UK Businesses Embracing Diversity, Equity and Inclusion, But More Strategic Approach Needed

Global trends such as “quiet quitting” and the “great resignation” have increased awareness of employee well-being as it relates to diversity, equity, and inclusion (DEI). Across the globe, the correlation between employee well-being, belonging and increased productivity and output for the company is clear. Yet, not all countries are equal. As DEI grows in global significance, recent research from Sapio, sponsored by Workday, shows that UK businesses are performing at different levels when it comes to DEI.

In 2022 for the second year running, Workday commissioned a survey of global HR and business leaders to better understand the drivers behind and the current global state of diversity, equity, and inclusion. Respondents came from a group of over 3,114 HR professionals and business leaders across 23 countries, including 300 from the UK. 

One compelling finding was that employees who experience a high level of well-being tend to perform better and support company initiatives and core values. Successful DEI programs rely heavily on company wide commitment and are impacted significantly by factors such as laws and regulations, customer demand, and reputational pressure.

Making the Business Case for DEI

For a company, diversity represents a competitive advantage that brings opportunities and benefits not only for the corporation itself but also for society. Diverse teams improve productivity and the working environment, foster creativity and make better use of business opportunities.

However, as with every initiative, organisations must make the business case for DEI. Encouragingly, the research shows that nearly half of UK respondents (48%) said that diversity was recognised, valued and celebrated in their organisation, compared with just 36% globally. 

Encouragingly, the percentage of respondents who said their organisations denied the importance of diversity fell by more than half this year. In the UK, 10% said this was true of their organisation in 2021, dropping to just 4% in 2022. 

Similarly, those who cited the importance of leadership and commitment from the top of the organisation when setting up a DEI function, grew over the last twelve months, rising to 42% from 34%. Amid economic uncertainty and unstable geo-political conditions, it is encouraging to see that across Europe there has been an increase in dedicated DEI roles within organisations compared to last year.  

The research also showed that the UK leads the way when it comes to employee training and recruitment. More than half of UK respondents (56%) said they provide DEI training for employees (compared with 36% globally), while 44% take positive action to encourage diverse applicants (compared with 38% globally).   

Another key finding from UK respondents was that the main business case for DEI within the organisation stems from the need to attract and recruit a diverse workforce (56%), while half (50%) said the goal was to improve staff wellbeing. Nearly three-quarters (72%) of UK respondents said their organisation has a dedicated budget for DEI activities, with more than a third (34%) stating they plan to increase their DEI investment in the next financial year.

However, less than a fifth (17%) of respondents from the UK measure the business impact and perceived value of DEI initiatives, demonstrating a potential communication issue at board level when it comes to such programmes.

Strong Trust in Data, Yet More Work to Do

Encouragingly, 75% of UK respondents said they trust their organisation’s DEI data enough to take action based upon it. Interestingly, this was highest amongst respondents from Financial Services companies (81%) and lowest amongst those working in Retail (65%). UK respondents who said they did not have trust in DEI data, cited data privacy and regulatory compliance issues, ineffective communication with employees, and a lack of appropriate technology as the barriers to doing so. Associated with this apparent frustration with technology, only a third (34%) said their companies were investing in the use of AI and other technologies with bias mitigation capabilities for performance development.

For organisations that do not currently gather data via self-identification, such as the process of allowing employees to voluntarily self-report on one or more diversity criteria (such as through an HR system) a huge 78% of UK respondents said they would enable this capability, and the more data they had, the better.

UK Leads the Way on Diversity Monitoring 

The UK is leading other European countries when it comes to monitoring diversity within the workforce and/or within recruitment. However, it is worth taking into account different regulatory obligations across countries, such as Gender Pay Gap reporting which has been a requirement in the UK since 2017. Gender (74%) and Ethnicity (70%) were the two primary areas monitored in the UK, both of which were well above the European average of 50% and 40% respectively. Gender (61%), Ethnicity (58%) and Disability (53%) were mostly likely to have Key Performance Indicators (KPI) attached to what was monitored.

When it came to the drivers for measuring equality with the organisation, 45% cited monitoring for unconscious bias or indirect discrimination in recruitment, compared with 34% globally.  

While the results are encouraging for UK organisations it’s clear that progress can be made if a more strategic approach is aligned to good intentions. Organisations would benefit from a clear strategy, supported by the right technology and with DEI metrics included as a core part of corporate KPIs. In order to create a cycle of opportunity, engagement, and innovation, a systematic approach with accountable analytics is necessary.