Diversity audits are an incredibly valuable tool for any company pursuing DEIB initiatives. Conducting this audit is the first step in reaching almost any diversity goal, whether that’s related to diverse hiring or altering your company culture. The resulting insights go beyond gender and race, shedding valuable light on things like employee satisfaction, promotion rates, pay gaps, burnout, and other important elements related to attitudes at your organization. 

What Is a Diversity Audit?

A diversity audit seeks to measure the representation within a company of various demographic groups. The main reason for conducting a diversity audit is to meet the goals set for a DEI program. Unless the company has just been founded, it already has a certain mix of employee demographics. The purpose of the audit is to analyze the presence or absence of demographic groups, see if this meets DEI targets, and if not, to alter hiring, promotion, and retention policies to eventually reach the desired diversity levels. 

Diversity Is Only the Beginning

Achieving diversity in a company is merely the first step. According to the principle of DEIB, the next phases are:

• Equity. This means ensuring that all employees receive the resources and opportunities needed so that there is equal representation at all hierarchical levels and across company functions. 
• Inclusion. Leaders should encourage employees to share their points of view on a wide range of issues, receive positive feedback about such contributions, and that their ideas are honestly considered. 
• Belonging. The ultimate measure of DEI success is if and how employees feel as though they belong. Do they feel respected? Is their self-identity being acknowledged by others? Are they progressing upwards and getting the conditions of employment that they want?

This may seem like a long process, but the benefits are worth it. According to Indeed.com, diversity leads to improvements in problem-solving, decision-making, profitability, turnover rates, and corporate branding.

The Challenge of Diversity Audits

Like a financial audit, diversity audits rely on certain processes to collect and analyze the reality on the ground at a company. However, diversity audits can be even more comprehensive and frequent, because it is quite difficult to achieve a truly diverse workplace. 

The simplest diversity benchmark is gender, which should be split evenly between men and women because that is the natural level universally. However, many other measures of diversity depend on:

Physical Location

An inclusive workforce is often supposed to represent the demographic profile of the local society (unless other goals are declared). If a certain population is totally absent in an organization but is present locally, that will affect hiring and retention goals. 

Social Change

Immigration, an ageing population, and cultural trends can influence the ethnic and social mix of a diverse talent pool while also changing the way in which people self-identify. After all, the “B” in DEIB is about belonging. This means that it’s up to your employees to decide if DEI initiatives have made them feel comfortable, and that depends on how they want to fit into cultural categories, which can change over time.   

Strategic Moves

Sometimes, executive teams set diversity goals for the organization. This might be the result of a need for certain workplace skills upon a change in strategy. Or it could be that DEI training has made its mark on your company’s top leaders, who now want a better DEI culture. 

The meaning for diversity management professionals is that diversity audits need to be conducted frequently. Similarly, the benchmarks that they use (which may have been set during a diversity hiring process) should themselves be audited to match the influence of the above issues. 

Conducting a Diversity Audit

Diversity audits are a combination of quantitative and qualitative information that is gathered in various ways and supported by a number of tools. Let’s have a look at the basic process:

Data Collection

There are many opportunities for gathering information related to diversity. You can have both veteran and new employees take part, but surveying job applicants is also important. Even if they don’t make it through the hiring process, it is valuable to see what types of people are responding to your diversity hiring initiative. If a certain target group is generally not accepted, then part of a diversity audit is finding out who. 

Remember as well that diversity data can be seen as confidential. Even the choice of gender on any data collection form needs to be left up to the applicant/employee. So it’s a good idea to officially state that any personal data that you collect on a diversity audit form remains confidential and anonymous. This prevents the abuse of personal information and also makes the employee feel more comfortable sharing the details of their identity. 

That being said, collecting information in a public setting also has its value. These settings can be one-on-one interviews with HR and direct managers, exit interviews, workshops, employee resource groups, and team meetings. Just tell employees that they only need to mention personal details if they feel comfortable.

Types of Information

During the data collection phase, the goal is for people to list the many ways in which they identify so that you can see how diverse your employee population is. For a diversity audit, you’ll want to include as many categories as possible so that the employee feels included. But make sure to leave space for additional descriptions because the modern concept of identity is always changing. Examples of this are the various categories of 2SLGBTQQAI+ and the fact that there are dozens of gender pronouns, while the list is always growing. The most common diversity categories include:

• Ethnicity
• Gender identity
• Sexual orientation
• Age
• Religion
• Birthplace
• Nationality
• Physical ability
• Economic status

Besides self-reporting about identity, you can include other questions on a diversity audit form. For example, this is a good opportunity to collect data about rates of job satisfaction that you might also link to DEI programs. Or you can ask employees about how they see your DEI program working in general by, for example, commenting on the diversity levels of other employees or how different employee categories do in terms of promotion and salary.  

