How to ACT Guidance Pillar 3: Action
01. Investing and valuing people
Culture is the foundation on which firms stand and the right people are an essential ingredient. Therefore, the way the firm invests in and values people is central to success of the business and a good culture. Increasingly, stakeholders want more visibility on how this is enacted. Firms should anticipate potential and existing employees, clients and other stakeholders having questions about their approach and how they ensure that policies are equitably applied and doing the intended job.
02. Action
The set of internal policies covering all areas of employee activity and well-being, including recruitment, training, working practice, leave and safeguarding.
03. Question set
Does the Firm:
a. have a pay equity policy?b. intend to develop a pay equity policy?
Select if the Firm include provisions relating to DEI within policies for: Hiring practices; Retention, training and development; Flexible or agile working; Parental, careers leave or sabbaticals; Workplace safety and freedom from harassment; Supplier diversity; (Standalone) DEI?
What training does the Firm provide to managers on DEI in hiring, employment, retention and promotion practices?
What practices does the Firm take during recruitment to ensure an equitable process including the advertising, shortlisting, interviews, and working with external recruiters?
Does the Firm have a company-wide external hiring goal(s) for under- represented groups or related to diversity targets, including e.g. gender, disability, neurodiversity, age, ethnicity, socio-economic?
Does the Firm have a process to ensure promotions are equitably handled?
Does the Firm offer benefits that promote employees’ general wellbeing and flexible work-life balance?
04. What we expect to see
It is helpful to ask questions to establish that a firm recognises the different roles that policies may play:
to set out the expectations that
the business and employees have of each other
to be enabling and equitable; and well-designed to deliver good outcomes for both the business and employee
Over time, the company should be able to demonstrate that is has:
i) Established coherent policies and guidance. The firm should be able to point to a developed or developing set of policies that is easily accessible for employees, and ideally offered to prospective staff;
ii) A process to monitor implementation, uptake and review. The firm should also demonstrate that it is able to review key processes from start to completion, in order to understand where there are gaps, or where bias can creep in. The firm should aim to describe how they have made efforts to remove biased practice from their process, as well as how the process has been made to be inclusive. This can include goals and support for hiring people with protected characteristics that would otherwise face barriers to entry to the workplace.
iii) access to any relevant training, especially for managers. To support effective policy implementation, it is important that managers are receiving effective training. This will ensure policies are available and equitably applied, and they are able to recognise the different needs of different people. While this appears most critical in relation to progression, the ingredients of success come from having consistent and equitable access to development, opportunities for senior management time and exposure, and uncritical access to accommodations in ways of working. And;
iv) Space for employee feedback. The firm should describe a process for updating the policies to ensure they are reflective of current good practice, which includes the ability for staff to input into policy evolution.
Good practice means that the company has taken steps to consider staff needs, that there is work being undertaken to provide it and to monitor their wellbeing. It means also reviewing existing norms to make sure that each employee is doing the job they were intended to, or is being compensated and recognised for additional work.
05. How to get there
Firms increasingly will have standalone policies covering the overall approach to diversity, equity and inclusion. These will set out expectations of behaviour from both the firm and the individual. There are additional scenarios that might apply, depending on the organisation’s size or complexity.
The firm needs to address specific aspects of DEI that relate to different areas of business or work in other HR, operational or business policies.
The firm prefers to address DEI specifically in other policies in lieu of an overarching document.
The DEI policy is the highest-level document with specific coverage of different business areas that is then referenced in other policy documents.
Space and possibility for each policy to be inclusive, and to support inclusive practice. Senior management should participate in this process, which may require some training as a precursor.
Measures contained within policies should be designed to make the workplace accessible and equitable for all staff, with periodic reviews of all policies for accessibility.
This includes physical and virtual access to practical elements such as interviews, meetings and collaboration, as well as to decision making. This can be achieved by both policy and good practice, for example through meeting etiquette that ensures everyone gets a similar experience during a virtual or in-person meeting, that it takes place at an accessible time, as well as ensuring people remain visible and in the communication loop if they are not in situ.
Further, there should be no discrimination in the delivery of a policy objective, although its development may be derived from the needs of a particular group. For example, flexible working rules may support particular categories of employees that have responsibilities outside of the workplace, but they should apply to any colleague (that has an eligible job function).
Whether in the standalone DEI policy or in other references, the firm should be clear on its core values in relation to DEI, and should set out to employees what they can expect from the firm, as well as behavioural expectations on their side, and also what happens if the policy is breached.
06. Pay equity
A pay equity policy is a commitment to provide and maintain equal pay within a firm. In the UK, this principle may be protected in the Equality Act 2021, but in practice there may be elements of inequity that arise. This can be due to differently labelled work of equal value being compensated differently, to discretionary bonuses being unequally applied, or differences in how staff access opportunities for pay reviews and progression.
