Simon Neville considers the plethora of data that companies are now obliged to produce
It takes a lot for rival companies to be in agreement. But as the Home Secretary Amber Rudd recently discovered, even some things can unite the entire business community. In her case, a speech she made at the Conservative Party Conference announcing plans to force companies to list how many foreign workers they employ, was met with universal condemnation from employers.
The Confederation of British Industry, the Institute of Directors and more than 100 business leaders signed a letter in the Daily Telegraph expressing their concerns over the plans. Less than a week later the policy was dropped. But the issue around data in the workplace is unlikely to shift any time soon – as more information is stored and companies scramble to work out how best to use it.
Businesses are keener than ever to show to the world that they are good employers, with a wide base of staff from different backgrounds and at a time when employment issues – whether around zero hours contracts, the rising national living wage, or the gender pay gap – remain at the forefront of the public debate. But how useful is all this data? How are companies using it? And what are the best ways to communicate it to staff? Alex Cole, director of communications at Bupa, explains: ‘I think companies are keen to show how important their employees are and collecting some data is certainly helpful. But with every piece of data we collect, before starting we always have to ask the question Why are we doing this? And in whose interest is it? If there is no clear answer to that question, then it's probably not worth doing.’
Sorrelle Harper, director of communications at accountancy giant KPMG, agrees: ‘It should never be about box ticking. It’s about asking: what is the raison d’etre or the DNA of your business? We sell people and because we’re a people industry, it’s vital we have people of different backgrounds and ethnicities. ‘The whole trend nowadays is towards being more transparent, honest and open, but we shouldn’t be gathering data for data’s sake. We should be gathering data to improve our understanding and effect positive change.’
Some areas of data collection have already proved helpful in the workplace. Companies have been taking a more proactive role, along with organisations such as the 30% Club, which is campaigning for a minimum of 30 per cent female representation on FTSE 100 boards, to work harder at improving the gender imbalance.
Harper explained that when the new executive team for KPMG arrived, led by UK chairman Simon Collins, the firm stepped up its efforts on data. She explains: ‘Simon is a believer in having a diverse workforce, but you can’t attract more women, or more black men and make a change unless you know where the problems are. For example, when I came back to work from maternity leave, there was a problem with encouraging women to come back to work and progress into more senior roles. I therefore received coaching in how to deal with the new demands of juggling a senior role, two children and commuting into the office. A lot of employees are worried about telling their boss they must leave at 5pm to collect children from schools and training on how to communicate can help them to overcome that fear.’
The Government has also played a major role in making more data available and encouraging companies to be more transparent and nurture equality, especially around encouraging new mothers back into work. From next year companies must compile data on their own gender pay gaps, with the information going public in 2018. But for years, the data has been tricky to analyse properly, because the blunt tools of simply comparing women's pay with that of men's tends to fail to take into account the vast array of external factors.
Dr Andrew Chamberlain, chief economist of employee review website Glassdoor, explains: ‘Lots of the popular discussion around the gender pay gap has compared apples with pears. That is, it often compares very different kinds of male and female workers, all grouped together. ‘The gender pay gap is caused by complex factors: it's not just a matter of overt discrimination or mistakes in pay setting by employers. It often starts at school with subjects women choose to study versus what men choose and the demands expected of women in society, such as bearing the burden of child care and elderly care.
‘Women also still typically take the majority of parental leave, while men don’t, and tend to return to work on a part-time basis.’ Research by Glassdoor found that even when all the additional information is taken into account, men are still earning 5.5 per cent more than women. Strip out the external factors and the difference is 22.9 per cent. But beyond the gender pay gap there still remains a vast chasm for ethnic minorities to pass in order to rise through a company and even reach the top. Just three FTSE 100 chief executives are from an ethnic background. Recent research by executive search firm Audeliss found that for every 2.3 million Black, Asian and Minority Ethnic (BAME) people in the UK there is one BAME chief executive, compared to one white chief executive for every 600,000 white people.
Suki Sandhu, chief executive of Audeliss, explains: ‘Huge strides have been made to improve gender diversity in recent years but this now needs to be reflected to increase BAME representation at the top of global businesses.’ Companies are starting to make efforts to address the problem – along with Government legislation such as the 2010 Equality Act – although many admit privately there is a long way to go.
The John Lewis Partnership is one company hoping to lead the way; bosses have set a target of ten per cent of management positions to be held by BAME partners by 2020. According to the latest report from the retailer behind John Lewis and Waitrose, just 3.7 per cent of senior positions are held by those from an ethnic minority, although 14.7 per cent of its total workforce has such a background. It also recently announced Paula Nickolds as the first female managing director of the department store.
Peter Cross, director of communications for John Lewis, explains: ‘What is really important is to have an up-to-date, full understanding of the changing shape of the workforce, and that’s on all the measures – demographics, age, location, race – all of this is critical in being able to fully understand how to talk effectively to employees and colleagues. ‘The same science of how you market to customers really should be applying to how you communicate to a workforce and as an industry we aspire to an even higher level of sophistication in that field. That's certainly the case for ourselves.’
Companies are also keen to make sure they employ workers from lower socio economic backgrounds, in an attempt to diversify workplaces and give those from the poorest backgrounds opportunities previously reserved for those with good connections and typically from a privileged background.
But a problem arises: how do you discover whether someone is from a poor background? What tick-box can you include on an application form? And will candidates try and second guess the interviewer or company?
KPMG’s Harper admits this is still a major problem. She explains: ‘We’re all grappling with how do we encourage social mobility. We may have more ethnic diversity and more women, but if they’re all from privileged middle class backgrounds, we’re not getting a very good diverse group of people.
‘If you were 21 years old from a poor background applying for a graduate scheme and you saw questions around your socio economic backgrounds you might think Wait a minute. I don’t know whether they’re going to react well to it. The same could apply for an applicant from Eton, who might think he is too stereotypical and might not get the job if he reveals it. So we need to be really clear why we want the information. ‘We’re reviewing it at the moment and there is a lot of change in this area. The typical question is Did your parents go to university?, but there’s an increasing view that this is a bit old hat and therefore we’re developing more detailed questions.’
And herein appears to lie the key – what use is all this data if it cannot be put to good use? All the businesses that CorpComms Magazine approached were adamant that data should not be gathered just for the sake of it, but must be applied to improve their organisations. It creates a vibrant workplace, with ideas spanning the spectrum of society, which in turn leads to being more in tune with customers and ultimately should lead to a better company and bigger profits.
There can be pitfalls to collecting and publishing data – listed companies are now forced by law to reveal the salaries and bonuses of their board members, but this has only led to rival chief executives demanding higher wages, now that they can compare how much their contemporaries elsewhere get. Collecting data is also unlikely to generate headlines and newspaper inches because journalists are unlikely to run a story that shows a company is behaving itself. Bupa’s Cole explains: ‘We need to be realistic that we're not necessarily going to get media coverage just for publicising what kind of employees we have.’ But, should something go wrong – and it inevitably does – and a company's employment practices are called into question in the press, at least the data will be there to support its case.