Measuring Diversity and Inclusion in the Professional Services Sector

Diversity and inclusion are good for business. Research by McKinsey showed that diverse companies are strongly correlated with financial outperformance. Our research paper, A Fairer Future, outlines how diversity is central to building trust and reputation, productivity, innovation, talent acquisition, and the effective management of risk.

One way of being ‘consciously inclusive‘ is to measure diversity in the workplace, including the impact of diversity, equity and inclusion (DEI) policies. What issues do professional services companies need to consider to achieve meaningful measurement of DEI initiatives?

Types of DEI reporting

It is relatively straightforward to measure diversity in a workplace through counting. Generally done via workforce surveys and recruitment monitoring, it is a blunt tool with widely differing definitions of ethnicity and gender orientation, to take two examples. Sectors need to identify what demographics they will include and how these will be benchmarked and tracked.

The demographics monitored may change over time as new research emerges. For example, a study by the Social Mobility Foundation revealed a class pay gap in the UK in ‘elite’ occupations such as solicitors, accountants and management consultants, which amounted to individuals working one day a week free. In many ways, class and regional disparities have become a new frontier in DEI initiatives.

Companies can measure the diversity of their employees, how it maps onto seniority, promotion opportunities, the composition of company boards and firings/redundancies. Just why counting matters is illustrated by research which estimates that in the UK, around 50,000, or one in every nine, women lose their jobs when pregnant.

A qualitative approach can be equally as insightful as quantitative metrics. Qualitative methods involve looking at why patterns are occurring in particular workplaces and departments through in-depth interviews or exploring employee perceptions via focus groups.

For example, Sommerlad et al. conducted a qualitative study of discrimination in the legal profession in the UK, consisting of 77 interviews with lawyers and five diversity managers. The research found persistent stereotypes of traditionally marginalised groups and a reliance on personal relationships to advance careers, which affected career progression.

Intersectionality

The impact of historical marginalisation on individuals and workplaces is a complicated issue. It is not just a question of sorting people into categories and counting. Measurements also have to consider intersectionality, that is, how people can experience multiple exclusions that compound each other.

For example, the Social Mobility Foundation research also found that people suffered a double disadvantage if they were both working class and a woman, or working class and black or minority ethnic. These intersectionalities impact their earnings across their lifetime.

Are businesses keeping track of new concepts and ideas? Katy Neep, from Business in the Community (BITC), a membership organisation that campaigns for inclusive business practices, told us that intersectionality is something that is increasingly on the corporate agenda:

“We are seeing companies who are saying, ‘we want to look at this through an intersectional lens’. For us, at BITC, that’s at the heart of what we do, and we understand those intersectional challenges.”

An equal focus?

Ninety percent of the professional services firms we interviewed said they apply an equal weighting to different groups they represent. Of those who say they do not, race/ethnicity and disability are the most important areas of focus (35% and 29%, respectively).

There are critical questions here. Companies should maintain a focus on all forms of discrimination. However, does that mean they may lose focus? Do all workplaces have a similar constellation of historically marginalised groups?

Probably not. Some workplaces may have predominantly a female workforce, which offers a different set of issues to consider than workplaces where disability dominates. Companies need to pay homage to the spirit of DEI monitoring (to track trends across sectors, which informs policy and future proofs companies) while also understanding, and acting on, the specific issues of their workplace.

Measuring impact

Despite good intentions and policies, not all firms have a system for tracking the impact of their DEI initiatives. Most firms in our research (68%) say they have a system to track success, and more than a quarter (26%) say they plan to. However, it means 32% of professional services firms cannot provide evidence that their DEI efforts are working well for their employees.

Again, there is a difference between sectors. Eighty-four per cent of law firms said they tracked the success of DEI initiatives, compared to only 55% of architecture firms.

Prioritising whether DEI policies are impactful is vital to ensure that the measures taken are more than just performative. As Neep says, “culture eats policy for breakfast.”

Measuring inclusion

Another way to think about impact is inclusion. Inclusion means a workplace where everyone feels supported, respected and valued and all employees can participate, develop themselves and progress. Measuring inclusion is about tracking perceptions and biases, which are difficult to measure through traditional approaches.

One tool to measure inclusion is the Gartner Inclusion Index, which asks seven questions to employees on fair treatment, integrating differences, decision-making, psychological safety, trust, belonging and diversity. By reducing assessment to seven trackable metrics, employers can quickly respond and identify anomalies, such as departments with toxic cultures. Focus groups and interviews can follow these simple and quick surveys to identify patterns and causes.

DEI thought leadership

Companies should view DEI monitoring as part of an arsenal to enhance inclusion. Greater inclusion benefits them and can become a core part of their thought leadership – working as a sector to establish the best practice in diversity and inclusion policy and ways of working.

Our report, A Fairer Future, is a deep dive into DEI in the professions, revealing how companies address diversity and inclusion, and what we believe true thought leaders should be doing to promote inclusive workplaces and representative leadership.

Download the report for more insights