It is the season of the Annual Report, and you’ve probably got a slide ready that says something like “40% of our staff come from diverse backgrounds”. It looks great and will surely please the Board. However, a closer look reveals that this figure does not fully reflect reality.
But how come? This is because a single percentage doesn’t tell you how those people are placed within the company. If all your diverse talent is stuck in entry-level admin roles while the executive floor still looks exactly like it did a decade ago, you haven’t actually managed to build an inclusive company. You’ve just put a false label on it.
To really lead a company into the future, we have to stop quantifying diversity and start looking at how that talent is actually moving through the business. This means that we need to stop looking at flat averages and start looking at the spread.
Avoid The Average Trap
The biggest mistake we make in HR is pure reliance on the average. We use it for everything: average salary, average tenure, average performance score, and so on. But averages are not as intuitive as they seem, and a lot can remain hidden behind these numbers.
Imagine you’re looking at pay equity in your IT department. You calculate the average salary for your diverse team members, and it’s R850,000. For everyone else, it’s R860,000. You’d think that’s a great result, right? But what if you just hired a new, diverse Chief Technology Officer on a massive salary? That one person’s paycheck pulls the average up for the whole group, hiding the fact that the other 30 people in that group are being underpaid.
This is where the maths matters. To get the big picture, you start with a mean calculator. It’s a good starting point for seeing total costs, but if you want to get a full picture, don’t stop here.
The Reality Check
If you want to know what’s actually happening to the people in your office, you have to look at the median.
If you lined up every employee by salary, the median is the person standing exactly in the middle. Unlike the average, the median doesn’t care about the outliers, so it doesn’t care about the one person making R3 million or the intern making R5,000. It just looks at the typical experience.
Let’s apply this to how long people stay at your company (Tenure). Your average tenure might look like 3 years. But how representative is this number really, if you have five people who have been there for 20 years, and everyone else quits after six months? The remaining employees are making your average look healthy, but they are hiding a serious problem.
This is where the median calculator comes in handy. You will see that your average tenure is 3 years, but your median is 6 months. This means your company is great for the inner circle, but toxic for new talent.
You could say the median works as a lie detector. If the gap between your average and your median is huge, your data is skewed. In HR, a skewed number usually means you’re using a few success stories to cover up a much bigger problem.
Diversity in Data Also Matters
When looking at the diversity of your employees, don’t overlook the diversity in your data. This is why you should also check the variance, which measures how spread out your numbers are. This can be an indicator of whether talent is stuck in one position or gets to move to higher roles.
Let’s look at two different companies:
- Company A has diverse people working everywhere. From the front desk to the boardroom. Their talent is spread out.
- Company B has just as many diverse people, but 95% of them are in the call centre. Their talent is clustered.
Company A has a healthy culture. Company B has a systematic problem.
To show this to your Board, you need to take a look at your job levels. You should give every job level a number, for example, Junior is 1, Manager is 5, and CEO is 10. If you run those numbers through a variance calculator, you can see what’s behind the numbers.
- Low Variance: Your talent is stuck. Everyone is huddled around the same low-level jobs.
- High Variance: Your talent is flowing. People are moving up the ranks and spreading out across the company.
Why the Board Should Care
Why should an HR Director care about this? Because it changes the conversation from appearance to facts. Especially since these numbers help you assess business risk. Using these tools helps you spot:
- The succession risk: If your variance is low, you have no future leaders.
- The turnover risk: If your median tenure is low, you are wasting millions on recruiting people who won’t stay.
- The legal risk: If your median pay is lower than your average, you have a pay gap that’s waiting for a lawsuit.
Conclusion
Diversity is about the numbers, but inclusion is about the distribution. As HR leaders, we have to demand better data. A 40% headcount alone is not enough; we need to understand how that representation is spread across roles, levels, and functions
Stop just counting people and start making people count. Use the mean, median, and variance to ensure that all your employees are fairly represented.
Guest writer
