The last two years have been incredibly difficult for employees and complex to navigate for employers. Since 2020, the pandemic has painfully revealed social discrepancies and brought issues of diversity, equity and inclusion at the workplace to light, pressing business leaders to act on them. It also further amplified inequalities. For example, the World Economic Forum's 2021 Global Gender Gap Report estimates it will take 135.6 years for the gender pay gap to close on its current trajectory. That’s 36 years more than before the pandemic started.
But there has also been a silver lining to the pandemic: the democratising effect remote working had for many. Employees have been able to work from home without being penalised or overlooked. It has also empowered them to leave jobs that don’t suit their needs or match their values anymore, leading to the Great Resignation.
Although there is still a long way to go, the pandemic helped to level the playing field. We believe this theme will continue in 2022 with social inclusion driving the people agenda.
Here are our four predictions for the next 12 months
1 Social mobility will take centre stage
Social mobility will become a key focus for the inclusion, diversity and equity (IDE) agenda. So far, it has not been talked about as much but is often an important driver for inequality at the workplace.
Social mobility is the ability for individuals to apply for, secure and succeed in roles above their social strata. In a fair world, jobs should be available to everyone, irrespective of class or socio-economic background. Organisations will put more emphasis on attracting applicants from different backgrounds and ensuring a fair selection process.
The lack of social mobility continues to be an issue. The numbers speak for themselves – 60 percent of those in professional and managerial jobs come from a white professional background. Only 34 percent come from an ethnic minority and low socio economic background. Organisations, such as the Social Mobility Fund, are raising awareness and enabling change on this issue.
2 IDE will be hardwired into business strategies
As the ESG agenda evolves, customers and stakeholders will put more pressure on companies to hardwire IDE in every business decision. Also, as the dominant demographic in the workforce, Generation Z and Millennials pay more attention to companies’ IDE strategies. A growing number of businesses are already voluntarily disclosing their IDE metrics ensuring that the workplace has equitable opportunities for all types of employees. They are also looking at maintaining supplier diversity and launching inclusive marketing campaigns as well as adopting technology that encourages equitable work opportunities.
Organisations are increasingly being evaluated on how well they perform against criteria beyond financial performance – measures that represent different dimensions of stakeholder capitalism. Companies need to stop seeing IDE as just another target that needs to be hit. It needs to become part of the company’s culture and purpose, which is a continuous process.
3 Expect growing pressure from the regulators
The financial services regulators (Bank of England, Financial Conduct Authority and Prudential Regulation Authority) will continue the journey to accelerate the pace of meaningful change on diversity and inclusion. The demand is that regulated firms and listed companies foster cultures that are inclusive so that staff can share their diverse experiences and backgrounds; and companies have more diverse representation at all levels.
A discussion paper issued by the regulators in mid-2021 set out several concrete proposals that would require firms to address diversity and inclusion in their policies, governance arrangements, accountability, remuneration arrangements and disclosure and would also form part of the UK regulators' approach to supervision.
The consultation will kick off in Q1 2022 and a policy statement is expected in Q3 2022. With ESG gaining traction worldwide, we believe this could be a trendsetter globally. As the FCA says: "Diversity and inclusion is a key component of ESG – both in its own right, and as an enabler of creative solutions to other environmental and social challenges."
4 Ethnicity pay gap reporting on the rise
Currently, there is no legal obligation for companies to publish their ethnicity pay gap (EPG), unlike the requirement to disclose gender pay gap (for companies with over 250 employees). Many organisations, however, voluntarily chose to publish their EPG in the past year. We believe this trend will increase in 2022 and beyond.
Organisations see this as an opportunity to understand racial inequality at their workplace. Most importantly, they can use this information to drive action to improve their IDE strategy and reduce disparities.
Although it’s unlikely that EPG reporting will be legislated in 2022, employers need to have a better understanding of collecting and analysing employee data. They often face a variety of challenges in the data collection process, from a low response rate to legal questions and inadequate HR systems and processes.
Things we hope will fade out in 2022
- Use of the catch-all acronym BAME: Clustering individual groups, cultures, and backgrounds under one acronym because it’s just ‘easier’, is the opposite of inclusion. With major broadcasters committing at the end of 2021 to avoid using the term, we hope it will no longer be in our vocabulary.
- IDE cannot be ‘fixed’ with marketing campaigns and events. It can only progress by introducing tangible change alongside accurate metrics.
- Treating IDE as a business issue that requires a one-time goal after which you are going to feel good about your targets.
An equitable environment
Make sure you are on the right side of the future of work by making your company an equitable one without disparities in opportunities for advancement, experiences, access to key roles, development and rewards. Your people are your biggest advantage and the future for your business success. To make 2022 your year, make it the year of inclusion.
Stay tuned – we will review the IDE predictions at the end of this year. We would love to hear your thoughts on fostering equality and inclusion at work. Send us an email.