With diversity, equity and inclusion (DEI) being more publicly recognized and prioritized, billion dollar companies to mom-and-pop shops are all recognizing the value of DEI. While this is exciting, it can be difficult to separate positive from harmful equity work.

Because no two companies are exactly the same, goals that aren’t firmly rooted in company culture can result in more work, waste, and burnout

An equity audit can help your company avoid common pitfalls and design a program that is thoughtful, strategic, and, perhaps most importantly, effective. What is an equity audit?

An equity audit is a structured analysis of company culture, systems, processes, and policies.

The right approach depends on the particulars of your organization, but an audit often includes activities like: company documents review, leadership interviews, focus groups with key stakeholders, and an assessment of how company culture does and does not currently contribute to greater DEI.

Why Your Company Needs an Equity Audit

1. Because You Are Not a Mindreader.

Bad DEI is often the result of the less obvious and unexamined dimensions of company culture. An equity audit is necessary because it gives you the framework to ask the questions necessary to reveal the undercurrents of your company. 2. Your Stakeholders Demand It

In the two years since the brutal, widely publicized murder of George Floyd, the widespread outrage has translated into a demand for more equitable workplaces. Employees, consumers, vendors, partners, clients, and shareholders increasingly demand clear commitment to DEI as a price of entry to do business.

3. It Will Make you a Better Business

There is a benefit to a business’s success. Research shows increased diversity and experienced inclusion leads to higher profitability which supports higher wages, more engaged teams, and reduced attrition and turnover.

The business case is only an entry point to the conversation about diversity, equity, and inclusion. If the business case is the only case, it is likely the buy in will be tied to profitability. It can feel easier to lean on the business case to gain buy-in from shareholders.

At CTP, we understand that focusing on profitability replicates the systems we are aiming to change. When capitalism is at the root of oppression, capital cannot be the solution. When DEI is tied to business results there is the risk that the bottom line will influence prioritization and DEI programs will lose value to shareholders. The DEI mission needs to be tied to a moral standing that prioritizes people and culture change.

4. Talent Demands It

As a result of the workplace changes accelerated by the COVID19 pandemic, many more workers are demanding new ways of relating to work. They are looking for security, freedom, and company values. It is not a surprise that there is a “labor shortage” as workers’ needs evolve.

An audit can help your company access diverse talent, retain employees, and cultivate relationships with happier and more invested employees.

5. People Matter

An audit can help your business contribute to a more equitable world. It is easy to lose sight of an important fact when considering business needs for DEI: people are important. We should all strive to ensure our businesses contribute to the health and happiness of those that it crosses paths with.

How to Recognize It is Time for an Equity Audit

It may feel like an audit is the best next step for your company. Here are a few ways to tell.

1. You Aren’t Sure How to Increase Diversity

Addressing systemic inequities in the workforce by improving representation of BIPOC, LGBTQ+, and disabled people in positions of all levels is important to your company’s trajectory.

You’ll know it’s time for an audit if:

Your company lacks diversity in

• Leadership
• Staff
• Stakeholders
• Clients

Your company has High Turnover of:

• POC staff
• All staff
• Leadership

Your Employees Don’t Know How to Get Promoted To:

• Leadership
• Lateral Advancement

Your Employees Don’t Understand:

• Their individual goals
• Their team goals
• How their performance is evaluated

2. Your Teams Are Avoiding Conflict Conflict is inevitable when working with others, and avoiding conflict will only exacerbate the problems on a team. Learning how to have productive conflict will increase team trust. Trust in turn makes room for more imaginative solutions and better relationships.

You’ll know it’s time for an audit if:

• Team members go-along-to-get-along
• Disagreements arise and are unaddressed or lack resolution
• Employees complain of feeling undervalued
• Leadership and the team are not working in cohesion
• Supervisors are often asked to mediate conflicts among team members
• Collaboration is low within teams and across departments
• You notice more competition than collaboration

3. Lack of Communication About DEI is Hurting Hurting Your Brand

It can be tricky to make external statements if you have not established a strategy around DEI. If your company is intentional about its values and brand voice, published responses to current cultural events will be thoughtful and impactful.

