Why should companies prioritize tracking certain diversity and inclusion metrics? How are these metrics important for a company’s long-term success and growth? Read more to learn about how the HACR Corporate Inclusion Index (CII) helps companies develop a road map to success by serving as a benchmarking tool that allows them to measure the outcomes of their diversity and inclusion practices, regardless of where they are in their diversity and inclusion journey.
Why is tracking diversity and inclusion metrics so important for companies? Every year, the Hispanic Association on Corporate Responsibility (HACR) aims to delve deep into this question through the release of the HACR Corporate Inclusion Index (CII) report. The HACR CII survey assesses companies on their inclusiveness of Hispanics and is meant to serve as a benchmarking tool that allows companies to measure the outcomes of the programs and practices they have in place in each of HACR’s four pillars:
- Employment (employee demographics, ERG efforts, professional development initiatives)
- Procurement (change in spend with Hispanic suppliers, tier II supplier spend, supplier development initiatives)
- Philanthropy (contributions to the Hispanic community, volunteer hours, dollar value of volunteer hours)
- Governance (board composition, corporate leadership trends, diversity and inclusion structure)
The HACR CII is a robust tool that companies can use to create a roadmap that builds on diversity and inclusion efforts. The HACR CII consists of over 150 questions created by the HACR Research Institute (HRI) over years of research and conversations with Fortune 500 companies about their diversity and inclusion practices and the measures in place to evaluate their progress. The conversations that HACR has had with participating companies throughout the years it has been conducting the HACR CII, has revealed a number of interesting themes and trends. To this end, HACR is pleased to announce the release of the 2019 HACR Corporate Inclusion Index report. The theme of this year’s report is tracking and the important role it plays in the development of diversity and inclusion policies and practices in Corporate America, regardless of where they are in their diversity and inclusion journey.
THE IMPORTANCE OF TRACKING IN EMPLOYMENT
Meaningful Hispanic inclusion in Corporate America demands that companies continuously evaluate the processes and systems they have in place to recruit and retain Hispanic talent. Diverse employee recruitment and retention isn’t just the right thing to do, it’s the smart thing to do. Diversity of thought and talent is, and will continue to be, essential to innovation and a company’s ability to remain competitive. In today’s increasingly competitive talent marketplace, proactive tracking is crucial to talent recruitment and retention, as well as leadership pipeline development. Employee retention is an especially important priority for companies, as replacing employees is an expensive and time-consuming endeavor. As long as companies fail to meet the needs of diverse employee populations, they will continue to fail to create opportunities for them to contribute fully, and, in the long run, this will hurt Corporate America’s ability to remain competitive. The HACR CII helps companies systematically track organization-wide demographic changes to help companies better evaluate employment trends, goals, and outcomes, as well as help determine the strength and durability of a company’s leadership pipeline.
THE IMPORTANCE OF TRACKING IN PROCUREMENT
Diversity and inclusion is critical throughout the supply chain as well. For many organizations, the process through which it acquires goods and services from external sources is a vital business function. Conversely, it is also vital to the minority-owned businesses that companies work with. Many companies have yet to realize that tracking procurement metrics for their diverse supplier network could unlock competitive advantages for their organization. The rapidly changing demographic and technological shifts occurring throughout the United States today points to the need for tracking key data points, like spend by supplier demographic groups, at a level of detail that most of Corporate America is not yet equipped to do. Tracking such data points also allows for greater transparency. Ethical sourcing is becoming increasingly important to consumers, and suppliers at even the tier-2 or tier-3 level can have a positive (or negative) reputational impact on the purchasing organization. Transparency also allows organizations to better identify potentially untapped sources of value, thereby increasing their competitive advantage. Investment in these new resource partners can help stimulate the local economies they occupy and accelerate innovation. As these communities grow, so do the organizations that work and invest with them. All of this, however, is only possible if companies first develop effective evaluation and tracking methods at every level of the supply chain.
THE IMPORTANCE OF TRACKING IN PHILANTHROPY
Giving back to the community, whether through service or financial contributions, is crucial in building trust not only with consumers, but with employees as well. Tracking philanthropic give ensures that businesses strategy and community investment opportunities are in alignment. That is, tracking allows organizations, and their employees, to know whether they are practicing what they preach. It also helps organizations determine if and how their time and financial commitments are impacting the communities they serve. For many employees, a company’s philanthropic investments helps give their work meaning and purpose as it is seen as an expression of the company’s commitment to the “social good.” Companies that engage their employees in a variety of ways are ensuring success in the recruitment and retention of talent that will, in turn, help keep them on the cutting-edge. Organizations can also keep their employees engaged through corporate volunteer opportunities and tracking employee engagement metrics. In order to keep their employees engaged, however, companies need to get continuous feedback from their employees on what causes resonate with them. Organizations can accomplish this by partnering with their Employee Resource Groups (ERG) to more precisely target their philanthropic efforts in a way that aligns with their employee’s values as well. For many companies, what is to be gained by building positive brand awareness makes tracking their philanthropic efforts a business imperative.
THE IMPORTANCE OF TRACKING IN GOVERNANCE
Diversity doesn’t start from the ground up; it trickles from the top down. A truly diverse and inclusive organization requires diverse leadership. Corporate governance has the power to determine the sustainability and effectiveness of policies throughout all aspects of the organization. Hispanics remain grossly underrepresented in corporate leadership and board positions, and as long as that remains true, companies will continue to fail to create meaningful, sustainable change within their organizations. Having diversity on corporate boards signals to shareholders, employees, and customers that the organization is knowledgeable about a broad spectrum of perspectives and ideas, and is serious about cultivating excellence across diverse groups. Diverse corporate leadership ultimately provides a competitive advantage by ensuring that all available talent and resources are being utilized to help keep the organization on the forefront of rapid social and economic change.
Tracking ultimately allows organizations to create more detailed roadmaps of where they’ve been, where they are, and where they want to go with their diversity and inclusion efforts. Comprising 16.8 percent of the U.S. workforce, the experiences, culture, and ideas the Hispanic community can bring to Corporate America is vast. A diverse workforce is an innovative one, and there are more reasons than ever for companies to proactively track and develop Hispanic talent and potential partnership opportunities with the Hispanic community. The HACR CII allows organizations to gain more nuanced insights on their diversity and inclusion practices and challenges them to think differently about why tracking certain metrics can be beneficial for them.
To see what else our data showed, download a copy of the 2019 HACR Corporate Inclusion Index report here.