CareersEmbracing diversity: What steps are employers taking to create more inclusive environments?

Embracing diversity: What steps are employers taking to create more inclusive environments?

Creating a flexible and inclusive environment inherently attracts fresh talent, bolsters retention, quickens development and motivates talent.

Over the course of the last few decades, diversity and equality have undeniably taken centre stage as two of the biggest issues niggling away at large businesses. Incessant lobbying, a shift in popular opinion and various pieces of legislation have initiated a societal shift that organisations simply cannot afford to ignore. Yet despite that hard work, progress has still been relatively slow – particularly surrounding remuneration. Changes to the way in which companies are obliged to report how much they pay workers could finally jumpstart change in 2019.

The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 was widely billed as the biggest legislative game changer for women in the workplace since the Equal Pay Act of 1970. Implementation of the rules began in 2018, with a new phase set to come into force this April. The legislation ensures all UK companies with more than 250 employees on the books publicly report their gender pay gap figures. The legislation’s initial 4 April 2018 deadline saw more than 10,500 companies publish their pay figures, generating 94% compliance.

The mass publishing of gender pay figures across all of the UK’s large companies certainly generated a huge amount of civic debate and media scrutiny – most notably at the BBC. But the regulations are likely to make just as big a splash in 2019, when the requirements will be extended to include a wider range of organisations operating in the UK. Public sector firms will be expected to publish and submit their data to the UK Government by 30 March 2019, while businesses and charities must again submit by 4 April.

Elsewhere, new regulations introduced in January will make it a statutory requirement for companies listed on the London Stock Exchange with over 250 employees to publish the ratio between their executive team salaries and the median pay of UK workers.

That shouldn’t mean a whole lot of extra work in the short term for treasury management teams. Under the rules, employers must publish six metrics: their mean gender pay gap, median gender pay gap, mean gender bonus gap, median gender bonus gap, the proportions of men and women getting a bonus and the promotion of men and women across four pay quartiles. These calculations need to be based around the snapshot date, which is the most recent tax year, and the regulations provide fairly simple and detailed instructions on how to calculate the figures.

In fact, the biggest concern for teams will be mitigating reputational risk, which is bound to cause some anxiety for businesses looking to improve pay gaps that lawmakers and media pundits have decried as being unacceptable in 2019.

But before delving into how some large companies are already working to close those gaps, it’s worth exploring what we actually learned following last year’s initial wave of pay reports.

According to 2018’s reporting figures, women’s mean hourly pay was 14.3% lower than what men were paid. Just 12% of companies required to report their pay figures had a pay gap in favour of women, and over 25% of reporting firms opted against providing any sort of narrative in order to explain their figures. Needless to say, some of the UK’s more high-profile organisations have spent the last 12 months stepping up their game in terms of attempting to bridge the gender divide – and to be honest, there have been quite a few success stories in the run up to the government’s next reporting deadline.

How are companies working to erase the gender pay gap?

First and foremost, it’s worth pointing out most executive boards and shareholders seem to appreciate that it’s in everyone’s best interest to make their organisations more diverse.

Creating a flexible and inclusive environment inherently attracts fresh talent, bolsters retention, quickens development and motivates talent. Yet up until last year’s bombshell reporting figures, it seems many employers failed to connect the dots or create measurable goals capable of fostering those flexible environments.

According to research conducted by the Confederation of British Industry (CBI), business owners are working at breakneck speed to fix that. December’s CBI/Pertemps Employment Trends Survey 2018 found 93% of UK firms are “actively tackling” their gender pay gap. Around 60% of the 350 businesses surveyed told the CBI they believed diversity helped them to attract and retain staff, and a further 50% said it made their business better.

In terms of actions being taken to reflect those views, businesses now need to address traditional gender role divisions, a lack of female representation across senior roles and incentivise and rejuvenate company cultures to address why women often settle for lower paid work within particular companies and industries.

Right or wrong, much of this centres on the presumed role across many social strata’s in which women are still assumed to be the primary caregivers in traditional family structures. Questions of recruitment processes and potential bias have also been raised, while others are now considering regular measurement and targets to track female applicants, hires and promotions.

