In today’s business landscape, it’s positive to see companies recognising the benefits having a diverse workforce can bring. From employee engagement, attracting and retaining talent, inspiring innovation, building trust, and shaping and protecting corporate reputation, businesses can no longer ignore the role that diversity, equity and inclusion (DE&I) can play in driving commercial success.
In our latest report, A Fairer Future: Equity and Inclusion in Professional Services, we surveyed 570 respondents across the UK and the US to delve deeper into their DE&I policies. It revealed that while nearly three-quarters (75%) had formal DE&I policies in place, nearly a third (32%) could not provide evidence that their DE&I efforts were working for their employees.
As we start 2023, companies should take a fresh look at how they are measuring the effectiveness of their DE&I initiatives to make sure that a real difference is being made – rather than simply ticking a box.
The value in evaluating your DE&I progress
Our report highlights an emerging gap where the leadership team is setting the DE&I agenda but not following up with efforts to understand the impact on employees’ working lives.
It’s true that DE&I can be more challenging to measure when you compare it to other key performance indicators typical in a business. This is because, similar to corporate sustainability, it is an area still finding its feet in terms of effective and consistent reporting. There is currently no standardised framework for the professional services industry when it comes to tracking DE&I and measuring outcomes.
This should not deter companies from evaluating their individual or sector-level progress. Similar to how KPIs are set out in other areas of the business, leaders need to aim for clearly defined goals and make a regular, consistent effort to check that they are on track to achieve them. This could include objectives when it comes to recruitment, promotions, pay gaps and employee satisfaction surveys.
If these goals are not in place, there is the danger of being perceived as guilty of ‘performative policies,’ where firms can point to having DE&I policies in place and reap the rewards of being perceived as inclusive but not back this up with concrete action that truly works. Performative inclusion only serves to alienate dissatisfied employees even more.
Especially in today’s climate, where employers are facing crises of recruitment and retention, businesses need to thoughtfully and genuinely address DE&I issues and be able to show the numbers to back them up.
Legal firms are leading by example
Across the board, our results show that the legal sector is leading the way regarding DE&I in the professional services sector. Legal firms have run DE&I initiatives over the past six months at a higher rate (86%) than accountancy firms (73%) and consultancies (59%), and most importantly, they are measuring the success of these initiatives (84%).
In contrast, we can see that consultancy (57%) and architecture firms (55%) are lagging. Adding to the fact that architecture firms came in as having the least active engagement with DE&I initiatives, this area of professional services certainly has the most work to do next year.
Their reporting requirements are one driver of greater transparency and discussion in the legal sector. In the UK, for example, the Solicitors Regulation Authority (SRA) requires all regulated firms, regardless of size, to collect, report and publish data on the diversity of their workforce every two years. Other professional services sectors, however, rely on voluntary reporting that is not standardised across the industry.
Practical tools are helping to make DE&I data more transparent and accessible. This exists in the legal sector, with the data collected by the SRA being searchable via an online database that shows each law firm’s diversity data. Other professional services sectors can learn from their legal counterparts in driving self-reflexive thinking about DE&I in their spheres.
Remember that people often ‘fit’ into more than one box
When it comes to DE&I initiatives, one size does not fit all. One of the first steps for organisations to start measuring their DE&I efforts and to set benchmarks is to define what it means to stakeholders. Diversity can be defined by many demographics, including geography, race, gender, disability, sexual orientation or professional experience.
However, when speaking about cultural changes, it’s important to avoid segregating people by their perceived identities or into “special interest” groups. Although defining and measuring DE&I necessitates looking at individual groups, when looking at the whole picture of our working lives, no one person exists in a vacuum.
Intersectionality is the practice of recognising intersecting identities and examining how exclusion can be compounded along multiple lines. For example, the gender pay gap is much worse for women coming from Black backgrounds. While LGTBQ+ people are underrepresented in professional services at senior levels, lesbians are much more affected in terms of representation across all levels, from entry positions upwards.
There is an opportunity to set the bar
This year, having good intentions when it comes to DE&I initiatives is not enough. Firms must be able to prove that they are making solid progress in developing an inclusive working culture.
There is also a real opportunity for their work to have a positive knock effect on wider society. This is because the work of professional services underpins a great deal of how all businesses operate – and so, steps to redesign how law, accountancy, consulting, and architecture work and make these firms more inclusive have the opportunity to influence how other businesses outside the professional services sector, as well as wider society, operates.
By Rachael Kinsella, Editor-in-Chief at iResearch Services.