Diversity Data: Benefits and Importance in the Workplace

Diversity data refers to a data set of information that contains the characteristics of the workforce. Diversity in the workplace is the need of the hour. This reason is that diversity in a workplace comes with immense benefits. But in today's day and age, claims must be backed with proof. This is where diversity data steps in. Today, experts collect diversity data and use it to analyze the concrete benefits of diversity in the workplace. This is done in the form of quantifiable statistics growth and performance. They can also use this data to set future goals to teach diversity in the workplace.

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What is Diversity Data?

Diversity data may include different identifiers such as age, gender identity, ethnicity, sexual orientation, disability status, and marital status. Diversity data is based on the different protected characteristics of your workforce and job seekers. Thus, it's a way of gathering information about people's ethnicity, sexual orientation, disability status, gender identity, and so on. Since this data contains some very private information, it is always collected anonymously. Thus, it cannot be used to identify or single out employees in the workforce. It can only be used to create general statistical information regarding the workforce.

Due to the success of collecting and analyzing this data, several big companies have now started establishing diversity and inclusion departments as part of their Human resources teams. These departments are tasked with increasing diversity in the workforce and creating inclusive policies that ensure the benefit of the diverse workforce. 

Benefits of Diversity Data in the Workplace

The benefits of the collection and analysis of diversity data are multifold. Analysis of diversity data has highlighted several benefits, such as increased innovation, productivity, and motivation in the workforce. The following are some of the top benefits seen through analyzing diversity data.

• Increase in employee trust, engagement, and motivation

A diverse workforce ensures that all employees are seen and included. This can increase their engagement with their work because they feel satisfied in their work environment. Diversity data also highlights that individuals working in diverse work environments are likely to have better physical and mental health. Further, a diverse and inclusive work environment also improves superior-subordinate relationships as it fosters a sense of trust amongst the company.  

• Encourages innovation and new perspectives 

Increased employee satisfaction can, in turn, lead to innovation for the company. Further, hiring diverse people ensures that new perspectives are brought forth. Both innovation and new perspectives are important in the competitive market, and diversity can help improve both. Thus, diversity can be considered the new competitive differentiator for companies. 

• Improves decision-making process

Diversity has also resulted in better decision-making and overall improvement in the process. Better decision-making can be attributed to the fact that the decision is made with diverse perspectives. Along with improved decision-making abilities, workplace diversity also leads to more engaging discussions during the decision-making process. This can thus improve the overall decision-making process and outcome.

• Increase in profits and business expansion

Apart from being excellent for employee satisfaction, ensuring diversity is also profitable for the company. A rise in profits is a direct result of innovation and employee satisfaction. Leading data analysis firm Mckinsey has found a direct link between increased business earnings and senior management diversity. 

Collecting and analyzing diversity data in a workplace  

The multiple benefits of diversity data highlight the need for collecting and analyzing it. However, a company can face several issues while collecting such data. These issues include:

• Valid concern regarding employee privacy
• A lack of clarity regarding the reason for the collection of data
• Lack of an established protocol for data collection
• Presence of certain trade secrets that are hard to divulge
• Lack of resources or experts for data analysis.
• Need for statistical experts to analyze the data. 

So here are some tips and tricks that companies can use while collecting diverse data that will help them achieve the desired collection objective. 

1. Inform employees and job applicants that their data is being collected

It is extremely important to inform employees and job applicants that their data may be collected for analysis purposes. Apart from informing, their consent is also necessary for some extremely personal and sensitive information as everyone has the right to refuse. Failure to do so would result in a violation of their privacy. 

2. Create analysis questions to understand what data to collect

Creating analysis questions for research helps understand what data must be collected from the employees. In general, a basic set of information is collected from employees. But sometimes, while formulating analysis questions, you may come across a specific niche data set of information that needs to be collected.

3. Baseline evidence is important 

Baseline evidence is an equally important part of diversity data. Baseline markers refer to benchmarks identified from the workforce that can later be used for comparison. These benchmarks show change over a while and thus can be used later to evaluate the success of future initiatives. The baseline evidence is also useful for creating the habit of diversity data collection. 

4. Ensure compliance with data regulations

There are several different regulations concerning data collection and privacy. Some regulations make it necessary for the company to either store data securely or even ask for informed consent from the data giver. All these different regulations are important, and the company must ensure that they comply with these regulations. 

Challenges associated with diversity data 

Here are a few challenges faced in diversity data:

1. Lack of data collection 

While there is no argument that diversity data is an important aspect of diversity practices, there are also challenges associated with it. There may be instances where companies practicing diversity in the workplace do not value diversity data. This is usually because of the cost of collection, the human resources required to do it, and the expense of getting expert analysis. Simply put, diversity data may not be a priority and thus may not indulge in the collection. This is problematic as by doing so, the company is losing out on the opportunity of finding out the actual effects and benefits of their diversity policy.

2. Need for sensitivity training

By choosing to participate in diversity data collection, employees essentially choose to divulge personal private information. So there is a need to ensure that such collection is done sensitively and professionally. If sensitivity training is not undertaken, information divulged during data collection can lead to unconscious biases and differential treatment. 

3. Ensuring employee comfort and participation

Since employees give out data, it is important to ensure their comfort and active participation in the process. Problems arise when employee data is used for selective special treatment such as promotions or appointments in the name of statistical analysis. This problem can be resolved by creating regulations against such practices and taking employee feedback to ensure the rules are followed. 

Final Word

All companies should create a holistic diversity data policy that addresses several aspects such as diversity data collection, data privacy, and objective formulation. By doing so, they can correctly evaluate the benefits of fostering diversity in the workplace. In the coming year, diversity data will become a crucial factor that distinguishes a company. This is because, in the future, emphasis will be on ethical business and diverse working environments.