Diversity and inclusion in the workplace | The state of play in 2022
In 2022, we’re undoubtedly living in the most progressive society ever known in the West. But when it comes to fundamental areas like the equal treatment of employees, how far have we really come?
For instance, some studies suggest that women are still heavily outnumbered in positions of power, and others point to lower interview success rates for candidates in racial minority groups.
So while era-defining movements such as MeToo and Black Lives Matter may seemingly have set the stage for a new era of equality and inclusivity, it’s plain to see that there’s still plenty of work to be done in the corporate world.
With recent reports providing an updated picture of how businesses are performing, let’s take a closer look at how some of the business world’s key diversity and inclusion (D&I) issues are shaping up in 2022.
The ethnicity pay gap
The subject of pay remains one of the key areas of contention within the D&I conversation. And while much of the dialogue on this topic tends to surround gender, the ethnicity pay gap is becoming an increasingly relevant matter.
For instance, a study released by HR DataHub in February found that just 64 UK businesses published their ethnicity pay gap data in 2021, down from 129 in 2020.
Upon the release of the report, HR DataHub called on the government to introduce mandatory ethnicity pay gap reporting.
Just weeks earlier, the same demand was made by the Women and Equalities Committee – a cross-party parliamentary group made up of MPs. In a new report entitled Ethnicity pay gap reporting, the group urged the UK government to introduce the mandate by April 2023.
The report also recommended that the new laws “should include the requirement for employers to publish a supporting narrative and action plan”.
A poll conducted by the Black Women in Leadership (BWIL) network paints a similarly discouraging picture when it comes to pay inequity in 2022. It uncovered that nearly half (45%) of black women in white-collar jobs believed they would miss out on promotions despite being just as qualified as their non-black female colleagues.
The research, which was conducted throughout 2021 and released in February 2022, also found that more than two thirds (68%) of black women experienced racial bias at work. This increased to 84% among those in senior management positions and 87% among those in senior executive positions.
What’s more, over half of black women in senior executive positions reported that they had resigned due to racially-related unfair or uncivil treatment. Overall, a third of all black women said they had resigned for these reasons.
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Change at the top?
Another of the business world’s biggest challenges when it comes to D&I is the persistence of gender inequality in leadership positions.
This was recently affirmed by the results of Fawcett’s 2022 Sex and Power Index. The biennial report once again found that men outnumber women 2:1 in positions of power in the UK.
“The pace of change is glacial in the majority of sectors”, it said, revealing that less than a third of the UK’s top jobs are held by women.
The report went on to outline a number of recommendations for initiatives to improve the gender pay gap, including formal targets for organisations, improved pay gap reporting, and flexible working.
Contrastingly, however, a new report has found that nearly 40% of FTSE 100 board roles are held by women – up from just over 36% in 2012.
The study, which was conducted by the government-backed FTSE Women Leaders Review, also found that 85 of the top 100 listed companies have met the government’s target of having a third of board positions filled by women, while almost half of the FTSE 100 firms’ now have boards that are made up of at least 40% women.
What’s more, early March saw the unveiling of the second UK government-backed equality initiative in as many months – a pilot project to increase pay transparency and close salary gaps for female job applicants.
Part of the government’s ‘levelling up’ strategy, the project will require participating employers to list salary information on their job adverts, in addition to refraining from asking applicants about their salary history.
Having launched the initiative on International Women’s Day, Boris Johnson said the government wants to “help businesses who want to go even further in attracting women to their positions”. “Evidence shows that listing a salary range on job adverts supports women to negotiate pay on a fair basis”, the Prime Minister said.
Alongside this, data from The Office for National Statistics can act as a further source of encouragement. There has been a steady, albeit marginal, year-on-year fall in the gender pay gap over the past 20 years, it shows.
The rate of decline appears to have been largely unaffected by the introduction of reporting requirements, indicating that the 2017 Regulations have failed to act as a catalyst for change.
To achieve equal representations, we need to break down the barriers that hold women back from achieving their full potential."
The Fawcett Society
What more can be done?
While there are promising signs that businesses’ D&I efforts are translating into progress, some of the reports that have emerged recently will give employers and their employees cause for concern. So what can businesses and HR do – and what are they required to do – to accelerate the pace of change?
Legally speaking, businesses must fundamentally ensure they do not behave in a way that breaches the provisions of the Equality Act 2010. Some businesses are also required to report on their gender pay gap in order to comply with the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. These regulations apply to large private and voluntary sector employers – defined as those with 250 or more employees – on 5 April of each year.
With the deadline looming, employers must prepare to publish:
- Their overall gender pay gap figures for relevant employees (calculated using both the mean and median average hourly pays);
- The proportion of men and women in each of four pay bands (quartiles), based on the employer’s overall pay range;
- Information on the employer’s gender bonus gap, that is, the difference between men and women’s mean and median bonus pay over a 12-month period; and
- The proportion of male and female employees who received a bonus in the same 12-month period.
The mandatory gender pay gap reporting requirements for public authorities are set out in the Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017.
A review of the gender pay gap reporting regulations is due by April 2022.
Moreover, there are of course other motivations for putting D&I high on the agenda. Ensuring the best talent is selected for available roles, regardless of gender or ethnicity, is not only required by law but is also good for business. Amongst other things, there are well-documented benefits to be realised in respect to team morale and business reputation.
Some of the ways to harness these benefits include being transparent with staff, setting targets for improvement (perhaps in the form of a pledge), and reviewing ways of working to ensure there’s no negative impact on women, particularly following the pandemic.
Beyond that, businesses may also wish to carry out salary reviews and/or benchmarking exercises in a bid to close any existing pay gaps. With pay at the forefront of people’s minds due to the cost of living crisis, coupled with recent conversations about equality in the wake of International Women’s Day, now would appear an optimum time to do so.
Diversity and inclusion support from WorkNest
If diversity and inclusion is a priority for your organisation in 2022 and you would benefit from specialist support, WorkNest’s fixed-fee Employment Law and HR service gives you access to your own small team of dedicated professionals, who can advise on everything from your obligations under the Equality Act to equal pay and potential claims, UK reporting requirements, and legal queries surrounding the recruitment processes.
And if you’re in need of more strategic support or help delivering a particular project, our specialist HR team can deliver a range of D&I-related HR Consultancy services, including working with you to:
- Develop a robust and structured salary review process
- Ensure recruitment methods are centred around skills for the role and eliminate bias
- Improve and review your family friendly offering
- Introduce pay banding and a salary structure based on job benchmarking
- Set up an HR system (CaseNest) to make sure that data is monitored and stored
- Provide training regarding unconscious bias and diversity and educate managers
For more information, get in touch with our team on 0345 226 8393 or request your free consultation using the button below.