Speak to an expert +44(0)1733 391377

Toggle Sidebar

The events over the past year, including the killing of George Floyd and the Black Lives Matter movement, have underlined the importance of society evaluating the extent to which diversity is truly embedded at every opportunity.

According to our UK Reward Management Survey, there has been a steep curve in employers monitoring their data in the last few years. Here we outline strategies to support your organisation to embed diversity into its DNA.

The business case for diversity

In 2020 Goldman Sachs announced companies would not be taken public if they did not have at least one diverse board member.

McKinsey’s 2020 report, Diversity Wins: How inclusion matters examined the business case for diversity in executive positions. The report noted that some organisational leaders indicated that diversity, equality and inclusion is a “luxury we cannot afford”. However, the business case is unrelenting. In 2020 Goldman Sachs announced companies would not be taken public if they did not have at least one diverse board member. Nasdaq, the US stock exchange including tech giants Apple and Tesla, has also just announced that it will be setting gender and diversity targets for listed companies. Following complaints about the lack of diversity, board directors will have to include one person identifying as female and another as an underrepresented minority or LGBTQ+. The binding targets are hoped to instigate real and lasting change, as according to a Nasdaq survey last year, more than 75 per cent of its listed companies would not have met these proposed targets, demonstrating how diversity data is no longer a luxury.

More broadly, ethnicity pay gap reporting is set to be the next corporate governance measure to follow the gender pay gap reporting. Certain sectors are particularly struggling and face heightened scrutiny to set out the steps they are taking. The FCA has written to remuneration committees of financial services firms to urge them to review pay across all protected characteristics and “act swiftly to address any disparities”. The regulator is even considering requiring companies to disclose their diversity data annually, particularly on their boards and executive management, wanting boards to comprise of at least 40 per women. Asset managers have also been put on notice to tackle the lack of diversity in their workforce, as a group of UK pension funds and investment consultants that collectively manage over £1tn in assets have signed a new charter committing them to consider this as a key factor when awarding their contracts.

Growing impetus

The global pandemic arguably created an opportunity for employers to create a more equitable workplace virtually, which they should look to capitalise on. The availability of a wider talent pool not limited by geography, virtual interviews that could be conducted more easily as part of blind recruitment to overcome the risk of unconscious bias, and the greater use of diversity and inclusion consultancies who have been brought in to scrutinise employers’ track records in this area are all concrete steps reported by customers. Dedicated Head of Diversity roles are also increasingly prominent, reinforcing companies’ commitment to progress.

“To build a great organization, you need to build your teams from across the full population of people…that includes all of the diverse groups in the population.”
Bob Sulentic, CEO CBRE Group Inc.

Customers are reporting the value of a more diverse workforce. Housing Associations in particular want to be more reflective of their customers. The sector have anecdotally reported that the diverse range of their customers’ backgrounds is not always reflected in their intake. To be more reflective of the customer base may attract more customers. Open minds can open doors so that enriched experiences of the workforce can truly translate into the customer experience. This has to be embraced throughout the organisation, from the lowest to highest paid to thrive.

Only when this is authentic can inclusivity be nurtured, with different lifestyles, values and cultures welcomed at every level of the company. This is also true of age demographics, where 57 per cent of respondent employers to our Reward Management Survey are scrutinising pay gaps based on age. Young employees can inject new ideas and energy whilst working closely with established experts to accelerate the success of these different viewpoints.

Pay policies

Equal pay protects the legal right to equal pay for equal work, but defining equal work is of critical importance in determining whether your system of pay is actually fair. Ensuring pay parity is a key concern for many customers. We can help review your pay policy, particularly around the language on diversity and how you communicate the framework you use. Understanding the drivers behind any pay gaps is important in tackling the factors involved. When it comes to tackling any gender pay gap, 48 per cent of respondents to our UK Reward Management Survey revealed they are actively conducting further analysis into their pay gap figures to ensure they are taking concrete steps year on year.

HR data

Utilising the power of data and making informed decisions is crucial to ensure that you are using tried and tested methods in embedding greater equality, diversity and inclusion. Anecdotally, we are hearing in HR Groups that ethnicity pay gaps will be trickier to assess than gender pay gaps, as employees do not have to provide this information and the range of definitions posed to employees at the data gathering stage can be inconsistent between organisations. A lot of people are trying to collect this and understand their picture on pay for each demographic, with 79 per cent examining their ethnicity pay gap. Some are using August to promote the initiatives they have run over the past year on diversity, leading with the story around why they are collecting more data.

Championed by leadership

The Institute of Directors has said that boardroom diversity is shown to bring wider and more varied perspectives, resulting in more creative outputs. Leadership needs to both communicate equality, diversity and inclusion measures to show top-level support and build the piece around inclusion, making employees feel more comfortable in bringing their whole selves to work and calling out microaggressions or any other form of discrimination in the workplace. Support from leadership also drives up attendance levels and participation of employees in key initiatives designed to create an inclusive culture. Employees understand the emphasis placed on diversity that goes beyond lip-service, helping to embed this into the culture of the workplace. Outreach groups, networking and mentoring are all key initiatives that leadership can encourage employees to join in with. Making this a C-Suite agenda item signals the long-term commitment that goes beyond media interest in the issue that ebbs and flows.

Continuous monitoring

Equality, diversity and inclusion is not something that will be instantly ‘fixed’ in organisations. Ensuring that data is accurate and up to date is a continuous process. Metrics such as socio-economic background and sexual preference are increasingly emerging as further nuances to organisational demographics that employers are monitoring, to ensure that their culture is inclusive. It is important to ensure that employees are treated as individuals and that measures go beyond the data and translate insights into actionable intelligence. Companies should assess what initiatives they have in place that make the most impact. Some are stepping up their diversity training to ensure obstacles to recruitment and progression are overcome. Asking employees what matters to them can help identify what works best – there is no ‘one size fits all’ template for this.

Get in touch

Call us today to discuss how we’re helping customers define their next steps when it comes to their approach on equality, diversity and inclusion. We can help your company cultivate a greater sense of belonging through the employee opinion surveys and design reward strategies that champion a fair system of pay throughout your organisation.

Related Articles

Read More
Research, Insights and Publications

Pay review trends and expectations for the year ahead

Our recent pulse survey, ran over the last two weeks of July 2021, captured pay trends and expectati...

Read More
Research, Insights and Publications

The business case for flexible working beyond the pandemic

Our spring 2021 UK Reward Management Survey highlighted how 84 per cent of employers expect flexible...

Read More
Research, Insights and Publications

Infographic: The impact of the pandemic on new ways of working

Want to know more? We want to say thank you to all those who participated in the s...


Stay up to date

Sign up for briefings on pay benchmarking, salary surveys, reward strategy and statistical updates.

sign up for updates

© Paydata Ltd 2024 All rights reserved.
Registered in England no: 3632206
VAT no: 728 0808 28

Paydata Ltd, 24 Commerce Road, Lynch Wood, Peterborough, Cambridgeshire, PE2 6LR