First published in 2020
Do you know how well your organisation is doing in relation to diversity? How well do you understand their legal responsibilities in relation to reporting or how well they are doing in comparison to your competitors? Read on to understand more about the different measures of diversity reporting and how you can assess their performance.
Having spent the past four years working in the asset management industry, I have seen the growing investor and employee interest in diversity reporting. As we enter the new year, leadership teams will start to think about their end of year reporting and, while the financial results usually take precedence, the long-term success of any organisation relies on effective decision making – something which is greatly enhanced by diversity of thought.
The UK legislature currently has very limited reporting on diversity, focusing only on differentials in gender pay. Gender pay reporting legislation requires employers with 250 or more employees to publish statutory calculations every year showing how large the pay gap is between their male and female employees. An employer must publish six calculations showing their:
- Average gender pay gap as a mean average
- Average gender pay gap as a median average
- Average bonus gender pay gap as a mean average
- Average bonus gender pay gap as a median average
- Proportion of males receiving a bonus payment and proportion of females receiving a bonus payment
- Proportion of males and females when divided into four groups ordered from lowest to highest pay.
We believe these reporting requirements don’t go anywhere near far enough to make progress on equality in the workplace, particularly as gender is not binary in the first place. Furthermore, in the wake of COVID-19 disruption last spring Liz Truss, Minister for Women & Equalities, made the disappointing decision to suspend gender pay gap reporting – something which we anticipate will be repeated again for the year 2020/21.
When reviewing your own organisation’s reporting, or trying to establish change from within, it’s important to look beyond the basic requirements and think about what you need to measure to understand if progress is being made. At Informal Network we have put together our best practice reporting guidelines which we believe sets out a comprehensive assessment of the diversity of under-represented groups.
Who to measure
Diversity reporting should cover all Protected Characteristics under the Equality Act 2010: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.
Furthermore, we recommend that a measure of social mobility is also included, such as free schools meals or first generation university attendance.
What to measure
For each of the above characteristics, the following metrics should be reported:
- The proportion employees within each characteristic’s subgroup across the whole organisation
- The proportion employees within each characteristic’s subgroup across junior, mid and senior-levels, in addition to the Board
- Average pay gap as a mean average
- Average pay gap as a median average
- Average bonus as a mean average
- Average bonus as a median average
- Proportion of each subgroup receiving a bonus payment
- Proportion of each subgroup when divided into four groups ordered from lowest to highest pay
The above metrics should be tracked for the previous three years, as well as a target for each.
Demonstrating how
In addition to the metrics themselves, every organisation should outline what they have done the past year to further diversity within their organisation and what they aim to do going forward to achieve their targets. This should include leadership team activities, resources, budgets and inclusivity activities to retain minority groups.
When to capture
Equal Opportunities forms should be completed by all candidates during the recruitment process, which should form the baseline for all employees. Subsequently, the global workforce should be surveyed on an annual basis to ensure any changes throughout the year are captured in your reporting.
Where to publish
Organisations have a number of options when deciding where to report these metrics. Those at early stages of maturity will include them in their annual report, whereas those more advanced organisations will produce a separate diversity report.
Regardless of the reporting approach, these metrics must be easily accessible on an organisation’s website for employees, investors and the general public to view.
Leaders in this field
We couldn’t find any organisations that are currently reporting across all protected characteristics, however there are some organisations which we believe are doing a pretty good job in terms of their reporting.
McKinsey & Company
McKinsey’s Diversity information is really easy to find on their website and outlines the extensive steps they are taking to improve diversity across their business. It also outlines the networks they have available for their employees to access, and some of the awards they have won in relation to Diversity & Inclusion. Furthermore, as part of their research, they have completed industry studies on various equality topics; in particular, you may find their study on the impact of COVID on diverse employees interesting.
Accenture
Again, Accenture’s Inclusion & Diversity pages are easy to find on their website. They have a strong commitment from Julie Sweet, their CEO, and outline the action they are taking to drive equality internally and to increase the diversity of the employees. We particularly like how they signpost information for a number of different intersections and have a variety of written, graphic and video content. Accenture also highlights some of the research they have done in this area and how they support their clients to become more diverse.