So, who’s leading the pack in terms of taking these actions and chalking up genuine progress?

Last April, broadcasting giant Sky reported a gender pay gap of 11.5%, with a bonus gap of 40%. CEO Stephen van Rooyen conceded there was a lack of women across senior, digital and technology roles driving the gap – and so the broadcaster has subsequently pledged to establish a 50:50 gender balance among senior roles by 2020. What’s more, Sky has committed to ensure that every single position now generates a short list that is equally split by gender.

That sounds pretty ambitious, but the measurable targets are crucially supported by a series of engagement programmes designed to hold the company to account and encourage women to take on bigger and better roles within the company. The Women@Sky initiative now runs a mentor scheme in which experienced women help nurture the careers of junior female employees – and to retain staff and give female workers the opportunity to advance their careers, Sky has critically introduced an additional range of on-site services, tech solutions and an emergency family care benefit geared at supporting working parents.

Consumer goods giant Unilever UK is another organisation worth looking to for examples of best practice. Unlike most reporting companies in 2018, Unilever published figures indicated near pay parity in 2017 with a mean pay gap of just 1.9% and a 50:50 gender split at the management level. This equality certainly wasn’t achieved overnight, and it’s deeply engrained in Unilever’s company culture.

The company sponsors extensive mentoring, training and development programmes, including those designed to help workers identify and combat unconscious gender bias. Generous shared parental leave packages, gender balanced outreach programmes for STEM graduates and dedicated networks devoted to female development have all helped the company to establish an inclusive work culture. Unilever has even started to offer paid time off for fertility procedures and emergency childcare when a parent’s regular support system is unavailable.

Accenture’s less attractive gap of 16.7% is being swiftly nipped in the bud based upon the examples of Sky and Unilever, with the business now committed to reach a totally gender balanced workforce by 2025. Thanks to new Employee Resource Groups, women now have improved access to support networks, training and leadership – while all managers are being pushed to undergo training on inclusive and unbiased leadership skills. Flexible working options have already been rolled out to improve retention amongst female workers.

Diversity goes beyond gender

The media frenzy over the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 has allowed gender to take centre stage in the battle to improve workplace diversity over recent months – but gender is certainly not the only place employers are working to improve diversity.

CBI research found in December that 88% of businesses see achieving a diverse workforce as vital to their future success – with 94% of companies surveyed claiming they’d taken action within the last five years to build more inclusive workplaces. Likewise, 62% of companies said they’d improved progression opportunities for workers of different backgrounds, and 55% of employers reported they were investing in diversity training for managers in 2018.

Bearing in mind this move towards embracing diversity, it’s little wonder the government launched a consultation on ethnicity pay gap reporting in October 2018.

The UK Government’s McGregor-Smith Review reported in 2017 that by utilising the full potential of black and minority ethnic workers, companies could add £24bn to the UK economy, representing a 1.3% GDP rise. That said, underemployment among these communities is nearly a third higher than white workers – which has led to a recent push for solutions. Despite that push, the CBI reckons only 17% of businesses are currently prepared to monitor average pay by ethnicity if the government pursues such a strategy.

While there’s no timestamp on that sort of initiative, there’s a certain feeling of inevitability surrounding further reporting requirements. In the case of gender, they do appear to have given industry the nudge needed to instigate real change. Not only that, but businesses have already started to push for similar support networks designed to enhance and support workplace diversity around ethnicity, sexual orientation, disability and more.

Again, Sky offers a great corporate example in its Body&Mind@Sky initiative, which raises awareness of disability, mental health a long-term illness – while Multiculture@Sky and LGBT@Sky are working to achieve pay parity and support for workers from minority ethnic backgrounds and the LGBT+ community, respectively.

Taking a step back, it’s important to note these types of initiatives aren’t likely to generate overnight transformations or totally erase company pay gaps in the span of just one year. These are long-view programmes designed to target generations-old issues and redefine company cultures – and although they cannot be expected to eradicate pay inequality or massively improve workplace diversity by the government’s next reporting deadline, they’re certainly a huge leap in the right direction.

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