Half of UK workers say employers have not progressed on D&I goals

07 February 2019 Consultancy.uk

While the UK workplace of today might be markedly different from that of just 20 years ago, efforts to promote diversity by employers seem to have stalled in recent times. According to a new study, almost half of workers in Britain feel their company has not made progress on the matter, with that figure rising among the BAME and LGBT+ communities.

A plethora of thought-leadership pieces, analytic exercises and industrial studies have consistently told business leaders that improving Diversity & Inclusion (D&I) in the workplace can improve business results, as well as benefitting the world beyond the office. By addressing issues including pay gaps and social attitudes in the recruitment process, the LGBT+ and BAME communities and women could better contribute to companies, and be better accommodated by society. Despite the mounting body of evidence, however, with a potential boost to financial performance of 30% up for grabs, corporations continue to drag their feet on the matter.

The latest research from Boston Consulting Group (BCG) makes for damning reading in this regard, with the stunning conclusion that almost half of UK workplaces have failed to advance on the matter of inclusivity. According to a survey of some 2,000 workers based in Britain, nearly half said that their employer had not made any progress on D&I in the past three years. Compared to other survey respondents, LGBT+ workers were the most sceptical of their employers’ efforts to promote a D&I agenda, despite a BCG study finding that the UK is one of the world’s most inclusive business environments for LGBT+ staff.

The idea of ‘pink washing’ – where a corporation with little interest in advancing LGBT+ rights use such activities to launder its reputation and make money – has become prominent in public discourse. 36% of people now believing Pride has become too commercial, and companies like Costa Coffee have faced criticism for using fundraising at the parade to support its internal LGBT+ network, rather than putting company funds toward the matter. In this atmosphere, it is not especially surprising that only 39% of LGBT+ respondents told BCG that they considered their organisation’s management to be committed to D&I goals.

% of UK workers who believe employers are committed to D&I goals

While a slightly higher number of Black, Asian & Minority Ethnic (BAME) respondents stated they believed their company was committed to D&I initiatives, the figure still fell at less than half. In what can at best be called an underwhelming number, only 46% of BAME respondents subsequently said they thought progress had been made in the last three years. Across the EU, a recent study from Grant Thornton found that only 19% of businesses felt ethnic representation in their firm was an issue, while of those only 6% were taking action on the matter.

Respondents identifying as women were more likely than these groups to suggest there had been progress, although obviously interpretation of this data should make allowance for the fact respondents could identify as more than one of these categories. 55% of women told BCG that they felt the last three years had seen their company progress in terms of D&I. This supports another study from Grant Thornton, which found that the proportion of businesses with at least one woman in senior management has grown to 75% in the last year, representing gradual progress on the matter among the world’s largest firms.

While 74% of all respondents said they were aware that their organisation had launched diversity programmes, only 33% of the intended beneficiaries said they had gained anything from them. At the same time, there was a notable disconnect between these groups and those traditionally less-marginalised in society and the workplace. Respondents identifying as white heterosexual men exhibited the highest belief that their workplace was doing enough to promote D&I interests, at 63%. This figure in particular might well hold the key to why companies are still failing to live up to the hype surrounding their D&I goals.

Time for action

Barely 3% of Britain’s most powerful and influential people are from black and minority ethnic groups (while making up 13% of the population), according to a 2017 analysis from the Guardian that highlights continuing inequality despite decades of legislation to address discrimination. Meanwhile, in the same year only seven of the CEOs leading FTSE 100 companies were women, increasing by from four in 2014. With so little movement on D&I, and with those most likely to control companies hailing from the group most satisfied with progress on the matter, it is small wonder that more rapid change has been stifled.

Such is the extent that D&I efforts have stagnated, that a growing number of voices are calling for regulatory intervention to improve the situation. According to an EY study of Irish business leaders in 2018, this has even taken route in the corporate sphere, where leaders were roughly split on the notion of using the law as a tool to encourage diversity. Only a minority of 35% are completely opposed to the idea, an interesting finding given the business world’s traditional opposition to state intervention.

The study's release provoked a response both from industry and society at large. It appeared in a range of publications, including noted LGBT+ news provider Pink News, as well as business news publication Forbes.

