Diversity Challenges Facing Firms In The UK In 2019
It’s been a busy year for the topic of diversity in the workplace in the UK and Europe. Most of the headlines have been dominated by the #MeToo movement but there has also been other challenges, such as the lack of action on gender pay reporting, the under-reported topic of the ethnicity pay gap and the on-going issue of an ageing workforce.
Mandatory ethnic pay reporting is further up organizations’ agenda after the UK government recently announced plans to consult on it in a bid to boost ethnic minority representation in the workplace.
In 2016, the government commissioned Sir John Parker to lead an independent review into the ethnic diversity of UK boards. The Parker review recommended that each FTSE100 board has a list of directors from an ethnic minority background by 2021. Ethnic minorities are woefully under-represented in UK boards: only 2% of director positions are held by people from ethnic minorities who are UK citizens, despite this group making up 14% of the total UK population.
Ethnicity and race have been embarrassingly ignored, remarked Charlotte Sweeney, managing director of Charlotte Sweeney Associates. “The work with the Parker review is good but organizations are not picking this up as quickly as they should. They need to focus on this.”
There is still a lack of action by organizations in the UK when it comes to reporting on their gender pay gaps. Currently in the UK, legislation requires organizations with more than 250 employees to report details of its gender pay gap once a year but not the action to address it. The Equality and Human Rights Commission (EHRC) called for a new law obliging employers to publish plans for tackling wage disparities, after finding only one in five had drawn any up. A study of 440 employers was carried out by the EHRC, including 40 FTSE 350 organisations and others from sectors such as finance, manufacturing and the arts. Just 11% had set pay gap targets for themselves each year, which would allow them to measure progress over time, it was found.
The biggest issue facing the HR profession in 2019 is what while women perform 66% of the world’s work, those women who have full-time jobs only earn 77% of their male counterparts’ earnings, said Professor Jane Turner, pro vice-chancellor for enterprise and business engagement at Teeside University.
“While women worldwide are closing the gap in critical areas such as health and education, significant gender inequality persists in the workforce. If the gender pay gap were to be closed today, women would on average receive a £6,300 increase. Gender inequality is not only a pressing moral and social issue but also a critical economic challenge. If women, who account for half the world’s population don’t achieve their full economic potential, the global economy will suffer.”
Lots of organizations talk about looking at the gender wage gap and what they should be doing about them, remarked Brian Kopp, group vice-president, HR practice for Gartner.
“A lot of organizations are scared of sharing the analysis but if they find a problem, then they’ll have to solve it. We’re also finding that even for companies that have closed the gender wage gap, they’re often making one-time adjustments and not making systemic pay changes. Many companies are not changing their systems and policies and the net effect of that, is it’s highly unlikely you will see any significant closing of the gender pay gap.”
Justine Campbell, managing partner for talent for EY, UK and Ireland believes that there will be a change in how organizations view and talk about diversity and inclusion, with a greater focus on “belonging”.
“Employees that feel like they “belong” is a goal that many organizations are trying to achieve. When a person feels a true sense of belonging at work, we know they thrive and perform at their best.”
Sweeney believes that one area of diversity that is ignored and which will become increasingly important in 2019 is behavioral economics.
“This is all about creating changes in behaviors. An example of that is one organization looked at its promotion process and automatically didn’t talk about people they thought were brilliant, only those that had problems. A behavioral change would be talking about everyone in the promotion process. There can be big assumptions around “star” performers in organisations and not everybody might think that individual is a “star”. This is about unpicking what organizations can do and creating slightly different habits in how they do it.”
Beth Miller, vice-president of Alexander Mann Solutions, commented that their clients are increasingly taking pro-active steps to improve gender equality in the workplace.
“The aftershocks of the #MeToo movement and the introduction of gender pay gap reporting look set to permeate workplaces in 2019, with HR leaders ramping up efforts to create environments where female talent can thrive. Innovative HR leaders are now realizing that flexible working options can have a significant and positive impact on the retention of female talent. However, rather than making incremental changes to flexible working policies on a case-by-case basis, strategists must look at all roles in their organization now, if they are to reap tangible results.”
The perennial topic of women on the board has revealed that progress has been made in terms of gender diversity for non-executive roles. However, the rate of board appointments for women in executive director roles for the FTSE100 remains sluggish.
Carin Taylor, chief diversity officer at Workday, believes that companies will intentionally invest in initiatives that help recruit, retain and advance women in the workplace.
“For example, increasing the number of women on executive boards, forming executive cohorts to support under-represented groups and developing returnship, mentorship and sponsorship programs.”
Taylor also points out that the demographics in the Western World’s workforce are changing with baby boomers retiring later than previous generations.
“Millennials and Gen Xers are becoming workplace leaders and the emerging primary caregivers for the elderly. With this workforce shift comes new generational demands and companies will need to adapt their offerings and policies to accommodate this diverse workforce such as a wider range of healthcare plans, flexible time off and care-giving benefits for employees.”
The demographic timebomb has been around for the past 15-16 years, reflects Sweeney.
“Organizations can no longer ignore it. Organizations need to be looking at the older end of the workforce as I still see age discrimination at the older end. There is also not enough being done to transfer knowledge from the older worker and learning from past experiences.”
Source – www . Forbes . com