With mandatory pay gap reporting almost upon us, boosting diversity is now making its way up the priority list for senior management teams and boards. But if recent findings are anything to go by, there is still much room for improvement at executive committee level.
Our latest analysis, Cracking the code – a research collaboration between KPMG, the 30% Club, Why Women Work and YSC – found the proportion of women on executive committees in FTSE 100 businesses has remained stagnant for the last two years.
Published last November, the Hampton-Alexander Review set out to tackle this issue. It outlined a roadmap to increase the proportion of women at this level in FTSE 100 companies to a third by 2020, from the current level of 17 per cent. This is certainly a challenging target but, while there is no silver bullet, there are several steps businesses can take to ensure they are on the right track.
Base people decisions on hard data
As organisations work on what their gender pay gap reporting obligations look like, other issues surrounding recruitment, promotion, pay and retention strategies come to light. Workable solutions can only be developed if an organisation fully understands its workforce and any existing diversity issues.
Data holds the key to this. HR departments should focus on measuring the pipeline across their businesses, collating the proportion of women in each role, division and function, as well as promotion and turnover rates, tenure at promotion and performance ratings at the most senior levels. Where the data exists, this can also be replicated for other diversity categories too. Analysing this information will enable HR teams to forecast the future make-up of their workforce and begin to flag problem areas – but the focus must fall on fixing the system, not the women.
Establish the business rationale and set targets
HR leaders should look to embed the business case for gender diversity clearly, focusing on the customer, talent and innovation angles within a company’s corporate culture. Establishing targets is often a logical outcome of this and data analysis will help teams set achievable diversity targets at all levels. This signals serious intent and ensures that managers share the responsibility, keeping them focused on delivering improvements and increasing their willingness to try new approaches to boosting diversity. Only where there is true accountability on an individual level will real improvements be seen.
However, any change seen only as a high-level intention or political move is unlikely to achieve its goals. HR teams must ensure business leaders and line managers see benefit to them for taking action and feel the initiative is up to them to deliver. Establishing targets is a big part of creating this personal ownership.
Define the overall strategy
Once a business has a clear understanding of the issues through the insights and predictions the data can provide, the overall strategy can be developed and agreed upon at the highest level of the organisation. Developing a strategy that aligns to, and is embedded within, the business objectives will mean it is seen as business as usual, as opposed to a set of separate ‘D&I’ initiatives.
When the strategy is set, it’s important to prioritise the order in which the action plan comes together. A common failing is trying to do too much, and spreading capacity too thinly. You are likely to have far greater success by focusing on two or three specific pain points over a two-year period.
Measure and improve
Finally, one of the main sources of frustration in diversity initiatives is that they are seen as separate to the overall strategy and are not fully implemented. While it’s key to prioritise schemes that will be supported within an organisation, continual measurement is essential and HR departments must frequently revisit the data to track progress and highlight where improvements could be made. The buck stops with the business – although HR has a role in not passing it on.
It’s clear that data presents a huge opportunity for HR teams to deliver change, but this cannot be realised without a strategic approach with full organisational buy-in and a change in thought process. Tackling gender diversity is no longer just a talent imperative – customers and innovation are key. HR therefore needs to evolve its relationship with the business it services and promote evidence-based people management, while embedding accountability from the top down.
Ingrid Waterfield is director of people consulting at KPMG UK