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With DEI becoming one of the active topic in the workplace, a majority of employed U.S. adults, namely 56%, focus on increasing DEI at work, shared Pew Research Centre Survey. Large to medium corporates are paying more attention to employee morale and keeping up with international standards to provide a wholesome environment at work by including all kinds of people with diverse cultural, religious and gender backgrounds.
The same study has shown that most workers say their employers pay the right amount of attention to DEI. This, in turn, provides a better workplace culture, improves productivity, and is a social stimulant. A reaserch on D&I has showcased that companies with highly diverse teams have notified a significant increase in cash flow, 2.5 times per employee. The same research has shown that highly diverse teams showcase 35% more engagement and productivity, stressing the need for every company to audit their workspace DEI.
Let’s begin with the basics.
What is a DEI audit?
A DEI audit comprehensively assesses an organization's diversity, equity, and inclusion practices.
The company itself usually does this audit to keep up with the international standards of workplace culture that help build a good office environment.
The audit involves a systematic review of policies, procedures, employee experiences, and organizational culture to gauge how effectively the company is promoting diversity and creating an inclusive work environment.
The goal of a DEI audit is to identify strengths, weaknesses, and areas for improvement, that will help promote the work culture and build a diverse and equitable workplace.
Components of a DEI audit
1. Data collection and analysis
The first component is gathering data on employee demographics which includes gender, race, ethnicity, age, and other such details.
Audit teams can also look into qualitative data that can be acquired from surveys done on employees or from focus groups developed within the company to enhance the value of the data.
2. Policy and procedure review
Another important component is to evaluate the organization's policies, procedures, and practices and assess the alignment of these with the DEI principles.
Policies and procedures that are in line with various HR functions such as recruitment, hiring, promotion, compensation, grievance handling processes, and employee development and training initiatives, are all taken into consideration here.
3. Leadership assessment
The representation of leadership is an important parameter. Examining the level of representation of diverse individuals in leadership positions and at the board level is critical to the organization.
Whether a company's leadership reflects the diversity of its workforce is indicative of the organization's commitment to diversity and inclusion at a broader level.
4. Inclusive culture evaluation
An important parameter in DEI audit is analyzing the organization's overall culture, values, and norms to assess whether the company promotes inclusivity and respect for all employees.
The kind of affinity network, resources for recruitment and the various initiatives taken by the company as a whole is examined by the team.
5. Benchmarking and best practices
The final component to understand the standing of the company is by comparing the organization's DEI efforts to industry benchmarks and best practices. This also helps in coming up with the areas of improvement for the company.
The importance of a DEI audit
Conducting a DEI audit is of utmost importance as it lays the foundation for a positive, impactful change towards a more inclusive and diverse workplace.
Some of the prime reasons why a DEI audit is critical are as follows:
1. Identifying inequities and gaps
Most companies look diverse from the outside but a proper audit can reveal the truth. A DEI audit helps in pinpointing the areas where diversity and inclusion efforts may be falling short within a company.
By identifying specific disparities or inequalities, the company can take targeted action to address these challenges.
2. Creating data-driven strategies
Data is the hard truth and helps make things clearer - An audit provides empirical data that lays down the foundation for evidence based strategies.
Instead of relying on assumptions, data-driven decisions can lead to more effective outcomes.
3. Fostering employee trust and engagement
Conducting a DEI audit is a great way to improve a diverse and inclusive work culture.
Employees appreciate the organization's commitment to conducting a DEI audit, as it demonstrates a genuine interest in their well-being.
This leads to increased employee trust, engagement, and loyalty within the company.
4. Enhancing organizational reputation
A company that is outspoken about inclusivity and a positive work culture has a stronger image.
A commitment to diversity and inclusion positively impacts an organization's reputation both internally and externally.
Prospective employees, clients, and partners are more attracted to an inclusive company culture and people love to be associated with such a brand.
5. Improving business performance
As mentioned earlier, the diversity and inclusivity helps promote a healthy work atmosphere and therefore drives success at work.
Diverse and inclusive workplaces are more innovative and adaptable, which helps with better problem-solving and decision-making.
Companies that prioritize DEI are better positioned to outperform their competitors in the long run.
6. Mitigating legal and reputational risks
One of the challenges in today's world is the various legal complications that can arise in times of conflict.
A proactive DEI audit can help organizations identify potential legal risks related to discrimination or bias at the workplace and take corrective measures beforehand to avoid costly legal issues or damage to the company's reputation.
7. Aligning with stakeholder expectations
DEI audits are mostly done at bigger companies with a large workforce.
If this is a company that is public, then stakeholders, including customers, investors, and the wider community increasingly expect companies to demonstrate their commitment to diversity, equity, and inclusion.
