Lord Shinkwin has introduced a Private Member’s Bill to help breathe life into the Prime Minister’s commitment to levelling up opportunities for people to realise their full potential at work.
With backing from fellow peers and charity leaders – including DFN Foundation and LGBT Great – the Bill would build upon the success of mandatory gender pay gap reforms and extend them to other protected characteristics, including disability, race and sexual orientation.
It would also enable the new One Nation Conservative Government to promote equality of opportunity in a pro-business way as part of its levelling up agenda.
As the Government has only recently made clear, mandatory pay gap reporting works. Baroness Williams of Trafford has says: “Reporting provides an unprecedented level of transparency while driving board-level discussions and pushing employers to take real action to close the gap.”
Equality of opportunity – to realise your potential and, on merit, go as far as your talents take you – is widely recognised as fundamental to a successful enterprise economy and a cornerstone value of modern society,
Yet in the 10th anniversary year of the Equality Act 2010, negative attitudes and preconceptions about people with ‘protected characteristics’ in the workplace remain all too common. Far from levelling up, this has resulted in significant pay and employment gaps, with some individuals with protected characteristics being excluded from recruitment, career progression and merited success.
For example, Stonewall found that, in the last year, 35% have hidden or disguised that they are LGBT at work because they were afraid of discrimination; and 18% said they were discriminated against while trying to get a job.
Matthew Cameron, Managing Director of LGBT Great, said: “I welcome the Workforce Information Bill as the collection, review and measurement of diversity data is essential to addressing representation inequalities in the workplace.
“This quantifiable information will help shine a spotlight on the good while highlighting the areas which need improvement to ensure that the UK workforce becomes more balanced across all intersections of society.
Research now makes it clear that failing to invest in diverse talent at all levels of an organisation penalises business growth and profits. Evidence indicates that companies that are worst on both gender and ethnic diversity are more likely to fall behind their industry peers on profitability by 29%.
Diversity is therefore not something to be done at a cost to the bottom line but is something that adds value to it. Moreover, Credit Suisse ESG has established that firms more open to LGBT talent have on average 3% higher performance.
Lord Shinkwin pointed to some encouraging action being taken by big business to harness these benefits but insisted more needed to be done to incentivise and help those corporates who take action on levelling up.
“Only greater transparency and consistency in workforce data reporting will create the level playing field big businesses need and deserve to make sustainable progress and reap the benefits for the long term. That is exactly what the Workforce Information Bill will help deliver,” he said.
Fleur Bothwick OBE, Director of Diversity & Inclusive Leadership for EMEIA at EY, said: “To create a level playing field for all, you need to start with the foundations. That includes accessing meaningful data that can be used to drive actions and accelerate progress.”
The power of reporting
In recognition of the pressing inequality of opportunity for women in the workplace, in 2017 the last Government introduced mandatory reporting on the gender pay gap for firms with over 250 employees. The purpose was clearly stated: to ‘create opportunities’ for both women and business while at the same time boosting the Treasury’s coffers with an extra £150 billion by 2025.
The situation was a win-win-win for women, business, and the economy. The benefits are already being felt in the UK, but evidence gathered in Denmark, where mandatory gender pay gap reporting was introduced over a decade ago, shows a closing of the gender pay gap; more equal representation of women in senior positions and a lowering of companies’ overall wage bills.
Andy Street CBE, Mayor of the West Midlands and former Managing Director of John Lewis Partnerships, recognises the power of reporting as a prerequisite for change. He said: “I’m hugely supportive of this agenda. The success of gender reporting is that employees and stakeholders can hold workplaces to account and monitor progress. Introducing mandatory reporting particularly for race, sexuality and disability will also lead to changes in attitude at Board level towards leadership diversity.”
Insisting that competition between business is the key to sustainable progress, Lord Shinkwin said “if companies compete for the top talent available, then their own record on how committed they are to developing a diverse workforce – in practice as well as theory – will actually give them a competitive advantage.
“That is exactly what is already happening: LGBT Great have found that 80% of all millennials – the future of the workforce that businesses must compete to attract – actively seek out employers that visibly value diversity and inclusion. The provisions in my Bill will empower individuals with the knowledge to make informed choices about their careers and long-term success.
“It will also allow big business to select their procurement options from companies which may also choose to report on their pay gaps, creating a sustainable supply line as well.”
Describing his Bill as crucial to making the new One Nation Conservative Government’s levelling up vision a reality, Lord Shinkwin said: “I’m tremendously excited about the Prime Minister’s commitment to levelling up and unleashing people’s potential. He’s absolutely right that while talent is evenly distributed, opportunity is not. That has to change, and I’m really encouraged by the big business appetite to drive that change.
“It’s clear that there is a growing consensus in big business not only about the value of diversity and being open to recruiting and developing the best talent
“As a One Nation Conservative, I don’t believe in regulation for regulation’s sake, but I do believe in equality of opportunity for all: an equal chance to make the most of the talents you have. Incredibly, in 2020, some people are still denied that chance because of a protected characteristic. I have seen this first-hand as a disabled person, but I am also acutely aware that others with different protected characteristics, including members of the BAME and LGBT communities, also continue to be denied equality of opportunity to realise their potential and excel.”
The Bill is not only aimed at helping big business – and their major suppliers – maximise growth and profits but also at benefitting the wider economy: the exclusion of women and people from the BAME, LGBT and disabled communities costs the UK economy billions each year. For example, it is calculated that barriers to BAME talent maximising their potential alone cost the Treasury £24 billion per year. By creating a consistent framework for data reporting that enables firms to compete through like-for-like comparisons, the Bill uses the market to promote transparency and equality as a source of commercial success.
David Forbes-Nixon, CEO of Alcentra and Chairman of the DFN Charitable Foundation and DFN Project SEARCH, said: “We are strong and avid advocates of Lord Shinkwin’s Workforce Information Bill and believe its introduction would contribute to harnessing talent within an untapped market of unfulfilled potential, while creating a level playing field for all employees in the big business workforce and, just as importantly, for big business employers as well. We believe that opening up a world of opportunity to those with disabilities, BAME, LGBT, and women, will undoubtedly contribute to improving all-round company performance.
“Out of all the nine protected characteristics, disability is last on the list and often lowest on the order of priorities for boards throughout the country – this is worrying in today’s society, we need the balance to be redressed and the huge benefits of a diverse workforce recognised and celebrated. We believe now is the time for a radical, new, enabling vision that will seize the agenda and drive tangible and sustainable change that will bring fair employment outcomes for young people with learning difficulties, disabilities and autism.
“The stark reality is out of every 100 young people with autism or a learning disability, only six have a permanent career job. Despite current legislation setting the pace for creating much-required increase in opportunities for people with learning disabilities and autism, these statistics highlight that so much more work is needed if we are to bridge the employment gap and bring equality of opportunity for all.”
Donna Miller, European HR director for Enterprise Holdings, said: “A diverse workforce that mirrors the diversity of the communities we serve is a competitive advantage…We
Lord Shinkwin concluded: “Consistent and transparent data reporting across the piece is crucial to ending outdated and counter-productive discrimination. By creating a level playing field and harnessing the energies of enterprise, we can level up
“But we cannot address indefensible inequalities of opportunity without knowing what the baseline is. Knowing where we currently stand is a prerequisite to making sustainable progress. In making workforce data reporting mandatory for businesses with 250 employees or more, my Bill would enable us to do just that.”
The Workforce Information Bill will now proceed to its Second Reading following yesterday’s First Reading.