From the business world meanwhile, Sarah Kaiser, Employee Experience, Diversity & Inclusion Lead at Fujitsu EMEIA, commented, “What this report makes clear is that anyone connected to an organisation in any capacity wants to hear how their employer feels about D&I and what they’re doing about it. The time has passed for apologising, organisations need to urgently take action and ensure they are facilitating an entirely diverse and inclusive workforce. It is only by engaging a diverse array of people in business that we can hope to protect the future competitiveness of the UK economy.”

BCG’s survey of 2,000 British workers was conducted as part of a larger study researching the most effective diversity and inclusion policies, involving a total 16,500 respondents worldwide. The figures gathered from the UK suggest that British workers are marginally more likely to feel the benefit of corporate diversity drives – although considering just 25% of female and minority employees said they benefit from such programmes, that is not an especially marked achievement.

Matt Krentz, a Senior Partner at BCG and a co-author of the global report, said, “Our data also identified a back-to-basics approach when it comes to improving diversity programs, identifying three fundamental prerequisites for organizations to create change. These measures include focusing on anti-discrimination policies, engaging in bias awareness training, and removing bias from evaluation and promotion decisions.”

Related: Half of BAME citizens fear Brexit may impact career progression.

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Women remain underrepresented in UK's hospitality industry leadership

12 April 2019 Consultancy.uk

Female engagement at the top level of the UK hospitality industry is still lagging, with the vast majority of decision-making roles continue to be held by men. Only 7% of the industry’s FTSE 350 CEOs are women; however, the pay gap in hospitality and leisure is far better than in other industries, at a median of approximately 7%.

The hospitality, travel and leisure (HTL) sector is one of the UK’s largest employers, with 3.2 million people working in its segments. Despite a poor 2018 in terms of tightening consumer spending, the industry is still one of the top sectors in terms of economic activity, hitting £130 billion last year – besting the UK’s automotive, pharmaceutical and aeronautical sectors’ combined activities.

While the industry is one of the country’s largest employers, it still faces considerable issues around diversity at the top. New analysis from PwC has explored the matter, as well what initiatives the industry has engaged to open up its top ranks to a more diverse background.

Female representation at board level for UK companies and HTLs

According to a survey of CEOs, Chairs or HR Directors of over 100 of the most significant leisure businesses across the UK, the hospitality industry has a relatively male-dominated top level. This lags behind the FTSE 100, where companies have female board level representation at 32.2%. Meanwhile, the figure for the combined executive committee and direct reports stands at 28%. This is well above FTSE 250 levels, where female board level representation stands at 22.4% and executive committee & direct reports stand at 27.8%.

For the hospitality industry as a whole, board level representation came in at 23.6%, with FTSE 350 for the industry performing slightly better at 25.1%, while non-listed companies performed considerably worse at 18.2%. The firm notes that the figures hide that while some companies are making strides to improve equality, others are not moving forward – with the positive result reflecting more often the good work of some, while others are not taking the issue seriously in their agenda setting.

Blind spot

The study states, however, that while the overall numbers are relatively strong, the industry has a number of acute weaknesses. These include CEO numbers, with only 7% of HTL FTSE 350 companies helmed by women and 11% of non-listed companies led by female CEOs. Meanwhile, female chairs at FTSE 350 companies for the sector stand at zero. In terms of wider diversity representation, only 1 in 33 leaders at industry companies is from a BAME background.

Pay gap for HTL and hospitality

The report noted discrepancies between FTSE 100 companies and FTSE 250 in terms of improving the number of women at executive level. The majority have met the Hampton-Alexander Review target of 33% women at board level, up from around 25% in 2016. However, the remaining ~40% are not on target, and are unlikely to meet the target by 2020. A similar trend is noted when it comes to executive committee and direct reporting numbers.

Jon Terry, Diversity & Inclusion Consulting Leader at PwC, said, "To make real progress in diversity and inclusion, businesses need to elevate it onto the CEO’s agenda and align diversity & inclusion strategy to the fundamentals of the business."

Tracking progress FTSE 250 level

However, one area where hospitality travel and leisure companies are outperforming other companies in the wider UK economy, is the mean and median pay gap between men and women. PwC found that the median of the wider UK economy comes is approximately 14% – with upper quartile companies noted for a gap of low 20%, and lower quartile companies noted for differences of around 2%.

The median pay gap for HTL comes in at well below 7%, with the median close to parity. There are considerable differences, however, with hospitality at 7%, while travel comes in considerably higher, at 22%. The latter figure reflects fewer women in higher paid pilot and technical positions within the industry.