You’ll know it’s time for an audit if:

• You are aware of current events but are unsure how to respond externally
• Your competitors have better defined DEI programs
• You want to communicate proactively
• Staff ask you to make statement about recent events
• You have people of color in your marketing but less so in your company
• POC, LGBTQIA+, and disabled employees are being over-utilized for marketing
• You’ve made statements but haven’t seen policy changes

4. Your Policy Doesn’t Quite Match Your Values

Having documents and policies that support your values and DEI efforts is important for your company’s DEI goals. Culture change is only as effective as policy change and vice versa. You’ll know it’s time for an audit if:

• You don’t have a DEI statement
• Your handbook doesn’t address the nuance of identity
• Conflicts or complaints are not documented
• You don’t have clearly defined processes company wide
• Staff don’t know about or don’t follow policies
• Management is not trained on policies

Why You Need an Equity Audit Now

You know why you need to improve your DEI outcomes and when an audit is needed. Let’s talk about why you need an audit now.

An audit improves your DEI initiatives and keeps energy and interest high. You don’t want to risk a slump in your DEI work.

An audit helps you:

1. Celebrate Your Successes

Everything is easier when you are already good at it. Why not start with an easy win? Identifying what your company does well will help you determine what strategies for success have worked in the past.

If your company has been successful in implementing training programs for all staff, this will be vital to know as you start to map out your goals.

Learning what your team identifies as having been successful will also aid in generating buy-in from the team. Taking a look at how the company is successful can outline potential infrastructure for the organizational change you hope to achieve in your equity goals.

2. Learn Where and How to Grow

An equity audit is designed to identify ways a company can be more equitable.

Thoroughly and systematically assessing systems, policies and people experiences, will help bring to light to areas that could use a little more attention. Identifying the gaps will allow for a more realistic and achievable plan. If you begin to set goals for your company without having done any research, you may ultimately waste your resources in an area that doesn’t need as much attention or is not ready to expand.

If resources are poured into external marketing to appear more diverse, but retention for BIPOC (Black, indigenous, people of color) staff is at a low, you will have prioritized a strategy that will not create long term change for the organization. In the long run, you will lose money on high turnover and put yourself at risk for lost trust from your community. An equity audit could aid in avoiding wasted resources and wasted time.

3. Know What Success Looks Like

Setting goals is key to your success in creating a culture of inclusion.

Throughout the audit, themes will be identified and the best next steps will be determined based on all of the information that was pulled during the research phase. It is possible that you’ve already identified your long-term goals.

An equity audit can help map out the near-term goals that will get you therein an equitable and sustainable way using SMART goals. Organizational change is a long term commitment and skipping steps to create an ongoing culture of inclusion will result in more wasted time and resources. An equity audit is an investment for long term impact.

4. Measure Your Impact

Equity audits are not meant to point out all the ways you’ve failed in diversity, equity, and inclusion. Equity audits are hopeful documents that offer strategies for implementing the changes for the good that you wish to see in your company.

Read about Citibank’s audit: Why a Racial Equity Audit is important to Citibank and their work to reduce the Racial Wealth Gap.

Employee feedback is an important piece of every company’s success. Understanding the employee perspective can increase retention, illuminate pain points, and offer insight on your DEI programs impact.

By periodically reviewing your company’s demographics, initiatives, policies and more, you can begin to see ways that you’ve been successful. Tracking those wins and milestones will create the momentum you need to continue this work over time.

Providing data and reports to stakeholders will create confidence in your mission. If each year you set new goals but never communicate the ways in which you’ve been successful or need more time, DEI efforts will be perceived as less important than other initiatives at the company. An equity audit allows you to provide that data to your team and be held accountable.

5. Communicate Your Impact

By creating a report that is easy to understand, companies and organizations can use this to procure funding for DEI initiatives, present data to external stakeholders and potential clients, and track benchmarks and milestones.

By doing an equity audit every 1-3 years, companies can create a documented history of how they have implemented their strategies over time based on data.

It also helps you to demonstrate your DEI commitment to external and internal stakeholders more clearly… An equity audit is a tool to build trust and celebrate the achievements that come out of investing in diversity, equity, and inclusion.