A DEI audit signals this commitment and can positively impact stakeholder relationships by initiating a positive outlook and discourse towards diversion and inclusivity.
How to go about a DEI audit?
1. Assemble a diverse and inclusive audit team
Before establishing that the company has a diverse and inclusive workforce and culture, it is necessary to have a diverse and inclusive audit team that can represent different demographics, roles, and levels within the organization.
This diverse team will bring varied perspectives, experiences, and insights at the time of audit that ensures a comprehensive audit process of the company's DEI initiatives.
2. Define the scope and objectives
Any audit process should have a clear and defined scope and objective to start with. Clearly state the scope and objectives of the DEI audit of the specific organization.
Determine the specific areas that need to be assessed, such as hiring practices, promotion process, pay equality, training programs, company culture, and employee grievances and resource groups.
Setting clear goals will help keep the audit focused and aligned to objectives at all times.
3. Gather data and metrics
Next step is to collect all the relevant data and metrics needed to evaluate the company's DEI performance.
This includes existing HR records, employee surveys, exit interviews, and other sources of information that can provide insights into the organization's diversity and inclusion landscape.
Analyze this data by gender, race, ethnicity, age, and other relevant dimensions to identify the level of inclusion or the disparities and trends.
4. Conduct employee surveys and focus groups
One of the important steps to conduct audits is to engage the employees and collect real time data.
Make employees participate in the DEI audit process by conducting anonymous surveys and focus groups. Ask for honest feedback on their view on diversity and inclusion in the workplace, including any challenges they face or suggestions for improvement.
This qualitative data along with the previous quantitative data will provide a deeper understanding of the employee experience.
5. Review policies and practices
Now that a fair idea of the company's inclusivity and diversity standard has been established, it is critical to check back on the company's policies and practices.
This is to be done to identify any potential biases or barriers that may be present in the company and that hinder diversity and inclusion. Focus on hiring practices, performance evaluations, promotion criteria, and grievance procedures.
Additionally, the audit team should check on the accessibility of workplace facilities and accommodations for employees with disabilities, pregnant and new mothers etc.
6. Assess training and development programs
Training and Development is an important part of HR and auditing this function helps provide equal opportunity for all employees.
Check for the effectiveness of the company's DEI training and development initiatives.
These initiatives need to be inclusive, culturally sensitive, and impactful in developing workplace associations and understanding among employees. Identify any gaps in training and a plant to address them must be created.
7. Review leadership and representation
The leadership or the board in the company must represent every group within the company so as to benefit all kinds of workforce.
It is critical to check the diversity and representation of your company's leadership team and board of directors. Identify any imbalances in terms of gender, race, ethnicity, and other dimensions.
A lack of diversity at the management level can signal broader issues with DEI efforts.
8. Benchmark against industry standards
Only by comparing the company’s performance with industry standards, will it be easy to interpret the standing of the company and its efforts.
Compare the organization's DEI practices with industry benchmarks and best practices. This external perspective can help identify areas where your company may be falling short and come up with creative ways to bridge the gap.
9. Identify areas for improvement
In continuation to the step above, once the results are compared with industry standards, the audit team can prescribe ways to improve the ratings.
Based on the audit findings, identify specific areas for improvement and provide recommendations. Prioritize those initiatives that address the most critical DEI gaps so that they align with the company's overall goals and objectives.
10. Develop a DEI action plan
Based on the audit findings and results, implementation of recommendations is the next step.
Create a comprehensive DEI action plan that outlines the steps, timelines, and responsible parties for implementing the recommended initiatives.
Involve all key stakeholders in the planning process to ensure a sense of responsibility and commitment to the proposed changes.
11. Foster accountability and transparency
It is important to stay on track continually after the audit. Establish a mechanism to track progress, measure success, and hold the concerned parties accountable for the DEI commitments.
Regularly communicate updates and achievements to all stakeholders so as to demonstrate your dedication towards a diverse and inclusive workplace.
12. Continuously iterate and improve
DEI is an ongoing journey, not a one-time effort. Continuously review and update your DEI action plan as you make progress as and when you meet new challenges.
Regularly conduct follow-up audits to check for the impact of your initiatives and identify areas for further improvement.
Conclusion
We hope this blog helps HR teams and senior management to help build a diverse and inclusive workplace and by conducting a DEI audit, you are one step closer to creating a more diverse, equitable, and inclusive workplace.
Everything lies in data and the details and therefore, gathering honest data from employees, regularly updating policies and procedures and aligning company goals with diversity and inclusiveness is of utmost importance.
Remember, the DEI journey requires dedication, open communication, and a willingness to learn and evolve continuously.
