UK start-up HR DataHub has released what it claims to be the world’s first data-led diversity and inclusion (D&I) index, to help firms objectively benchmark the employment details of people from underrepresented groups.
The D&I Index has been designed to measure the effectiveness of a firms’ diversity and inclusion policy, helping leaders understand where and how their firms can improve, by drawing comparisons with their rivals and setting actionable objectives to help firms improve their approach.
A firm’s progress can be tracked across five key characteristics including gender, age, ethnicity, disability, and LGBTQ+, and will report across four fundamental measures: representation by responsibility level, tenure, talent area and pay differentials.
The index, which is set to go live at the end of January, was devised by David Whitfield, a former HR Rewards director who worked for Heathrow Airport, DHL and the Post Office before setting up benchmarking data start HR DataHub three years ago.
Whitfield was the first to acknowledge his own privilege in a post last week on his LinkedIn page. He said: “I am a white, middle-class, middle-aged man with all of the privilege that has come with that. I have worked incredibly hard and taken lots of risks but never faced adversity or discrimination.”
What Whitfield has observed over the years, however, is the inconsistent approach many companies have taken to measuring diversity and inclusion targets – with employers often formulating policies “based on gut instinct rather than empirical evidence.”
Whitefield hopes to use big data and technology to resolve this issue, targeting one industry at a time.
The D&I Index enables a supermarket retailer client, for example, to submit anonymised employee data (based on age, pay, role, start date, function etc) as well as two completed surveys: one on its own D&I policy and practices and another based on a data-driven framework provided by the Centre for Global Inclusion.
Feeding this data into HR DataHub’s own Microsoft Azure-based platform, the index uses algorithms to crunch the data and allocate scores based on how well the firm is performing in terms of representation.
Comparative analysis
According to Whitfield, where the index gets interesting, and is perhaps most helpful to industry, is when all or most other firms within that sector also agree to participate, enabling a comparative analysis of rivals.
“At that point we can go across, and look at what their competitors are doing. If our client was a Tesco, for example, then what does the shape of Morrisons, Sainsbury’s and Asda’s data look like? The algorithms assess this and assigns confidence scores based on their performance,” Whitfield explains.
In areas where the client is underperforming, over 100 actionable points can then be pulled, based on the best proven practices of peers who might be performing stronger in certain areas.
This is where Whitfield thinks the index will have a lasting impact: “We are trying to get companies to action these insights because that’s how you can really make a difference – it’s looking at where you are today from a D&I perspective as well as where you can get to and how you can get there,” he says.
Whitfield maintains that getting rival firms to part with their anonymised D&I data is not as challenging as it might sound. “Generally, when one signs up, we invite the others to follow and they tend to do so,” he says.
When focussing on a new sector, Whitfield adds that as an added incentive, his seven-strong firm will often offer up their general HR benchmarking services for free first on short term projects, to maximise the number of companies it is able to forge relationships with.
Diverse backers
HR DataHub currently works with 300 companies (the average comprising of 5000 full time staff) and is strong in hospitality, retail, logistics, energy and renewables as well as the defence and charity sectors. It currently has 100 companies signed up specifically for the D&I index and is aiming initially for data profiles of one million employees.
Firms lending their names to the index include Pennon Group, BAE Systems, Bright Horizons, Phoenix Group, Reward Gateway and M&S, who are all listed as sponsors.
The platform has also collaborated with an array of diversity stakeholders who have all helped shape the index, including the Black British Business Awards, the CBI-backed Change the Race Ratio; The Network of Networks, gender diversity organisation the 30% Club as well as disability specialist Shani Dhanda.
Sophie Chandauka, executive founder and chair of the Black British Business Awards said that the Index’s insights would help business leaders understand where faults lie, track progress and make changes for individuals on a personal level and the UK economy as a whole.
She added: “The D&I Index will be critical in influencing industry leaders to measure what matters and leverage analytics to diagnose and resolve issues through targeted investment.
“This evidence-based approach is critical to accelerating the development and evolution of workplace cultures that enable all talented employees to thrive.”
APIs
The next step in the index’s roadmap is to use APIs to interface between HR DataHub’s database and their clients’ human resources systems (HRS), which would enable real time reporting rather than going through the clunkier current process of downloading an excel data file that reveals a static snap shot of a company’s D&I.
The reason this hasn’t happened already also boils down to inclusivity: Whitfield points out that APIs are expensive and complex to install because of the level of security afforded most HRSs – raising the barrier to entry for smaller firms.
The SAAS-based company is trying to keep to current subscription fee levels of £5,000 per year.
As the tech evolves however, and more firms join, Whitfield has ambitions to create a rich resource of data to help D&I thrive in industry.
“Once we have over a million employees represented in the database, we’ll be able to look at things such as the proportion of people with disabilities; the gender pay split and what the differentials in pay are; or what’s happening in the tech industry and women in certain roles – it’s going to be such an incredible goldmine of data with so many insights.”
Share
