With the publishing of first the Gender Pay Gap and now the Ethnicity Pay Gap reports, it is possible to gain a better insight into the level of diversity and inclusion within companies in the UK. However, what these reports reveal to a greater extent is that there is a much bigger problem with equity; employees are not being given equal opportunities to progress or just to be paid the same amount for the same job. We need to be talking more about Diversity, Equity and Inclusion, instead of just Diversity and Inclusion.
There are many articles, research and stats, such as this very informative piece from Oleeo, that show the benefits of having diverse teams and workplace, with many companies taking steps to ensure they are attracting and hiring more diverse candidates.
Some of this improvement has been through a greater focus on inclusion, creating an environment and mentality that allows better employee engagement in the workplace, as well as candidate engagement during the hiring process.
However, this has not translated into an improvement in equity in the workplace, without equal opportunities for all employees. Research by Green Park shows that “the number of black people at the top of Britain’s biggest listed companies has fallen to zero, despite public commitments to increase diversity in leadership”.
This research also shows that the number of black leaders (Chair, CEO, CFO) in the FTSE100 is now zero and that now only 3.4% of leaders have ethnic minority backgrounds. Looking forward, it does not look like this will improve either as black representation in the leadership pipeline has decreased from 1.4% to 0.9%. Ethnic minority representation more widely in this pipeline has also dropped from 10.7% to 9%.
This is in conjunction with figures from the Ethnicity Pay Gap, that the ONS reported in October 2020, which shows the regions with the biggest gaps as London with 23.8%, Yorkshire & Humberside with 12.7% and Scotland with 10.3%.
The Gender Pay Gap has also shown similar disparity with a recent article showing that despite more focus on gender equality “the average woman in her 20s today will retire with £100,000 less in her pension than her male peers.”
This does not paint a good picture when it comes to equal opportunities for all employees, but there is hope and ways to improve this. Frequent and in depth reporting, such as the pay gap reports, will increase transparency and allow analysis to identify where the problems are being caused. Proof that this is effective can be seen from the Gender Pay Gap from 2019 to 2020, where the gap among all employees fell to 15.5%, from 17.4% in 2019. Highlighting what is causing lack of equity will help to determine the ways in which it can be solved or improved upon.
Despite these stats there is a glimmer of hope for improved equity. Within EMEA there has been a rise of 67% in D&I employees with this rapid growth set to continue. More companies are also appointing Heads of D&I and as this becomes more ingrained there will be a greater focus on ensuring equity and making it part of a companies’ strategy and values.
The importance of this issue is also reflected in the fact that governments are also taking action, such as in Iceland where a new plan is to make it the employer’s responsibility to make sure their workers are being paid fairly and equally, rather than it being the employee’s responsibility. This may not work for every country, but it demonstrates that countries can and should be taking an active role in trying to ensure equal opportunities.
There should be a continued focus on improving diversity and inclusion within companies and their hiring practices, as without this the equity problem can not be solved. Fair hiring is a key area as having equity right at the beginning of an employees journey can set up better opportunities in the future. This is especially important when remote hiring as there are more challenges, but this can be addressed by using hiring software that reduce bias.
Within companies, there needs to be a greater understanding of the needs of employees and a renewed focus on performance management to ensure that all employees are having the same opportunities or are being considered for advancement.
Now is the time for companies to be transparent. In order to solve a problem, we must first define and understand it. This means more open and frank conversations, more pay gap reporting and more analysis to help identify where the problem lies.