Blog Post

Key Insights from the 2019 Inclusion Index

By Barbara Frankel
June 26, 2019

Now in its third year, the Seramount’s Inclusion Index provides information to help organizations understand gaps in demographic representation and is a strategic roadmap to drive internal change to find and implement D&I solutions.

This year, the number of participants increased by more than 17 percent with 148 sharing their data.

Participants are scored in three areas:

  1. Best Practices in recruitment, retention and advancement of people from under-represented groups—women, racial/ethnic minorities, people with disabilities, and lesbian, gay, bisexual, transgender and queer (LGBTQ) people.
  2. Creating an Inclusive Culture through leadership, accountability, communications and employee engagement.
  3. Transparency in willingness to share Workforce Demographic Data.

When this index was started three years ago, its purpose was to challenge organizations to raise the bar and drive change. To encourage participation, we gave organizations credit for sharing their demographic data with us, regardless of what that data showed.

But the bar has been raised considerably in the past three years. So we now give some points for sharing data (transparency) but increasingly award more points for having diversity (by race/ethnicity and gender) in senior levels and in areas of hiring and promotion.

An index, unlike a list, does not have a set number of organizations to recognize. In an index, a threshold percentage is set, at which point any participant with that percentage or better qualifies for the index. Seramount determined that 80 organizations scoring 60 percent and above should be recognized for their high-quality diversity and inclusion work, and named them Diversity Best Practices Inclusion Index members.

A second threshold at 75 percent recognized 15 of them as Leading Organizations that had superior achievement. This year, we decided to recognize 14 companies that were our top 10 percent highest scores for their exemplary work.

The thresholds were slightly lower this year as we took into account the greater challenge of more competition and emphasis on representation. The goal is to create a reasonable baseline to assess progress through demographics over the next few years.

Key findings from the 2019 Diversity Best Practices Inclusion Index:

Best practices in recruitment, retention and advancement: 

Programs and policies that help organizations find, engage, retain and promote diverse employees are increasing and are strengthened by inclusive company cultures and more management accountability for results. Yet we note there remain best practices that still are not widely utilized, even by organizations on this index.

For example, hiring is significantly impacted by the diversity of the candidates as well as those conducting interviews. While 100 percent of the Top 10 Percent require diverse candidate interview slates (compared with 93 percent of the Leading Index and 73 percent of the Index), only 71 percent of the Top 10 Percent (vs. 55 percent of the Leading Index and 43 percent of the Index) require the panel of interviewers is diverse.

On the retention side, employee-resource groups (ERGs) increasingly play a critical role in understanding the challenges and needs of employees from under-represented groups. Almost all the Top 10 Percent, Leading Index and Index organizations use these groups to connect with professional organizations and host events.

Ninety-three percent of the Top 10 Percent provide learning and talent development opportunities for ERG leaders, compared with 90 percent of the Leading Index and 81 percent of the Index.

For advancement, we note the increased prevalence at these organizations of formal mentoring and sponsorship, as well as requiring diversity in executive succession planning initiatives. For example, all the Top 10 Percent have formal sponsorship, compared with 72 percent of the Leading Index and 56 percent of the Index.

Inclusive Culture 

Accountability matters, especially from top leadership. There are increasing correlations between diverse representation at all levels when managers’ and leaders’ compensation are tied to these results. But there remain a lot of organizations that haven’t made this connection yet.

All the Top 10 Percent hold managers accountable for D&I results, compared with 97 percent of the Leading Index and 75 percent of the Index. However, only 64 percent of the Top 10 Percent compensate managers for D&I results, compared with 55 percent of the Leading Index and 35 percent of the Index.

Transparency and Demographics

As noted above, for the first time this year, the Inclusion Index assessed overall growth, particularly at senior levels, to evaluate the participants. The numbers show there’s still plenty of room at the top, especially for Latina/Hispanic women.

For example, while white women are 26 percent of direct reports to the CEO at Top 10 Percent organizations (and 25 percent at Leading Index and 27 percent at Index organizations), Latina/Hispanic women have no representation at that level at Top 10 Percent organizations and only 1 percent at Leading and Index organizations.

About the Author

Barbara Frankel
Managing Director, Insights