Nicole Jelley, LLB, PHR

Executive Director

Talent Pool

ROI OF

DIVERSITY

Today’s Reality

Strategies

Solutions

Best Practices: Assessments, Tools, Job Aids

AGENDA

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Human Capital Imperative

Canada will have a significantly smaller labour force in 2017

Nearly all members of the baby boomer generation will be/are 60 years of age or older. By 2024, more than 20% of us will be seniors!

Our birth rate decreased 25.4% between 1992 and 2002, and our fertility rate was a mere 1.5 in 2002. No changes!

It is in our national interest to:

ensure that as many Canadians as possible have the opportunity to participate in the workforce,

create opportunities for our best and brightest, and

allow a diverse workforce to succeed in our modern Canadian economy…fast.

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FLEXIBLE and MODERN POLICIES

ENABLING POLICIES and PRATICES

We BECOME an ENABLER of INNOVATIVE PRACTICES

We Need

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Good News More CEOs Are Piping Up: Outside of the surge in corporate webpages that now include a

diversity statement from the CEO, more CEOs are using their platforms to address inclusion

issues “live”.

Semantics Aren’t So Subtle Anymore: What’s in a name? When it comes to diversity, if

you’re not tying inclusion efforts to innovation, than you’re thinking archaically. Diversity roles

are being coupled with innovation.

Diversity’s Definition Has Changed! Diversity of thought is in!

The business case for diversity has never been more front and center than it is

now…and why not? Basic economic theory suggests that consumers will correct for a

company’s lack of diversity by simply not spending money there—making slow-to-

change organizations extinct.

Technology Will Move From Burden to Benefit: HR analytics move to the front of the line!

We can’t be “too busy” anymore to work with diversity

Five Trends Driving Workplace Diversity In 2015 by Selena Rezvani

BETTER NEWS

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It’s not just intuition anymore that Diversity matters!

Diversity Matters by McKinsey 2015

Diversity drives our Global Economy!

Drives innovation

Increases creativity

Makes recruitment easier

Avoids high turnover

Captures more of the market

More then just…

Diversity is more than just demographics.

Workplace diversity includes differences in work ethic, thought processes,

communication styles and motivational drivers -- all the things that make for a

strong workforce and an even stronger employer brand.

The primary goal of a company’s employer brand is to distinguish the company as a

desirable place to work, and diversity is a key to attracting more talent. According to

a 2014 survey by Glassdoor, 67 percent of job seekers say a diverse workforce is

an important factor when evaluating companies and job offers.

The Economist Intelligence Unit (EIU) report 2015 also reported that 80 percent

of respondents say diversity management can yield a competitive advantage in

labour markets.

The diversity profit equation

Companies are increasingly looking at more quantitative ways to link corporate diversity

efforts to ROI.

Remember: Diversity is no longer a code word for affirmative action.

Having managers who understand the need to effectively manage the differences in the

workplace is not an option; it is a business necessity

All of the behaviours highlighted below have a demonstrated impact on business ROI:

Amount of discretionary effort given

Sick days and company medical expenses

Frequency of safety incidents

Overall propensity to leave (turnover)

Impact on employee ideas and suggestions (creativity)

Lost revenue per FTE

Effect on regrettable losses

Impact on unexcused absences

Quality of customer service given

Additional financial implications

Lost revenue per (Full Time Equivalent – FTE) e.g. the number of full-time employees or

the equivalent thereof

Lack of effort being given (e.g., 57% report giving less than 100% on a regular basis)

Impact of productivity lost due to (Time to Fill - TTF) days (how many days it take to find

and hire someone to take over the job responsibility of the departing employee)

Impact of ideas and suggestions

Impact of lawsuits and settlements linked to derailing behaviors

Eight to 10 other metrics!

The Diversity Profit Equation Corporate White Paper by: Craig B. Clayton, Sr.

Diversity Return on Investment (DROI)

Diversity impacts individuals, teams, the organization, customer markets,

and communities at large.

Measurements must be done at all of these levels, which has an exponential

effect on the size of the measurement task.

We need a roadmap so as not to get lost within the size of the task.

We must acquire and create performance standards for diversity.

We must link diversity goals to the goals and objectives of the organization.

Provide a way to combine diversity and organizational measures such that they

support each other and do not work at cross-purposes.

Provide options for varying the process, given the type of organizational work or

process being measured.

7 steps to calculate DROI

Know what you want to know: create the Diversity Measurement Study

objectives

Prepare and Collect data: review historical data & survey the organization

Isolate diversity’s contribution: select a method (Hubbard Diversity 9-S

Framework)

Convert the contribution to money! Convert the hard data contribution to $$$

Calculate the costs, benefits and DROI: calculate the benefit-to-cost ratio & the

Diversity Return-on-Investment (DROI %)

Report it !

Evaluate, evaluate, evaluate

Results/Weight Diversity Performance

Standards Diversity Metric(s) / Target Organization Impact

Business Unit Diversity Teams (25%)

Diversity Best Practices mirrored at the business unit level

Diversity Best Practices mirrored at the business unit level

At least a 25% increase in customer satisfaction due to diversity intervention

Improved Customer Service

Staffing (20%) Diversity source cost reduced

Diversity hire retention by group is increased

Diversity hire performance impact and quality is tracked

Less than 20day Time-to-fill Rate

Reduction in Source cost per diversity hire

At least a 95% Diversity hit rate

At least a 90% Diversity hire performance impact

90% Diversity survival rate

Diversity stability factor

Target increase (#/%) of minority and women promoted by category and level

Cost/Benefit of Turnover Reduction

Diverse workforce reflective of customer and local population demographics

Dr. Edward E. Hubbard

Workforce Demographics

Race, Ethnicity, Gender

Employee composition v. external availability

External applicants v. hiring

Employee composition v. external applicants v. hiring

External applicants v. internal applicants

Internal applicants v. promotions

Internal & external applicants v. placements (hires & promotions)

Promotions v. feeder jobs composition

TOOLS?

Voluntary terminations v.

employee composition

Involuntary terminations v. employee composition

Compensation (base, bonus, perks)

High potential list composition

High potential list v. feeder jobs

Comparative success of multiple year HiPo’s

Analysis of reasons for involuntary terminations

Analysis of reasons for voluntary terminations

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Our HR World Without Metrics

Workforce Demographics

Gender

Employee composition v. external availability

External applicants v. hiring

Employee composition v. external applicants v. hiring

External applicants v. internal applicants

Internal applicants v. promotions

Internal & external applicants v. placements (hires &

promotions)

Tool of Choice

Hubbard Diversity Scorecard

Dr. Edward E. Hubbard – The Diversity Scorecard

THANK YOU