is critical to avoid guessing and make the case for change,” noted Lexy.

“In essence, what you are looking for are those demographic cuts, where numbers are off, that can point to where things need to change. You can then map this into your strategy and career planning to identify where high potential women need to build skills to meet both organizational and individual needs, through data-driven career conversations.”

Lexy further advised leaders to share insights, ideally publicly to create accountability, but to atleast do it internally, to make equality improvements a shared. Noting that this is a continuous improvement cycle, she encouraged leaders to review changes over time.

“Improving diversity, inclusion, and equity must continue to be pursued by design and supported by data,” she reckoned.

People analytics across the employee life-cycle

Advising leaders to apply data across the employee lifecycle - attraction, development, retention - to review areas of potential unconscious bias, Lexy shared some key questions to keep in mind when looking at talent management with the lens of DEI.

While the talent funnel itself poses several questions on how fairly are women and minorities represented in the talent funnel, and how inclusive the interview panel is, there are some key questions, especially at the development and retention stage that provide insight into what pockets of talent strategy need course-correction:

Development:

  • Do women/ minorities get equal opportunities to grow?
  • How long do they wait to get promotions and is comparable to diverse groups?
  • Do they receive the same amount of development and career pathing?
  • Is the performance review process biased?
  • Are they equally represented in successsion planning?

Retention:

  • Are retention activities biased against women and minorities?
  • Is pay equitable?
  • Do diverse employee groups have a higher turnover?
  • Do women leave the workforce at a particular point in job progression?

“There is so much richness in being able to look at diversity and equity across various employee lifecycle processes and what the organization does to attract, develop, assess performance, compensate, retain and ultimately improve diversity and equity."

As organizations relook at their DEI strategy in the current context and stive to make their efforts and impact sustainable, analytics indeed is becoming the rock solid foundation to shape a meaningful and impactful DEI strategy. How swiftly and efficiently leaders are able to leverage analytics to inform strategy will determine the scale of business value addition, quantity and quality, that follows the efforts.

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Topics: Diversity, HR Analytics, HR Technology, #TechHRIN, #HRTech

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