As mentioned above, the workforce is changing and workers make up the market. Consumers and clients are looking to spend their dollars with values driven companies that prioritize inclusion. Communicating your impact and commitment with an external facing document like an audit can ensure consumers are aware of your DEI successes and goals.

6. Track Your Progress

Maintaining momentum in this work is necessary.

DEI does not have to be difficult, but it is a long term commitment that requires planning. It can be easy to lose track of your successes when you are hard at work. Like with any project, stepping back and admiring your progress is necessary for high morale and continuous improvement.

New goals will arise as you make progress and an equity audit can offer concrete evidence for a solid road map. Inclusion can be measured and an equity audit helps you do that.

An equity audit will provide you with data, solutions, and reasons to celebrate your successes. By taking a peek inside of your company you can avoid wasting resources, avoid causing harm, but most importantly identify ways to move towards your vision of becoming a company that is equitable and inclusive.

How to Effectively Audit Equity

Take your audit from good to great to create real culture change in your workplace.

1. Celebrate and Build Upon Your Successes

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Provide recommendations for improvement	Celebrate and Build Upon your previous Successes

Growth is more likely when psychological safety is present; trust is foundational. A “shaming and blaming” approach is not an effective strategy for organizational or cultural change.

In our experience, we often see resistance to engagement due to the fear of failure or lack of existing progress.

Construct the Present, uses the principles of “Knowles’ 5 Assumptions Of Adult Learners,” coined by Malcom Knowles, known for his study of andragogy, or adult learning principles.

In particular, we focus on the principle of experience: “As individuals grow, they accumulate a reservoir of experience that becomes an increasingly rich resource for learning.” By acknowledging a team as experts of their own company, a collaborative plan can be designed based on the strengths of that team.

2. Make Recommendations Based on the Reality of Your Business

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​Provide general best-practice recommendations.	A great audit offers personalized recommendations based on your business’ culture and teams.

Oftentimes, companies want to follow a step-by-step guide for becoming more equitable. Because of the nature of equity work and its relationship with people, there is an element of care that is required for harm reduction.

A deep understanding of a company’s goals, values, and make up is needed to provide impactful results.

While there are best practices for steps to improving a company’s DEI efforts, there is room for error within those steps. For example, if a recommendation is to create an equity statement, it is important that the company culture guides how that process happens.

How will employees respond if leadership writes the statement without stakeholder input?

How will the public respond when you release the statement?

There are ways to design a working plan that is effective and creates the least amount of harm.

3. Hire the Right Consultant

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A good audit is conducted completely in house	A better audit is done by partnering with an external consultant

Hiring an internal Chief Equity Officer or creating a DEI committee is a great step in creating an inclusive work culture. While an internal team could provide an exceptional report, an external consultant has some distinct benefits.

Because an internal team is responsible for the day-to-day of a company’s DEI processes, completing a timely audit is more challenging. By partnering with an external consultant, the internal team is able to maintain steady progress and avoid burnout.

Additionally, because consultants are not in the weeds of your daily operations, they come with a fresh perspective. This distance provides a greater sense of anonymity for staff and means that the consultants’ findings can be freely shared without undue consideration of internal politics.

A great equity audit is done by a consultant with experience in organizational and cultural change.

DEI consultants vary in the same way that lawyers vary. You wouldn’t hire a family lawyer to represent you in corporate law. They specialize in two very different fields of knowledge.

The same applies to DEI. There are many types of DEI specialists. If you have a consultant who does training for staff around topics like race, gender and LGBTQIA+, that does not automatically qualify them to offer strategic advice on organizational change.

While some consultants and agencies offer multiple services, it is important to understand your consultants strengths and passions. At the least, they have the expertise and commitment to partner with you on an audit and the subsequent work to improve your DEI programs.

Maybe you know your company needs an equity audit and think it may need it now, but you aren’t sure where to start.

At Construct the Present, we specialize in audits and we know how to let the best parts of your values and culture lead. Book a 30-minute consultation meeting with a member of our team or send us an email at support@constructthepresent.com if you want to learn more. We can help guide you in your next steps.