THE MERITS OF MEASURING INCLUSION A focus on lived experiences offers a non-divisive means of advancing organisational DEI. Paolo Gaudiano reveals how businesses and academic institutions can measure inclusion effectively to drive performance
I n recent times, we have witnessed a growing backlash against diversity, equity and inclusion (DEI). Given that people are commonly an organisation’s most valuable asset and its largest operating expense, it’s important to understand the reasons for the dissent and find less controversial approaches that are more directly linked to business outcomes. A key source of the DEI backlash is what I call the “diversity disconnect”. Many organisations focus on diversity, especially demographic representation, as the main metric for progress. While diversity is visible and easy to measure, this focus can fuel perceptions of reverse discrimination and alienate majority- group employees, especially if culture remains unchanged. Another challenge is the lack of clarity around DEI terminology. “Inclusion”, in particular, is often vaguely defined. In my book Measuring Inclusion: Higher Profits & Happier People, Without Guesswork or Backlash , I define each of the DEI terms from an organisational perspective: • inclusion is what you do • diversity is what you get • equity is what you want Inclusion measures how well an organisation ensures that workplace experiences do not depend on factors such as demographic traits. Poor inclusion leads to lower satisfaction and higher turnover for certain groups, which ultimately impacts diversity.
THE COST OF EXCLUSION In a 2023 paper published in Applied Sciences , my colleagues and I used a computer simulation that replicated an organisation’s daily activities to show that even a small hiring and promotion bias in favour of men could reproduce real- world gender disparities across industry sectors. The takeaways: “inclusion is what you do” and “diversity is what you get”. Exclusion, meanwhile, leads to higher turnover, lower productivity and ultimately, increased costs and reduced revenue. After developing a calculator to estimate the financial cost of exclusion, we found that most companies may be unknowingly losing 20 per cent or more of their net profits by permitting poor experiences for underrepresented groups. Unequal satisfaction levels result in wasted talent and missed financial opportunities, which is why we say that “equity is what you want”.
If inclusion is so important, why aren’t companies measuring it effectively? Many companies only evaluate self‑reported feelings of inclusion, which are the result of workplace experiences, as well as individual factors. In effect, they measure outcomes, not root causes. However, there are tools that can address this issue. In our inclusion assessment projects, employees attend a workshop to introduce key concepts. We then invite them to a website where they can share some demographic and job- related information anonymously (such as years with the organisation, role/ rank, remote/hybrid/on-site). We then ask them to describe specific workplace experiences that have interfered with their work and to classify each experience across several categories, including Compensation & Benefits, Recognition & Appreciation and Access & Participation. We also ask them to specify
36 Business Impact • ISSUE 6 • 2025
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