Firms can move towards a policy by initiating a pay equity audit (that can be conducted via a third-party provider), which will benchmark roles against industry norms and compare employees that are doing like-for-like work. This can be across all roles or a limited selection to offer insight into what issues might exist. In order to effectively audit, the firm will need to collect or enable collection of some sensitive employee data. Some of this will be standard information held by HR; other areas may be difficult to access. Therefore, as noted, the firm will need to have considered the narrative of its approach to employees so they understand why data is being sought, as well as what it will and will not be used for. Having the option ‘Prefer not to say’ is helpful, and will be a marker of any change in sentiment as the narrative becomes more accepted.
Even with strong policies the most challenging aspect to successful roll out is to achieve systematic and even implementation across the business. Actions need to be reviewed over time as even where practices are clearly mandated or recommended, personal short-cuts, ad-hoc adjustments or misunderstandings can skew application. Uneven application of policies leads to resentment and disengagement.
It will always be helpful to look specifically at managerial training, not just on issues related to diversity and inclusion, but more generally on effectiveness as a manager to support the different characteristics of the people in the team. Supporting the core management body to understand inclusive practices will enable individuals and teams to communicate better, to work together more effectively and to feel more engaged in the organisation.
“Companies cannot assume that managers automatically understand DEI policies and how to implement them.”
People often find that they have become a manager as part of an increase in seniority, but management does not come naturally to everyone, and needs honing and encouragement. Companies cannot assume that managers automatically understand DEI policies and how to implement them. However, there is certainly a significant overlap between good management practice and inclusive management practice.
Any new elements to or newly created policies should have training, be it a webinar or workshop, as standard. It should include ways to help managers identify and support positive behaviours in the workplace, as a driver of cultural enhancement and inclusion.
Reinforcing positive behaviour and calling out any indiscretions can have an amplifying effect on behaviour change. One commonly recognised, but rarely effectively addressed issue, is process that has unconscious or sometimes conscious bias within.
Firms should look to provide evidence of how processes are designed and monitored to reduce incidence of predetermination and bias, such as the wording of job adverts that creates barriers to access through lack of specific information or unnecessary qualifications, the channels for recruitment that target only well-worn paths and the methods of application.
Bias means that a person moves away from objective reasoning and relies only on belief. In some areas of decision making, this allows rapid actions that use acquired knowledge that makes fair assumptions.
However in many areas of business, this decision making means a person will automatically rule out options that fall outside their normal experience, due to feelings of uncertainty or because their world view or way of thinking is being challenged. This manifests as lost opportunities and translates to a shortfall in delivery for the clients and the business.
In recruitment and team building this can mean:
A failure to shortlist candidates that don’t meet a set of familiar criteria or reflect a world view.
Neglecting to ask questions that would allow candidates to demonstrate how they meet criteria.
Opting for someone that looks, sounds or thinks in a familiar way
Feeling reassured because the team has always functioned well in a familiar way
Failing to don’t think about how a team might work more effectively or creatively
The team may function but over time is at risk of falling short of its performance potential.
08. Recruitment process
It is important for firms to recognise that recruitment is a series of processes that start well before a candidate is shortlisted. The first element is the firm’s public image. While some firms may be quietly conservative in how they market themselves to candidates, they should recognise that this may prevent more diverse candidates from finding them. Candidates will respond differently to channels that seek them out, and go beyond the mainstream approaches to reflect particular skill sets, background or expertise.
This includes:
Online and websites: The public face of the organisation is an easy way to put off candidates, if thought has not been put into who is represented and how. Diversity measures and language should not be restricted to the recruitment pages, but evident across the business. Online materials should be designed to be accessible to those with visual or sensory impairment.
Recruitment channels and partners: Recruiters can often lean on the same pool of candidates or have an unchanged list of expectations from candidates that leads to the same list being presented to firms. The firm should challenge recruiters by asking what channels they use and by setting expectations for the diversity of candidates they expect to shortlist.
Job adverts and descriptions: Hiring managers should consider each of the requirements for a role. Often job adverts are a revision of an existing description, and have legacy requirements that are not actually role essentials, which can directly reduce the candidate pool – such as requiring a degree for an entry-level role that will be fully trained, or indirectly, for example by vaguely referencing travel needs without enough information for a candidate to plan.
Screening tools: There have been significant developments in recruiting that have included the increasingly widespread use of AI and online screening tools, which are intended to remove bias from application processes. This intention is a welcome one. However, the tools are not infallible, and should be backed up with a clear and objective internal process that allows candidates to demonstrate where they have comparable skills and experience.
Firms should also consider making the hiring panel mixed and well-briefed on objective techniques (and what is not permitted), as well as the way interviews are scheduled and their frequency. This includes aspects such as making interview questions available ahead of time or preparing the panel with understanding that some people respond differently to social cues if they are neurodivergent. While a skills test can be a highly effective way to shortlist candidates, firms should only ask for work they have time to review, and which is appropriate to the role and indeed the level of expertise sought. All teams will ultimately be looking for a candidate that will integrate into a team. This doesn’t mean the candidate has to fit the team-shaped role that has appeared – rather, the teams have to consider how they will change to fit the opportunity presented by each candidate.
Making offers: When an offer is made to a candidate, it is an opportunity for the firm to be upfront with its policies and process. