Challenging orthodoxies to create meaningful and measurable outcomes
Dismantling systemic bias is one of the biggest challenges of our time. We believe the societal focus on equality rather than equity continues to disadvantage a significant portion of the population. This disconnect inhibits inclusive prosperity for every community and keeps us from realizing our collective potential as a society. The business community has the power to effect meaningful change and can play a central role in advancing equity. At Deloitte, we see equity as a moral imperative and recognize our power to make a difference.
Equity and equality: A distinct difference
Understanding equity, and how it differs from equality, is fundamental to making true progress and acknowledging where we have the opportunity to make systemic change. Equity is the outcome of diversity, inclusion, and anti-bias actions wherein all people have fair access, opportunity, resources, and power to thrive, with consideration for, and/or elimination of, historical and systemic barriers that have existed in society. Equality, by comparison, is when all people are treated identically, without consideration for historical and systemic barriers and advantages.
Watch: How is equity different from equality? Why has the conversation shifted from being about equal opportunity to being about equitable outcomes?
Examining our systems: Expanding transgender benefits
We recognize that, as an organization, we aren’t immune to operating in a society where systems and structures benefit some while disadvantaging others. Therefore, we introduced equity as key to our strategy in our inaugural 2021 DEI Transparency Report with an initial focus on accountability through transparency and developing data-driven interventions. Recognizing that strategies to drive meaningful change require both near-term actions and long-term transformational efforts, our focus has evolved to understanding the varying needs of different populations and developing strategic action plans, in collaboration with national communities. We are examining our existing systems, processes, and policies to improve the talent experience of our people and taking accountability to drive true change within every reach of our organization.
We also understand that the work to achieve equity includes measurable outcomes that are guided by data-driven insights. Meaningful outcomes are achieved by challenging orthodoxies and having the hard conversations. This helps us create an environment where everyone is empowered to thrive and reach their full potential. Through this approach, we have identified our biggest opportunity areas to advance equity and continue to monitor progress.
“Equity is not an initiative or a program—it is an outcome.”
The Equity Imperative
We continue to advance equity in a profound way by assessing the systems in which we operate within Deloitte and externally with other coalitions in the private, public, and social sectors. Leveraging the equity activation model, a system-based view we introduced in The Equity Imperative report, we structure our efforts around three primary spheres of influence: Workforce, Marketplace, and Society.
Diversity, Equity, and Inclusion (DEI) Institute
In May 2022, Deloitte launched the DEI Institute™, created to pursue sustained equity and belonging for all. The institute will provide cutting-edge research, bold points of view, and impactful events that can help business and community leaders drive meaningful change in workforces, marketplaces, and society. At Deloitte, we believe we have a moral responsibility—as a purpose-driven enterprise focused on DEI—to take a stand and make a difference on important issues. The Institute builds on Deloitte’s commitment to advance equity, focusing on three specific priorities:
- Driving ground-breaking research on emerging DEI trends and issues, building on seminal research such as The Equity Imperative.
- Convening and collaborating with organizations, thought leaders, academics, and businesses to multiply impact.
- Leveraging Deloitte’s deep experience and extensive network to champion DEI in business and as a corporate citizen.
The launch of our DEI Institute was announced at our inaugural Chief Diversity, Equity, and Inclusion Officer Forum.
Chief Diversity, Equity, and Inclusion Officer Forum
In alignment with our commitment to advance equity in the workforce, society, and marketplace, we are collaborating with other leaders and organizations to make an impact that matters. We know we cannot achieve an equitable future alone—it will take all of us. In May 2022, we hosted our inaugural Deloitte Chief DEI Officer Forum, an event that convened approximately 100 DEI leaders across industries to focus on how they can advance diversity, equity, and inclusion in their organizations. The forum is a space for open dialogue and sharing leading practices, enabling DEI leaders to reflect on and tackle challenges, build a network of peers, and feel empowered in their roles. Topics included discussions on the global perspective of DEI, transparency and data, expanding influence in the C-suite, and addressing social issues.
Management Leadership for Tomorrow (MLT) Black Equity at Work Certification
In the spirit of collaboration with our clients and communities, to support the advancement of Black colleagues within the workplace and to address social inequities, Deloitte became one of the inaugural employers to join Management Leadership for Tomorrow’s (MLT) Black Equity at Work Certification program. In October 2021, Deloitte took a major step toward achieving certification, becoming one of 15 inaugural employers to have its Black Equity at Work plan approved by MLT.
“Management Leadership for Tomorrow and Deloitte have a long history of collaborating to empower the next generation of leaders. I was excited to see Deloitte commit to even more rigor and accountability as one of the inaugural employers to join the Black Equity at Work Certification process. We look forward to advising Deloitte on their efforts to accelerate Black equity.”
John Rice, Founder and CEO, Management Leadership for Tomorrow
Our participation in MLT’s Black Equity at Work Certification program serves as an accountability mechanism for our organization. MLT’s clear and comprehensive Black equity framework of standardized criteria, planning, and measurable benchmarks helps to augment Deloitte’s ongoing efforts to advance equity in our organization. This common standard provides a road map focused on five key areas: representation at every level, compensation equity, inclusive and anti-racist work environment, racially just business practices, and external investments. For example, one of MLT’s equity indicators is the payment of a living wage to all employees, which Deloitte confirms for each new salary offer.
Becoming Black Equity at Work Certified isn’t the end of the road. The ongoing certification process will hold us accountable to our goals and require continuous progress. This certification reflects our commitment to meaningful, measurable actions to push the DEI agenda forward as a more equitable enterprise.
In our workforce: Advancing equity through our talent systems and processes
Today’s Deloitte US workforce spans more than nine racial and ethnic groups and four generations. As shared earlier in the report, 4.9% of our workforce identifies as a veteran, 5.7% identifies as a person with a disability, and 4.6% identifies as LGBTQIA+. These numbers do not tell the whole story of the multiple, overlapping, and intersecting identities of our people, but the data provides a glimpse into the diversity of our workforce and the multitude of needs and lived experiences that we strive to acknowledge. By making efforts to advance workforce equity, we are taking a data-driven, human-centered approach to drive interventions at both the individual and systemic levels. Importantly, taking actions to mitigate opportunities for systemic exclusion ultimately benefits all members of the workforce.
The first step is to examine the outcomes of these societal systems and structures that impact the lived experiences of people every day. In seeking to understand the experiences of certain identities through both data and personal stories, we accept responsibility for acting on this new shared knowledge and disrupting systems that create or perpetuate disadvantage.
Advancing equity for our workforce is not about a single program or initiative. However, we believe that to enable systemic change, we need to start with targeted actions. We’ve highlighted three areas across the talent life cycle where we are using data and feedback from our people to inform transformational interventions.
Source and select
At Deloitte, our recruiting efforts are focused on two significant candidate pools: entry-level candidates, including undergraduate and graduate students, and experienced hires. Both pools play an important role in advancing representation goals at all levels and providing a strong pipeline of future leaders.
Creating visibility into professional services careers
In a period marked by explosive growth and elevated levels of attrition across corporate America, our recruiting teams have stepped up to the challenge. Since the last report, we hired 33,622 professionals across multiple geographies during a global pandemic. Furthermore, through their efforts, we have made significant gains in increasing the diversity of our new hires across skill sets, capabilities, experiences, and identities.
Recruitment data points to overall progress. Hiring above current representation is one way we can increase workforce diversity. Hispanic/Latinx professionals comprise 9.1% of new hires compared to workforce representation at 7.4%. While female hiring and direct admission to the partnership is below representation, it has increased since our last report from 40.9% to 43.2% in FY2022. For more on recruitment data, see the workforce data section.
When we talk about creating equitable paths to become a Deloitte professional, we look at the systems for selecting applicant pools and recruiting channels, how we engage and network with potential job candidates, and the process for candidate application, interview, and selection.
Expanding recruiting channels
In the 2021 DEI Transparency Report, we highlighted several ongoing efforts to expand the diversity of our recruiting channels. We are proud to share that we continue to invest in these programs and relationships to increase the ways we meet and engage with prospective candidates.
“Being strategic about where we source talent is critically important to driving a more diverse future workforce. The data shows that diversifying where and how we recruit will directly impact representation in hiring. Our focus is expanding our outreach and creating sustainable pathways for individuals to pursue opportunities with Deloitte.”
Sheila Williams, National Managing Director Talent Acquisition, Deloitte Services LP
- Nontraditional recruiting: In March 2022, we welcomed the largest class yet to our Encore program, with 50 participants. The Encore program was created to provide experienced professionals who have been out of the workforce for an extended period with an attractive opportunity to resume their careers. The program helps professionals refresh their skills and provides them with mentoring, coaching, and a personalized development plan while they are assigned to an initial client engagement as they re-enter the workforce.
- Strategic collaborations: We continue to invest annually in more than 35 strategic sourcing relationships and alliances to build Deloitte's brand and attract talent. These relationships and alliances include but are not limited to: Association of Latino Professionals For America (ALPFA), Ascend, Hispanic Association of Colleges and Universities (HACU), Management Leadership for Tomorrow (MLT), PowerToFly, National Association of Black Accountants (NABA), and the Ron Brown Scholar Program.
- Overall: In FY2022, we interviewed more than 1000 campus and experienced hire candidates who were sourced from our 35+ strategic relationships and alliances.
- Veterans: In FY2022, we hired more than 900 veterans; overall, our pool of veteran talent continues to increase due to our strategic relationships and alliances and hire-to-train initiatives.
- New HBCU strategy: In 2022, we established a cohesive organizationwide strategy to strengthen relationships with Historically Black Colleges and Universities (HBCUs). Fifteen schools were selected for this effort. Going forward, we will take a targeted approach toward building and maintaining relationships and developing a sustainable pipeline of candidates from all 15 schools. HBCU students who do not attend one of these 15 HBCUs can participate in virtual networking opportunities and apply online.
- We had 650+ HBCU candidates in our FY2022 recruiting pipeline through active campus and virtual engagement, resulting in 336 fulltime hires or internships, a 109% increase over FY2021.
- 102 students participated in our HBCU Emerging Leaders Scholarship Program hosted at Deloitte University in April 2022, a 23% increase over FY2021.
Increasing slate diversity
“The data supporting diverse slates for organizations and for Deloitte is undeniable. When organizations increase the diversity of the candidate pools that hiring managers review and interview, we see positive impacts on the diversity of hiring outcomes. But organizations can’t change what they don’t measure. Collecting data and sharing outcomes with recruiting teams is critical to creating more equitable outcomes.”
Valerie Irick Rainford, CEO, Elloree Talent Strategies
In addition to building our recruiting channels, we are also advancing equity through our application, assessment, and interview processes. As we develop our long-term strategy, we are piloting diverse slates for certain roles. The term "diverse slate" means that during the candidate recruiting process, a certain number of female candidates and a certain number of racially or ethnically diverse candidates are included in the candidate pool. Research1 shows that diverse slates are a powerful tool in mitigating the potential for unconscious biases in the recruiting process, and that increasing the diversity of applicant pools can have a dramatic impact on the racial, ethnic, and gender balance of hires.
Ultimately, selecting the most qualified candidate is always the objective. Implementing diverse slates could be an additional way for us to look more broadly and expand the pool of qualified candidates who could apply their skills, experience, and capabilities.2
- Stefanie K. Johnson, David R. Hekman, and Elsa T. Chan, “If there’s only one woman in your candidate pool, there’s statistically no chance she’ll be hired,” Harvard Business Review, April 26, 2016. ↵
- The policy of each Deloitte US firm is to seek and employ people with skill and integrity and to provide them with the means to develop professionally, without regard to race, color, religion, creed, citizenship, national origin, age, sex, gender, pregnancy, gender identity or expression, sexual orientation, marital status, disability (including neurodiversity), genetic information, veteran status, or any other legally protected basis, in accordance with applicable federal, state, or local law. ↵
Empower individual and team performance
A critical piece of Deloitte professionals’ experience and growth is regular evaluation and meaningful, ongoing conversation around their performance. The outcomes of performance management play a critical role in a professional’s development and advancement, providing them with important feedback on career trajectory, strengths, and development opportunities and informing the annual compensation process.
Cultivating equitable and inclusive team leader capabilities and accountability
As we have found through our equity assessment, and as evidenced through research, a professional’s team leader or day-to-day work manager plays a significant role in many aspects of their talent experience, including engagement and performance. Team leaders set and manage performance expectations and deliver feedback, communicating strong performance and areas of development. The outcomes of these activities, including feedback that informs compensation and promotion decisions, are captured and recorded through the performance management process, informing a professional’s career trajectory.
External research also shows that these processes can be influenced by unconscious bias, and that certain groups are more susceptible to being the recipients of this bias. For example, a 2021 study3 found that men get more actionable feedback than women, and although businesses now employ more women managers than before, advancement into senior leadership roles remains much lower for women than for men.
Unconscious bias is a natural part of how our brain functions. However, since it can impact our decisions, our behaviors, and how we perceive others, it is important to understand and acknowledge how unconscious bias can show up in the performance management process, and then take steps to mitigate those effects.
Leading teams in an equitable, inclusive way
Given the importance of the team leader role in shaping the talent experience and influencing our professionals’ performance management outcomes, we are doubling down on how we inspire and support team leaders to advance equitable outcomes. We are taking several leadership development actions such as:
- New training for team leaders to help recognize the types of biases that have the potential to influence performance assessments.
- New mechanisms for upward feedback and accountability for team leaders.
- Refreshed resources to support check-ins and coaching conversations.
Our intention is to promote a safe and inclusive performance environment by helping our team leaders become bias-conscious and more capable of providing actionable feedback so their team members can thrive. We are driving this forward by equipping our leaders with the right tools and accountability measures to support everyone’s professional advancement.
Portfolio of team leader interventions
Although there is not one easy solution to improve performance management, we developed a portfolio of interventions, as shown in the images above, to improve our professionals' performance experience and access to meaningful and developmental feedback. For example, we are building feedback mechanisms on allyship and inclusion through our upward and peer feedback tool, LOOP. Through interventions like LOOP and others, we are working to embed equity in performance management.
- Elena Doldor, Madeleine Wyatt, and Jo Silvester, “Research: Men get more actionable feedback than women,” Harvard Business Review, February 10, 2021. ↵
Reward and recognize professionals
Pay equity is a key measure of whether our internal practices reflect our stated commitments to advancing equity. In our last transparency report, we emphasized our long-standing commitment to equitable pay and described our overall approach. This includes engaging in annual salary benchmarking, the use of salary bands to support consistency and inform how an individual's experience is considered, and a rigorous system of leadership checks and balances in the compensation process. This year, we want to expand on our commitment by (1) providing greater transparency into our pay processes that happen throughout the year and at different stages of the talent life cycle for professionals; and (2) sharing the outcomes of an adjusted pay gap analysis.
Pay management processes
We have robust management processes and principles to support fair and equitable pay, of which ongoing reviews are an important component.
- Pay reviews throughout the year: We continue to consider pay compared to peers at key stages of the talent life cycle including time of hire, during off-cycle adjustments, at time of promotion and/or transfer, and during multiple leadership reviews embedded in our annual compensation processes. A number of checks and balances are in place to promote fair and equitable compensation while enabling leaders to pay professionals in a competitive way. These are critical parts of our comprehensive approach to maintaining fairness in the way we pay.
- Periodic pay variance review: Deloitte regularly reviews compensation throughout the talent lifecycle to confirm that we are paying our people equitably. One way to do this is by analyzing our US employee population for statistically significant differences in salary. As part of this analysis, compensation is reviewed across a number of factors, including but not limited to business area, job level, talent model, tenure, and performance, and then analyzed across identity factors such as race, ethnicity, and sex. If any statistically significant differences are observed, they are individually reviewed to understand whether they are driven by legitimate business factors such as differences in job duties, prior experience, and performance history. Following the review, compensation may be adjusted, if appropriate. In 2022, 0.2% of the US workforce (senior managers and below) received adjustments for unexplainable differences, which totaled $572,065 (0.006% of our total US salary budget).
- Market reviews and adjustments: In FY2022, we continued to reinforce our commitment to competitive compensation and rewards that reflect the outstanding impact of our professionals. Due to extraordinary market conditions during the past year, rather than waiting for the annual compensation cycle for a market assessment, we embarked on a mid-year market-based analysis of our professionals’ pay. In some markets and for some professionals, our compensation remained highly competitive, and no adjustments were warranted. For others, data indicated the need for adjustments to accommodate shifts in the market over the past year.
FY2022 US pay variance review outcomes
US senior managers and below reviewed for statistically significant differences in salary by peer group across cohorts including sex, race, and ethnicity
of professionals flagged for additional individual review due to statistically significant differences found during peer group analysis
of the Deloitte US workforce (entry level professionals to senior managers) found with unexplainable salary differences
of adjustments were paid across all businesses and Enabling Areas resulting from unexplained differences (0.006% of our total US salary budget)
Pay gap analysis
As described above, our pay processes consider a number of business-specific, role-specific, and individual factors impacting compensation, which don’t easily lend themselves to visual representation. However, we also hear from our professionals that they are looking for greater clarity around pay data, and in response we are sharing a high-level, quantitative view of pay data by race, ethnicity, and sex to provide insights on how average wages stack up across groups. Though not as thorough as our pay management processes, this adjusted pay gap analysis conducted by an external firm took into consideration professionals’ role (such as directly serving clients, internal support), job level, title, business area, and talent model—just a few of the factors that go into compensation decisions. When adjusting for these organizational factors, we found no significant differences in average wages between Deloitte professionals based on race/ethnicity4 and sex.4
FY2022 Deloitte US workforce (entry level through senior manager professionals) pay gap analysis
Throughout these reviews and other components of our pay management processes, Deloitte seeks to recognize the impact of our professionals in an equitable and competitive way. We regularly review the compensation of our professionals and identify and address potential disparities that may arise. Pay equity is an important aspect of creating a fair and equitable society and critical to recruiting and retaining professionals in a highly competitive talent market. Taking steps to uncover and address pay inequities if they exist is just one of the ways in which we can create meaningful change for our people, but we know we still have work to do. In the coming year, we will continue to evolve our pay management processes and evaluate the factors that impact compensation to confirm that they support our equitable pay commitments.
- U.S. Equal Employment Opportunity Commission (EEOC) ‘2021 EEO-1 Component 1 Data Collection Instruction Booklet, Appendix D: Race and Ethnicity Identification.’ ↵
In the marketplace: Advancing equity through business diversity
Deloitte is committed to leveraging its internal capabilities to catalyze the growth of diverse businesses. To that end, we committed to two goals for external impact:
- Increase the amount of addressable spend on diverse businesses to $1B by 2025.
- Increase our spend with Black-owned and Black-led businesses to at least $200M by 2025.
Supporting economic equity through business diversity
To achieve these commitments, we recognized the need to build out our capabilities and have taken the following actions:
- Created our US Office of Business Diversity, responsible for executing on our long-term strategy of further diversifying and increasing our spend, investments, teaming, and access to Deloitte assets and offerings with diverse businesses. Within this office, we have new roles dedicated to supplier identification, supplier education, and supplier management. With supplier identification, our immediate focus has been the development of educational and growth accelerator programs to increase our spend with Black-owned and Black-led businesses. Across the last two fiscal years, spend with Black-owned and Black-led suppliers is up nearly 60%, with our FY2022 spend expected to be greater than $60M. We were also successful at furthering our commitment to Black-owned financial institutions by making deposits in targeted Black-owned and Black-led community-based banks.
- Operationalized our supplier diversity reporting to include periodic updates of our actual performance to diverse spend goals. We are pleased to report that in FY2022, Deloitte US spent $1.05B (nearly 13% of addressable spend) with diverse suppliers. Over a four-year period, this is up more than 40% when compared to our diverse supplier spend of over $700M in 2019. Given the strength of our performance on the $1.0B goal, we will be re-evaluating our longer-term commitments.
- Initiated marketing and awareness campaign with targeted communications to our procurement leaders and other stakeholders to increase awareness of our supplier diversity spend goals, and our approach for identifying suppliers they can use to support our spend commitments.
- Redesigned our procurement processes to increase the visibility and use of diverse suppliers. This includes greater inclusion in the Request for Proposal (RFP) process, growth targets for the increased use of diverse subcontractors across a broader set of our contracts, and the plans for a web-based tool to make it easy to identify and use local diverse suppliers.
While these actions are helping to increase overall diverse spend across all underrepresented suppliers, our immediate focus continues to be growth in spend with Black-owned and Black-led suppliers.
In society: Advancing equity through community in action
Recent events continue to illustrate the many disparities and inequities that continue to impact our society—from health inequities that have disproportionately burdened racial communities to the plight of poverty and obstacles to inclusive prosperity. We are compelled to address the challenges that lead to systemic disadvantage, furthering our role as an advocate for change and working toward an equitable future for all. We are taking bold actions to lead the way toward equity and make a lasting impact outside of our organization by promoting inclusive economic prosperity, addressing gaps in education, and increasing access to employment opportunities. One example is through the Deloitte Health Equity Institute (DHEI).
Deloitte Health Equity Institute
At Deloitte, we believe health equity is a moral imperative that requires business solutions. Recognizing the need for Deloitte to play a more active role in addressing the profound health disparities that exist in society, we established the Deloitte Health Equity Institute (DHEI) in spring 2021. DHEI, which is integrated with Deloitte’s Center for Health Solutions (CHS) and the US Purpose Office, builds collaborations through philanthropy and pro bono services to advance health equity and make an impact that matters. Our goal is to create exponential change that will lead to a world in which health isn't determined by race, gender, ability status, or zip code—one in which all people have the fair and just opportunity to achieve their full potential in every aspect of their health and well-being.
DHEI works across the public, private, and social sectors to advance our mission. Since spring of 2021, DHEI has launched 22 collaborations to advance health equity. For example, we are building on our longstanding relationship with New Profit, a venture philanthropy organization that backs breakthrough social entrepreneurs who are advancing equity in innovative ways.
Through an investment from DHEI, New Profit launched its inaugural Health Equity Cohort. The cohort includes eight early-stage organizations led by a diverse group of proximate leaders who are working to shift the underlying conditions that create health inequities across an individual’s lifespan and entire generations. The selected organizations—which are focused on a variety of topics that impact health such as affordable housing, food insecurity, and maternal health—received unrestricted funding to support their efforts and have opportunities to participate in capacity-building and peer learning programs to further amplify their impact.
DHEI has just begun several other collaborations that directly focus on issues of diversity, equity, and inclusion. DHEI is launching seven more collaborations in the near future, including:
- Fenway Institute: The Fenway Institute and DHEI will work together to increase awareness, empathy, and quality of care for LGBTQIA+ people and those affected by HIV, given the disproportionate levels of stigma and discrimination in healthcare these populations face. Specifically, we are investing in curriculum management and evaluation to expand technical assistance and training on inclusive and affirming healthcare delivery. Through this collaboration, we aim to increase the number of equitably trained healthcare workers through our programs by 15% to 20% over the next three to five years.
- Morehouse School of Medicine (MSM): The MSM and DHEI collaboration will build on a relationship between MSM and CommonSpirit Health aimed at addressing the underlying causes of health inequities, including the lack of representation among care providers. The vision of this work is to address health inequities in provider training and maternal health care delivery settings. The program will enable this vision through a scalable, culturally humble care training for providers, and an increase in patient navigators and home-based maternal blood pressure monitoring for patients.
- Echoing Green: DHEI will be collaborating with Echoing Green, a global nonprofit working at the intersection of social innovation, racial equity, and social justice, to support Black social entrepreneurs who have historically faced barriers to funding their efforts to advance systemic change within the sphere of health equity. DHEI’s funding will be directly used to provide follow-on funding to fuel the growth and impact of social entrepreneurs whose enterprises advance racial justice in the United States.
A long-term commitment to change
Achieving health equity as an outcome requires dedication to listening, learning, and engaging with the ecosystem and those who have lived experience. We know that the public, private, and social sectors must work together to align strategies, policies, and investments through high-impact alliances. Through DHEI and CHS, Deloitte is committed to driving a sustainable and impactful health equity agenda from the ground up for the long term. Learn more about the Deloitte Health Equity Institute.