How Transparency Can Accelerate Your Diversity Goals
Transparency is a powerful accelerator of change because it encourages accountability, reinforces commitment, and empowers people to advocate for themselves and others. Transparency is particularly impactful for diversity, equity, and inclusion (DEI) efforts because it illuminates inequities and exposes the systems and practices that help these inequities persist.
Here are some examples of how transparency is shaping the landscape of DEI and some steps you can take to build transparency into your strategy.
Diversity Reporting
Many companies have started publicly sharing their diversity and inclusion journey in the wake of the racial justice movement. And some companies have been doing it for years.
For example, HubSpot shares the demographics of its US workforce in the annual Diversity, Inclusion, and Belonging Report that it's been publishing since 2017. Companies who publish these reports are not necessarily doing so because they already have it figured out. In some cases, it's quite the opposite — they acknowledge they have a long way to go.
Excerpt from HubSpot’s 2021 Diversity, Inclusion, and Belonging Report
As you can see above, HubSpot is still challenged to meet its gender representation goals particularly at the leadership level. However, the data also shows that they've made progress over the years, demonstrating their long-term commitment to building an inclusive culture.
Excerpt from HubSpot’s 2021 Diversity, Inclusion, and Belonging Report
The benefits: Publicly sharing your goals and progress demonstrates your DEI commitment to employees, prospective employees, and customers. It also increases accountability for making progress over time.
A first step: If you're not comfortable sharing your diversity data publicly, you can get some of the same benefits by sharing this data with your internal team. Employees will sense a different level of commitment and play a role in pushing the organization further on its DEI journey.
Pay Transparency
One of the most disruptive transparency trends is in the area of pay practices. Historically, salary information has been highly confidential within a company and taboo to talk about among friends.
However, a recent study by PayScale shows that companies with transparent pay practices close the gender pay gap. For example, in this study, director-level women at companies without pay transparency made $0.91 to every $1.00 earned by a director-level man. Conversely, for companies with high levels of pay transparency, the gender pay gap was non-existent.
Over time, one-off pay decisions can result in pay discrepancies that put a company at legal risk and undermine the trust of valued team members. Building more transparency into your system can expose these unintended gaps before they become a problem.
The company Buffer takes pay transparency to the extreme and publishes the salaries of all employees on its website. Buffer’s stated goal is to "create trust, hold ourselves accountable, and serve as a resource for the industry."
Source: https://buffer.com/salaries
The benefits: When pay practices are transparent, it can expose pay gaps that companies didn't even know existed, reducing business risks. It also sparks healthy discussion with employees on how pay is determined and ways to influence the value they contribute to the organization.
A first step: Consider sharing pay bands with your employees. This demonstrates that you have a consistent and data-driven approach to compensation and provides employees with a basis for inquiring about ways to add additional value to the organization.
Industry Sharing: DEI Best Practices
Progress on DEI initiatives have a business benefit, and also have a meaningful impact on society. Sharing things that are working can help other companies accelerate their journey. For example, the CEO Action for Diversity and Inclusion believes that collaboration in the business community is critical to scaling the impact of DEI change. As part of this collective, almost 2000 CEOs and Presidents have committed publicly to a DEI imperative and post actions on the website so others can learn from best practices.
Some companies, like GitLab, make all of their DEI initiatives public on their website so their employees, customers, and partners can see the actions they’re taking to meet their DEI goals.
Source: https://about.gitlab.com/company/culture/inclusion/engineering-initiatives/
The benefits: Sharing DEI best practices publicly shows you care about both the business benefits of diversity and also the impact on society. It builds community by showing that you're a partner in the DEI journey and want to be a part of the broader solution to accelerate DEI progress.
A first step: Consider writing a blog on your company page about something you're doing in your DEI journey that's working that could be helpful to another company.
Proactive vs. Reactive Transparency
The examples above highlight proactive steps companies are taking to increase transparency. However, there's increasing external pressure to make transparency mandatory. For example, Nasdaq has proposed requiring all companies listed on Nasdaq's US exchange to disclose data on the diversity of their board of directors. In addition, the CFA Institute has recently published recommendations on a global standard for ESG reporting for investment products, including sharing data on personnel and hiring.
The bottom line is — the transparency trend is not going away. Taking small steps today to increase transparency will not only accelerate progress on your DEI goals, but also prepare you for inevitable disclosures in the future.
