Raising our game on diversity, equity and inclusion

HR and global mobility specialists are redoubling their efforts around diversity, equity and inclusion (DEI), bringing the function closer to people strategies and the heart of global organisations.

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Think Global People Spring 2022 Issue
This article is taken from the latest issue of Think Global People magazine.
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The pandemic showcased the strategic importance of HR and global mobility expertise in international organisations. Both functions’ value became clear as organisations raced to remain compliant and compassionate for their employees.Today, as talent shortages and attrition rates rocket, the heightened visibility of global people professionals is an important opportunity for the function finally to close the circle with talent management and deliver on key people strategies, particularly around diversity, equity and inclusion (DEI).DEI is a key focus for forward thinking employers. Potential investors, as well as potential recruits, and legislators are increasingly looking for more transparency about how – and how fairly – companies deploy their most important assets.

Inclusive global mobility

AIRINC’s Mobility Outlook Survey 2022 describes global mobility’s transition to the strategic centre of people management. Noting how global mobility “has honed its compliance skills”, it identifies the key challenge now is to focus on helping to attract and retain talent as talent shortages become the dominant narrative.Greater flexibility and choice in relocation terms are just some of the ways companies are supporting talent management.As programmes become more customisable, “employees are gaining the ability to personalise their relocation benefits, select the delivery of those benefits and, in some cases, even choose when and from where they report to work,” says AIRINC.Enabling individuals to craft bespoke packages also promotes greater diversity, equity and inclusion (DEI) among globally mobile populations. In AIRINC’s 2022 survey, 38% of companies said they were increasing employee flexibility and choice around assignment type and package to promote DEI.A similar number (39%) were supporting DEI by reviewing policy language for inclusive tone, while one in five (21%) were “actively considering diverse candidates for assignments.” A third (31%) reported global mobility is not taking any specific steps to promote DEI.

Opportunity gaps persist

International experience is a key aspect of career progression, as well as self-actualisation, engagement, retention and inclusion more widely. GM expertise therefore has a vital role, along with senior leaders, HR and colleagues in global talent, to include and uplift under-represented groups, including women, people from minorities and individuals from lower socioeconomic who historically have found it difficult to make it to the top echelons of companies.The scope of the DEI challenge in global mobility and organisations more broadly is reflected in data from Mercer’s latest UK Gender and Ethnicity Pay Gaps report, published in January. “Our research reveals employers are struggling to narrow their pay gaps,” commented Michelle Sequeira, Diversity, Equity and Inclusion Consulting Leader, Mercer UK.“Key drivers of pay gaps range from issues with attracting and retaining women, to failing to eliminate the barriers to career progression that prevent female and diverse employees from entering more senior roles.”Fewer than one in three (30%) employers were able to reduce their gender pay by 2% between 2019 and 2020. Mercer also found that 18% of employees reported an increased pay gap from 2019 to 2020.The latest FTSE Women Leaders Review, published in February, details female representation at board level in the UK’s largest 350 companies and shines further light on this issue. Behind the headline figure of women holding 39.1% of all roles, there are just 18 female CEOs across the FTSE350.Despite this clear lack of representation, the UK is now second only to Norway for having the highest percentage of women on corporate boards, highlighting the global scale of the issue.Fiona Cannon, Group Sustainable Business Director, Lloyds Banking Group, which along with KPMG is a Review sponsor, said: “There is no shortage of talented women; we need to ensure the opportunities are there for them to succeed.”

