DiversityInc benchmarking reports compare a client company to the DiversityInc Top 10 Index. This document provides rationale for this practice.
- Top 10 Index represents the best in talent management, setting the standard for, inspiring and motivating client companies.
- Top 10 Index identifies problem areas and suggests a clearer roadmap for improvements better than an industry-specific index.
- Top 10 Index is annually updated and represents continuous progress.
- Benchmarking against a specific industry can be counterproductive when a particular industry may have the bar set low.
- A custom index, such as a cherry-picked industry-specific index, may misguide a client’s talent management practices.
- DiversityInc utilizes normalized measurements and statistics (such as “fair ratios”) that are industry-agnostic.
Top 10 Index Represents the Very Best in Talent Management
The Top 10 Index (Top 10) is composed of the 10 companies that occupy the highest positions of the DiversityInc Top 50 Companies for Diversity list. It represents the very best in talent management. It sets the standard for the performance and best practices that all other companies strive for and are measured against.
On average, Top 10 companies have 47.6% women and 31.2% minorities (Blacks, Latinos and Asians) represented in their management. They also have 63.8% of their managers participating in mentoring programs and 40.2% of employees being members of at least one Employee-Resource Group (ERG) (DiversityInc, 2016).
A strong and accountable top-level leadership is another characteristic of the Top 10 companies. Nine companies among the Top 10 have a CEO who personally signs off on executive compensation tied to diversity; on average, 31.5% of a company’s senior executives are sitting on the boards of multicultural non-profit groups.
Figure 1. Performance of Top 10 Compared to Noteworthy
The Top 10 companies are committed to tracking supplier diversity (90% requiring major suppliers to report percentages of spend with Women- or Minority-Owned Business Entities), and they thoroughly audit supplier diversity numbers (100%).
Compared to the 25 Noteworthy Companies For Diversity Index (Noteworthy), Top 10 performs much better. Among the key performance indicators (KPIs) graphed in Figure 1, Top 10 performs at least 35% better than Noteworthy (in case of % auditing supplier diversity numbers). For mentoring and ERG programs, Top 10’s participation rates are more than three and half times of those of Noteworthy’s.
The Top 10 Index’s well-rounded excellence provides benchmarking client companies the roadmap for success by easily identifying problem areas. Close to three-quarters of DiversityInc’s current and recent benchmarking customers chose the Top 10 as their sole benchmarking target.
Figure 2. Benchmarking Target Choice
Choice of Benchmarking Index Is Important
Benchmarking against a specific industry can be counterproductive when a particular industry may have the bar set low. Meanwhile, cherry-picking a custom index can completely misguide a company’s talent development efforts.
The following table illustrates how doing so can misinform. The scenario is from a benchmarking debrief but the data has been altered so the company and misleading index remains anonymous. It is well documented that formal mentoring programs promote management diversity (Dobbin and Kalev, 2016). The Top 10 Index demonstrates the correlation between high levels of participation in mentoring programs and high levels of diversity among management.
In the table below, the “Good” Index represents the Top 10 and the “Misleading Index” represents an industry index, selected to make the company (Company A) look good.
Table 1. Benchmarking Scenarios
|Area/Segment||Company A||“Good” Index||“Misleading” Index|
Hypothetical benchmarking scenarios involving percentage of women.
The index you benchmark against may misguide your talent development efforts.
In this scenario, the Misleading Index indicates a lower level of mentoring program participation but a higher level of diversity in management promotions.
By simply benchmarking against the Misleading Index, the company may conclude that they need to lower the level of mentoring program participation in order to promote more diverse managers — which is contrary to well-documented best practices.
DiversityInc’s main database is constructed from the annual DiversityInc Top 50 Companies for Diversity survey responses. The survey looks into participating companies’ performance and best practices in extraordinary detail. The 2017 Top 50 survey collects the Race/Ethnicity and Gender breakdowns of 29 areas/segments (or 33, for a hospital or health system).
Figure 3. Benchmarking Report Sample Page
Many of the responses (the “raw” data) are then normalized into percentages in order to make the comparisons across companies possible. The percentages are then further converted into ratios. The “fair ratio” as we call it calculates a segment’s minority percentage to that of the base area, usually represented by total workforce or management overall. The fair ratio mathematically removes various company-specific characteristics and is thus industry-agnostic as well. The closer the ratio is to 1.0, the fairer the company.
Table 2 below shows an example of Company B, which recently implemented aggressive talent development programs for women in its management. Despite having smaller percentages of women compared with Top 10 in both the segments of Managers Promoted and Management Overall, Company B is doing an excellent job promoting women in management as shown by the larger-than-Top 10 fair ratio (1.11 vs. 1.04) indicates.
Table 2. Benchmarking Scenarios Utilizing Fair Ratios
|Area/Segment||Company B||Top 10|
(% of Women)
|Fair Ratio of
(36.3 / 32.8)
(49.3 / 47.6)
Hypothetical benchmarking scenario involving a fair ratio. The fair ratio shows the company’s aggressive efforts clearly, despite the larger than 10 percentage point differentials in Women’s representation compared against Top 10 Index.
DiversityInc’s consultants and data scientists examine the raw numbers, percentages and fair ratios, along with many other indicators, correlated with best practices, to make recommendations. Accessing normalized data, combined with the vast amount of domain knowledge DiversityInc has accumulated over the past couple of decades, allows companies to truly evaluate themselves against the Top 10 performing companies in comparable terms — without risking a counterproductive or misguided assessment when attempting to benchmark against arbitrary indices or industries.
The Top 10 Index is a better benchmarking target than an industry-specific index. The Top 10 Index represents the best in talent management. It can point to weaknesses better and provide a clearer roadmap for improvements than an industry-specific index.
Using a cherry-picked custom index may be counterproductive. It can also misguide a client company’s talent development efforts. DiversityInc uses industry-agnostic measurements and statistics. Statistics such as “Fair Ratios” lessen, if not eliminate, the need for an industry-specific index.
DiversityInc (2016) “DiversityInc Top 50 Facts & Figures.” DiversityInc. Vol. 14, No. 1. Pp. 16-19. Also from 2016 DiversityInc Benchmarking Report.
Dobbin, Frank and Alexandra Kalev (2016) “Why Diversity Programs Fail.” Harvard Business Review. July-August. Pp. 52-60.
 The percentages are based on 78 current and recent benchmarking client companies, whose annual contract was active for some time during the past 12 months of this writing.