Inclusion and diversity (I&D) is an increasingly important and high profile issue for organisations, with implications for boards and senior management. There is increasing pressure to demonstrate I&D by reference to the number of women and people of ethnic and cultural diversity on boards and in senior management roles. Planning for this needs to begin now.
Inclusion and diversity: the current picture
As I&D moves up the corporate agenda, it has been talked and written about in various high profile forums, making the business case for a greater commitment to I&D. In its report, Time for action: the business case for inclusive workplaces, the CBI says that:‘Increasing female employment and productivity to the levels of men… is estimated to be worth 35% of GDP.’
Research commissioned by The World Economic Forum among 371 leading global employers representing 13 million employees, in 15 developed and emerging economies, also supports the business case for I&D. The executive summary to its report, The industry gender gap – women and work in the fourth industrial revolution, states:
‘In addition to a values-based case for gender equality, there is an accompanying economic imperative for including women more fully into society and the workplace and women’s participation in the workforce is no longer perceived as a social issue alone, but also as a business issue—costing women, companies and ultimately entire economies. Female talent remains one of the most underutilized business resources, either squandered through lack of progression or untapped from the onset. Although women are, on average, more educated than men globally and now participate more fully in professional and technical occupations than 10 years ago, as of today, their chances to rise to positions of leadership are only 28% of those of men.’
In November 2016, Sir Philip Hampton and Dame Helen Alexander launched a review with the aim of increasing the number of women in senior leadership positions and on the boards of FTSE companies. The Hampton-Alexander Review, FTSE women leaders - improving gender balance in FTSE leadership sets an ambitious target: 33% representation of women on the combined executive committee and direct reports to the executive committee at FTSE 350 companies by the end of 2020. These organisations should also include reporting on gender balance in their annual reports and accounts. The report also provides advice for investors and executive search firms.
Nor did it all start here. The Hampton-Alexander Review continues the work started by Lord Davies in his report, Improving the gender balance on British boards, for which work began in 2010.
Ethnic diversity is also in the spotlight. In their 2016 report on the ethnic diversity of UK boards, Beyond one by ’21, Sir John Parker and the Parker Review Committee recommend that, by 2021, every FTSE 100 board should have at least one director of colour as should every FTSE 250 board by 2024. You can read more about these requirements, as well as the current picture on ethnic diversity of UK boards, in the report.
It’s not just about senior roles
Of course, the focus of these reports and studies is on senior and board level positions. However, developing talent at all levels is crucial in order for organisations to get the quality of leadership they need while achieving their I&D goals. Organisations will increasingly need to get the best from all the talent available to them in order to grow and develop and contribute to the economy as a whole.
It’s also worth mentioning the Gender Pay Gap Reporting Regulations that came into effect in April 2017. From 4 April 2018 and annually thereafter, private and voluntary sector employers with 250 or more employees will be required to publish gender pay gap information on a publicly accessible website. The information that employers must report on will include differences in mean and median hourly pay and bonuses between men and women, as well as the proportion of women in each pay quartile within the organisation. The initial reports were based on pay data as at 5 April 2017, including bonuses paid within the 12-month period ending on 5 April 2017.
So, if your organisation wants superior financial performance, higher levels of staff engagement, more innovation and improved client retention, I&D has a big role to play.
Optimise inclusion & diversity in your organisation
You may be asking yourself what good I&D looks like or even wondering where to start. If so, you’re not alone. Making progress on I&D can seem complex and just too difficult, especially at a time when there is so much volatility and uncertainty in the economic climate.
For some organisations, particularly those just starting to get to grips with I&D, it's tempting to jump straight in. They may convince themselves that by arranging a few events, setting up a women's network and maybe even a committee, the job is done and all the boxes are ticked. And in the immediate aftermath, this approach will certainly deliver a feel good factor. However, to achieve something sustainable, a more structured approach is required.
Start with your organisation’s strategy and the current trends and developments in the sector you're working in. Listen to what your colleagues, suppliers and clients have to say about the issues and how they view your organisation in this context. This will give you a snapshot of where you are and where you think you should be going. It’ll also help to give people throughout your organisation a sense of ownership in your organisation’s I&D plans.
Next, decide who’s going to do the work. The legal department will have a stake and HR will play a central role. However, involve others, too. In most organisations, there’s a rich mix of people to include, such as those who:
- Are enthusiastic and have a vested interest in I&D;
- Simply believe it’s the right thing to do; and
- Are not fully committed (as they think the workplace allows everyone to succeed on their own merits as it is) but are willing to get involved as it looks good in the eyes of clients, so is good for sales.
Whatever their stance, getting all these people involved will help minimise the risk of group think (where a desire for harmony and unity suppresses independent thought) and subject all ideas to rigorous testing. Be ready to experiment a little. The author has participated in live drama sessions to learn about inclusion and diversity. The idea raised a few eyebrows at first, but once the early participants had given it a try and their feedback was acted on, we were able to roll the concept out across the whole organisation.
Measuring inclusion and diversity
According to a popular saying, what gets measured gets done. For this reason, it’s no surprise that both the Hampton-Alexander Review and the Parker Report make numerous recommendations when it comes to metrics.
So, in the spirit of diversity, a good balance of quantitative and qualitative metrics will give you a comprehensive evaluation of your progress. It’s important to know whether the proportion of your senior managers who are women is in line with labour market availability. However, it’s equally vital to know what your colleagues – introverts and extroverts alike - think and say about working in your organisation.
In the years ahead, major corporations and other organisations will be keen to demonstrate their success in hitting targets for the number of women and people of colour in senior and board positions. This in turn will influence how organisations develop people at all levels and prepare them for the senior openings of the future. To optimise I&D in your organisation, start by understanding its wider objectives and how it’s viewed in this context by staff, suppliers and clients. Involve people from all areas of the organisation and include individuals with wide-ranging attitudes to I&D. Develop a set of metrics so you can measure the effectiveness of your initiatives in quantitative and qualitative terms.