Overcoming invisible barriers

In isolation, mandatory gender pay gap reporting – and more inclusive and flexible mobility policies – will not improve opportunities for all women. However, pay gap reporting does help make visible and provide useful shorthand for the structural, conscious and unconscious obstacles to greater equity of opportunity for women in the workplace, as well as encourage accountability and ownership of this important issue among employers.For this reason and others, the UK’s largest organisations are now facing pressure to assess and publish their pay gaps by ethnicity in a similar manner. Official government research in 2019 found that people across six of the ten categories earned less per hour than the median White British person.MPs on the cross-party Women and Equality Committee called in February for the introduction of a law from April 2023 as “a first step in addressing pay disparities between employees from different ethnic backgrounds”. The move comes five years after Baroness Ruby McGregor-Smith, former Chief Executive of Mitie Group and now CIPD President, published a government-commissioned review into race in the workplace.“BME individuals in the UK are both less likely to participate in and then less likely to progress through the workplace, when compared with White individuals,” she concluded then.“Barriers exist, from entry through to board level, that prevent these individuals from reaching their full potential. This is not only unjust for them, but the ‘lost’ productivity and potential represents a huge, missed opportunity for businesses and impacts the economy as a whole. In the UK today, there is a structural, historical bias that favours certain individuals. This does not just stand in the way of ethnic minorities, but women, those with disabilities and others.”Mercer suggests that the drive to making inclusion and equity visible through pay gap reporting is favourably received by employers.Its UK Gender and Ethnicity Pay Gaps found 65% supported legislation enabling ethnicity pay gaps to be reported on and addressed. Almost half (45%) claimed they felt under pressure to conduct ethnicity pay gap analysis.Perhaps most encouraging is that three out of four employers (74%) have already collected pay data by ethnicity or are planning to do so in future and 31% have published or are planning to publish their pay gaps. Yet as Michelle Sequeira says: “To truly make a difference, employers must look beyond their pay gaps... to widen the pools from which they recruit and take steps to reduce unconscious bias in processes. Most important of all is creating a genuinely inclusive workforce that allows people to be themselves and thrive both in and outside of work.”

Putting the "S" in ESG

The scope for GM expertise to work with HR and talent teams to make the playing field more equal for global people is wide. That senior leaders are already onboard, as Mercer’s research suggests, is a bonus.Responsible business and more environmental, social and governance reporting (ESG) is offering the potential for employers to really offer detail on how their people are their greatest asset. One approach suggested by the CIPD is to improve the transparency of all aspects of workforce reporting, including workforce composition, employee relations and wellbeing, reward and recognition, skills and capabilities.“There is already strong momentum behind wider corporate reporting across environmental, social and governance (ESG) but it’s clear more needs to be done on the ‘S’ part of ESG,” observed Peter Cheese, launching the CIPD’s report, How do Companies Report on their Most Important Asset?, which is published with workplace pension and saving representative PLSA, and pension scheme Railpen.“Now is the time for more transparency and action, but this requires more guidance and clearer frameworks for reporting. The creation of an accepted baseline framework for workforce reporting would help organisations report how they manage and invest in their people in a clear and consistent way and improve reporting practices over time. In turn, this would improve key outcomes such as staff development and retention, employee inclusion and wellbeing, and enhance organisational performance.”HR’s role in improving inclusion through action and stepping up to the challenge of reporting is being matched by the investment community, which is demanding more transparency and better quality reporting on people issues.In March, the UK’s Investment Association, the trade body for investment managers, reported the diversity along with climate change are top of mind for investment managers this AGM season. In line with the demand for this business-critical knowledge and insight into people risk and opportunity, the Association’s IVIS (Institutional Voting Information Service) is highlighting with a ‘red top’ FTSE 100 companies that fail to meet the Parker Review target of having one ethnically diverse board member and an ‘amber top’ FTSE 250 companies that do not disclose the ethnic diversity of their boards or have an action plan to achieve the Parker Review targets by 2024.The information service will similarly expose FTSE small cap companies where women represent 25% or less of the board and 25% or less of their Executive Committee.This builds on the existing red top approach taken for FTSE 350 companies where the expectation is for women to represent at least 33% of the Board and 28% of the Executive Committee and their direct reports.“Investment managers want to support companies to deliver longterm, sustainable returns on behalf of savers and pensioners up and down the country,” said Andrew Ninian, Director of Stewardship and Corporate Governance at the Investment Association. “Climate change and the transition to net zero is not an issue which can be left for future management teams or boards, investors wish to see the actions the current leadership will be taking, and investment managers will be watching closely this AGM season to ensure they are doing just that.“While good progress has been made with greater female representation on boards and in senior leadership across the FTSE, investment managers now want to see this positive momentum include ethnic minority representation on boards and are calling on all FTSE 100 companies to meet the Parker Review target this year.”

Framing the issue

The direction of travel for capturing key workforce data is clear and momentum is building towards full disclosure and workplaces that are more diverse, equitable and inclusive. GM has a critical role to play in working out how its processes and policies can engage a greater diversity of people and include people in an equitable matter.There are big social and economic challenges ahead and we need diversity of thought and experience to overcome them.Building for strength in our sector means including and reflecting societies and marketplaces in all their diversity and talents. The key question for global mobility and the relocation supply chain is how can we support global people and leaders to deliver this?
Download the Summer 2022 Edition

Read more about the Great Return in the Spring 2022 issue of Think Global People.

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