How data is the starting block for the journey to racial equity 

Some 55% of UK businesses report increased or sustained pressure over the past two years to improve R&E diversity, equity and inclusion (DEI) outcomes. Importantly, R&E data is being collected by 72% of participating organisations, up from 40% just a year ago.

As Lucy Brown, Senior DEI Consultant at Mercer, stresses, data is critical: “It’s key for an evidence-based approach to achieving racial equity – you can’t measure progress without it."

However, although almost three quarters of UK companies collect data on R&E, they face many challenges in doing so. In particular, more than a third believe employees don’t actually wish to share their data.

“I think this is about communication: employers need to  build trust with staff by explaining what the data is going to be used for and what they hope to achieve,” Lucy adds. 

There are further data-related problems to address. While most organisations are collecting employee data, less than a quarter are publishing it and thereby effectively holding themselves to account for improvements in DEI. 

Few are also making full use of data to look at their employee value proposition through an R&E lens. 

For example, Mercer has highlighted the differences in physical and mental health risks, access to healthcare and healthcare experiences for different ethnic groups. 

There’s also an enduring gap between what companies promise in terms of DEI and what they actually do about it. The latest UK Global Talent Trends report found that fully 98% of employers planned initiatives to improve DEI last year, but only 28% have a published multi-year strategy to use as a road map across every aspect of DEI.

The release of the UK 2021 census results in December 2022 also provides a more recent benchmark to compare workforce representation against. The UK population continues to increase in diversity (82% white in 2021 versus 86% white in 2011), and so it is important that UK companies mirror the communities they serve.

What can companies do to address these challenges? The way forward involves embedding DEI into the DNA of the whole employee value proposition.

That means ensuring every employee has equality of opportunity, pay and experience. 

For example, in terms of career equity, it’s helpful to understand where there could be bottlenecks in your organisation, in terms of hiring, retention or promotion. 

An Internal Labour Market map^® can provide a snapshot of your workforce, showing hiring, promotion and exit flows by different ethnic groups. These maps throw up questions to be addressed about the organisation’s processes and policies, and can also be used to project representation over time if adjustments to these processes were made. 

Similar granular analysis can be carried out in regard to R&E pay equity, to identify the differences in pay between R&ED groups not explained by other factors such as differing roles or experience. 

In truth, says Ava Lau, Head of Reward Analytics and Optimisation at London Stock Exchange Group (LSEG), a business’s R&E equality journey may start from a very low point. “Historically LSEG didn’t have sufficient R&E data to even know whether any inequity existed,” she observes.

However, as workplace DEI issues gained profile, the company embarked on its journey through an ongoing process of data collection. 

“Having data has enabled us to identify problems within the HR sphere, from representation in hiring to compensation and performance distribution,” adds Ava. “Basically, we’ve seen the truth of the adage that ‘what gets measured gets done’.” 

Initiatives to improve R&E DEI at LSEG include a target of 25% of R&ED employees in senior leadership by the end of 2025; targets are published in the annual reports to drive accountability.  

In addition, networks have been established for different R&ED employee groups to improve dialogue and build employee perspectives into process reviews, target-setting and other strategic decisions. And LSEG is working with Mercer to identify and work on DEI-based pay gaps using a sophisticated multi-factor approach. 

Clearly, organisations are recognising the need to address racial and ethnic inequity – but data collection and analysis should be at the heart of every journey.