Survey of HR Leaders by Equilar and the HR Policy Association Reveals that Most Companies Set Internal Diversity Target Percentages in the Workforce

A push to increase diversity in management, along with a focus on diversity, equity and inclusion (DEI) in employee engagement surveys, and a belief in the importance of tying executive compensation to ESG, are some of the findings of a survey just released by Equilar and the HR Policy Association.

“Companies are making diversity and inclusion a top priority for 2022,” said Ani Huang, President and CEO of HR Policy Association’s Center On Executive Compensation. “The survey results show that most companies aim for rigorous diversity goals, even if they don’t necessarily tie those targets to pay.”

To improve overall workplace and leadership diversity, companies are setting aspirational targets to hire or promote qualified underrepresented employees and engaging in widely recognized affirmative action practices. Many companies require a diverse slate of candidates for all roles, with about half of all companies requiring diversity in management roles specifically.

“The joint survey provides more granular data on how companies are addressing these critical issues,” said David Chun, CEO and Founder at Equilar. “The insights shared by CHROs at surveyed organizations show the varied methods companies use to drive employee engagement and diversity initiatives, the importance of ESG and candid thoughts on tying ESG metrics to compensation.”

See related article: Walmart releases annual Culture, Diversity, Equity & Inclusion Report

In total, 93 responses were collected in May 2022, with topics covering current ESG and human capital management (HCM) practices.

• Regular pay gap analyses are becoming the standard. 71.9% of survey participants reported performing pay gap analyses periodically, either annually or otherwise.
• Most respondents approve of tying executive compensation to ESG issues. Although their companies may not have taken this step yet, most participants felt that tying executive compensation to ESG issues was at least moderately important, with some saying it was very important. In their reasoning, respondents cited accountability, focus and the importance of measuring in order to make progress.
• However, only two out of five respondents currently do so. 41.6% of survey participants tie ESG to pay in an explicit, quantitative way. A third of survey participants said they don’t currently tie ESG metrics to the annual plan at all, with another 19% including ESG metrics but not setting explicit goals.
• Employee engagement surveys highlight DEI topics. 90% of participants reported conducting a periodic employee engagement survey. When asked which topics they highlight in engagement surveys and discussions, 87% said they focus on DEI topics. 81.5% focus on current business and operational issues, with 79.4% highlighting mental health and well-being.
• A push for women and people of color in management. The most common approach to promoting diversity in the workforce was increasing the number of women and people of color in management roles by setting specific percentage targets, with 71.4% focused on women and 62.5% on people of color.

Source: Equilar