How to collect, analyse and use diversity data is firmly in the spotlight, as ESG Clarity’s own recent analysis and now a new LGBT Great/EY study have shown: the investment industry is recognising its importance in informing business decisions, but “confidence and trust are major barriers”.
Released this week, LGBT Great and EY’s Holding up the mirror report found 80% of human resource leaders said collecting diversity data should be a firm priority for 2021, but just 20% stated they are good at it, due to disjointed industry efforts, inadequate systems, distrust, lack of understanding and legal and operational barriers.
The report was based on an LGBT Great survey of 40 organisations in the investment, wealth management and savings industry headquartered in the UK and US, and a Diversity Project survey of 20 global HR leaders in the investment, wealth management and savings industry.
“Confidence and trust are major barriers,” Jon Terry, board member and strategic adviser on people issues at Diversity Project UK, said at an event to launch the report. “Leaders must treat [diversity issues] like any other business issue.”
When data is being collected, it is almost always at one point – the time of recruitment. The study found 95% of firms collect data at the point of recruitment, with 50% only collecting it then.
“Capturing data has to become routine,” River and Mercantile group CEO James Barham said at the event, adding his firm has embedded diversity data collection into its HR system.
Barham said communication is essential to make sure employees know why their data is being collected and how it will be used.
This mirrors the findings in ESG Clarity’s own analysis. “People who are improving are ones who are communicating the data the best, and I don’t mean ‘purpose-washing’ – ‘look at our glossy report’ – I mean actually communicating with their employees and bringing them along on and their journeys, and saying this is what we’re thinking of moving towards, how does that sound?” Anthony Horrigan, CEO of Spktral, told us in March, as well as outlining common mistakes firms make when collecting and presenting gender diversity data.
See also: – The dos and don’ts of diversity data
The LGBT Great/ EY report suggests 10 questions employees can ask about their data being collected, the answers to which may enhance communication. These include: Are you giving me the ‘why’? Are you using inclusive language? Are you talking to me on the right platform? How are you engaging diversity champions and allies? And more.
One question suggested is ‘are you using the data constructively?’ There’s no point collecting data for the sake of it, Sarah Maynard, global head, external inclusion and diversity strategies at CFA Institute, told ESG Clarity in March.
“There are smart ways to use data, as long as it’s clearly linked to business strategy goals – which then means the leadership and everyone else will own those goals as well,” she added.
The LGBT Great/EY report gives five suggestions for firms looking to enhance their diversity data collection strategies:
- Dedicate time to education and fostering an environment of sharing real life stories of discrimination, better understanding privilege and how diversity data will be used;
- Adopt global and organisation-wide principles and commitments where possible, but support and tailor local initiatives as regional and country legislation might differ;
- Create board and senior leadership buy-in to the case for change, build allies and culture of trust to support employee disclosure;
- Invest in the technology infrastructure and data analytics capabilities to track progress, take all opportunities to capture data through the employee life cycle and stages of hiring, understand who doesn’t join you and why;
- Bring outside-in thinking, learn from other sectors and organisations that are making progress.