Reporting and Revision

Once you have collected and analyzed the results of the diversity audit, it’s time to report them. How do you actually compare to the benchmarks that you have set? There will likely be some significant gaps between what the audit tells you and the goals you have set. This is a good time to discuss making (additional) changes to hiring practices, retention strategies, and promotion priorities. Then run the process again. 

Diversity Audit Tools

Surveys and other research methods for a diversity audit come in a variety of forms. Here are a few helpful diversity audit tools that give insight into specific aspects of the subject:

Equality Impact Assessments

An equality impact assessment (EIA) is often distributed upon the start of a new business initiative. It is intended to check if that initiative will have negative effects on underprivileged populations within a company. It is usually issued based on a template, although some organizations will customize the questionnaire for your needs. For instance, if you suspect that a move might have a greater impact on women than on men, the EIA can focus on that issue. 

Pay Gap Analysis

Traditionally, pay gap analyses looked at the difference in salary between genders, often with a view towards men and women with the same role in a company. This tool is now being used to assess pay discrimination for a variety of diversity groups. Keep in mind that a pay gap analysis is only the first step towards resolving differences. If a gap exists, you then need to determine why. For example, in some companies, people with a university degree are paid more than those without as an official policy.  

Diversity and Inclusion Diagnosis

Whereas a diversity audit seeks to provide a wide overview of diversity issues in an organization, a DEI diagnosis looks at specific areas. You can apply a diagnosis to issues such as hiring, satisfaction rates, feedback reports about employees and managers, burnout, and engagement rates. Two of the most popular types of diversity and inclusion diagnoses are applied to:

• Retention rates. The effect of diversity on retaining employees has been studied extensively, including in the academic world. According to this research paper, “there is a strong synergy between workplace diversity and employee retention and workplace diversity and organizational culture”. Retention is particularly important to examine because it can reflect a bad employee experience due to discrimination, or not feeling that they belong. 
• Promotion rates. Promotion rates reflect what happens to employees after they pass through the hiring phase, where HR has a lot of control. After that, their experience is more about equity and inclusion. If you notice that diverse populations are not being promoted at the same rates as privileged employees, this could mean that your diversity goals are being met, but not those for equity and inclusion. In this case, you might have to give serious consideration to revamping organizational culture.  

Skills Related to a Diversity Audit

HR teams are not the only ones involved with a diversity audit. Everyone needs to do their part. For example, you might use a diversity audit to ask employees in general about the effectiveness of DEI initiatives. Similarly, direct managers are essential for keeping an eye on diversity-related issues and making sure that their employees are being treated fairly. It’s worthwhile to initiate L&D programs that will help all stakeholders more effectively participate in a diversity audit; boosting skills like the ones mentioned below are an excellent place to start. 

Data Collection, Analysis, and Reporting

Survey design, distribution methods, statistical and qualitative analysis, and results reporting are all necessary for a diversity audit. Many HR professionals rely on traditional methods for these functions, such as Excel models and manually written surveys. Now is the time to turn toward artificial intelligence, such as in the form of workforce analytics, as an important part of your diversity data approach. 

Strategic Planning

A diversity audit is always part of a larger strategic picture. Beyond diversity initiatives, companies might use DEI programs to increase teamwork, enhance productivity, etc. These strategies often come from the executive level, and HR needs to know how to do its part. In terms of “big picture” ideas, this means that senior human resource leaders should be able to understand how strategic changes will affect them and what this means for daily operations. 

Leadership

Leadership is always a valuable skill, and applying it to DEI is critical. At Growthspace, we define a leader as “someone who motivates, provides advice to, or influences others – even without an official leadership position.” This role includes exposing anti-diversity behavior such as racism or sexism, which is what a diversity audit is all about. 

Cultural Competency 

Cultural competency can be defined as “a range of…skills that lead to effective and appropriate communication with other cultures.” It allows people to understand and empathize with people from a variety of backgrounds and is relevant to a diversity audit because, during data analysis, it provides insight regarding why diversity challenges exist within a company (and how to resolve them during the implementation phase.) Like leadership, cultural competency is a skill that should ideally be developed across an organization. However, it is highly complex, so first in line for this type of L&D program should be those involved with diversity management. 

Communication

Active listening, the ability to translate diversity goals into actions for your staff, and explaining the diversity audit process are all important for such initiatives. You might want to keep a written record of the approaches you tried, as well as what succeeded, to build a set of best practices. This will be valuable for the next time you need to conduct an audit.  

Growthspace for DEI Skills Support

Beyond diversity audits, organizations that are part of DEI initiatives usually require extensive skill development. This might be to develop soft skills, enhance the professional abilities of underprivileged populations, or revise organizational culture. For every kind of skill, Growthspace provides personalized precision skill development that enhances abilities in record time and with maximum effectiveness.