Organizations have allocated millions toward improving DE&I efforts. The DE&I diagnostic, in particular, has become a popular practice to assess workforce diversity—but diagnostics may no longer be enough.

Enter the equity audit—a process that enables companies to see whether they have successfully practiced what they preach when it comes to representation across all stakeholders. “The game has changed and a DE&I diagnostic is not sufficient,” says Alina Polonskaia, Korn Ferry’s Global Leader of DE&I. "Stakeholders are requiring you to look at equity—not only at employees.” Polonskaia advises organizations to be proactive about conducting audits with trusted partners, lest companies have a more punitive, public process forced upon them by activist shareholders.

With nearly half of US millennials being non-white compared to a quarter of boomers, leaders are beginning to take note of the changing winds. “There’s definitely been a recent increase in audit interest,” says Flo Falayi, a Korn Ferry client partner who designs and develops inclusive leadership programs. And yet, with only 1% of Fortune 500 CEOs being African American and just 10% being women, there’s still work to be done. Experts say an audit can shed light on exactly where and how.

To be sure, the current cutback climate has impacted DE&I resources, and audits aren’t exactly cheap. Andrés Tapia, Korn Ferry Senior Client Partner and DE&I Strategist, urges a shift in perspective. “Don’t think of it as an expense. Think of it as an investment,” says Tapia, who cautions that the risks of not properly assessing a organization’s diversity status can lead to low morale issues and even resignations.

Diversity, Equity & Inclusion

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Our DE&I Maturity Model measures an organization's DE&I maturity across five strategic dimensions: risk management, awareness, talent integration, operations integration and market integration. This typically includes a metrics check that details overall representation, segmentation of representation, promotions, and voluntary and involuntary exits. It also provides data and insights from surveys, focus groups, and interviews regarding employee experience, perceptions of inequity or equity by demographic, and whether any procedures and policies perpetuate exclusion both within a company as well as its community of stakeholders.

If you’ve signed on for an audit, however, don’t pat yourself on the back just yet. Our experts say that audits can be challenging to conduct effectively when those who might benefit from the status quo within an organization hamper the delivery of accurate information. “Some people forget that the essence of inclusion applies to all—it’s a win-win,” says Falayi. He advises leaders to properly articulate this positive value proposition to all within an organization before an audit begins.

On the flip side, experts say a company might be incredibly diverse and keen to run an audit only to discover during the process that it has good behavioral inclusion but not structural inclusion—meaning, for example, that the workforce is diverse but there are no people systems to support their upward growth and advancement. “Whenever a company’s people systems are immature, everyone suffers, but minorities suffer more,” says Tapia.

Tapia posits that if you’re a strategic leader, you know that DE&I is going to give you a competitive advantage and be your differentiator to both employees and customers alike. “If you’re serious about being more diverse and inclusive and you’re not there yet, an equity audit will tell you why you’re not there—and how to get there.”

To find out how we can help you build a more diverse, equitable, and inclusive organization, contact one of our experts today.