The conversation around diversity, equity, and inclusion has become increasingly polarized, with recent discussions in the US and at Davos amplifying hyper-masculine perspectives. Yet, the reality remains clear: inclusive workplaces are essential for strong business performance. The question is, how can investors build inclusivity in a way that resonates globally, even amid evolving societal attitudes?
For companies of all sizes, DEI shouldn’t be about following trends or ticking boxes. It’s about delivering measurable business impact – reducing hiring costs, driving higher performance, and capturing greater market share. No buzzwords, labels or fluff.
If DEI feels like a divisive term, it’s time to reframe the conversation. The real challenge isn’t about meeting quotas; it’s about uncovering potential structural barriers that prevent organizations from reflecting the diverse client base they serve.
While demographic data can provide useful insights, it only paints part of the picture. Many companies default to tracking singular identity metrics, like gender or ethnicity, because they’re the most readily available. But people don’t live within single-category boxes. Identity is complex, and relying solely on these figures risks oversimplifying the issues at play.
Whether or not a company publicly embraces DEI terminology, tracking the right indicators is critical for long-term competitiveness. Here are five KPIs that can guide that effort:
Analyze staff turnover
High turnover is costly, disruptive, and often a symptom of deeper organizational issues. Take a closer look at who has left your company over the past 24 months. Do you see patterns? For instance, if mid-career professionals are leaving at higher rates, it’s worth investigating the underlying causes.
Exit interviews, paired with robust HR data, can help uncover these trends. Reducing turnover isn’t just about cutting costs; it’s about retaining institutional knowledge, safeguarding team stability, and staying competitive. If top talent consistently moves to competitors, those competitors will likely outperform you, too.
Examine the candidate pipeline
Your hiring pipeline directly shapes your talent pool. If your recruitment efforts consistently reach the same networks, you’re limiting your chances of finding the best person for the job.
Analyse where your job postings go – are they visible across diverse platforms, or confined to familiar channels?
Just as importantly, look at who’s involved in the hiring process. Including a mix of perspectives on interview panels can help mitigate unconscious bias and signal to candidates that your organisation values diverse talent.
Track promotion trends
Hiring diverse talent is only the first step; retaining and developing that talent is what drives long-term success. Take a close look at who’s being promoted within your organization. Are career advancement opportunities distributed fairly across teams and demographics? For instance, are those with caregiving responsibilities advancing at similar rates to their peers?
Monitoring these trends can also reveal gaps in professional development and training programs. When employees see a clear, attainable path for growth, they’re more likely to stay – reducing turnover and building a stronger, more dynamic leadership pipeline.
Measure employee engagement
Engaged employees are more productive, innovative, and committed to your organization’s success. But engagement isn’t uniform across teams. Use surveys and feedback tools to assess factors like job satisfaction, sense of belonging, and access to resources. Then, go a step further: segment the data to identify potential gaps. Are remote employees feeling disconnected compared to their in-office colleagues? Do newer hires feel as supported as tenured staff?
Spotting these patterns early allows you to implement targeted improvements – whether it’s enhancing communication, introducing more flexible work arrangements, or addressing team-specific challenges.
Low engagement isn’t just a morale issue; it’s a performance risk. Disengaged employees are less productive, more likely to leave, and can undermine team cohesion.
Assess market relevance
As mentioned earlier, representation goes beyond internal metrics. It extends to how the organization connects with the outside world. Does your leadership, products, or services reflect the diversity of the customers you serve?
Companies that fail to mirror their markets risk losing both relevance and revenue. Customers increasingly expect brands to reflect their values and experiences. From the voices guiding product development to the diversity of perspectives in the boardroom, representation directly influences a company’s competitive edge and growth potential.
From rhetoric to results
For investors, the responsibility is clear: it’s not about supporting labels or virtue signalling. Inclusive practices help reduce costs through improved retention, drive performance by fostering innovation, and capture market share by aligning with customer expectations. These are the conversations investors should be driving with their portfolio companies.
Mikaela Murekian is a PhD Researcher at Bayes Business School and a fractional ESG advisor.
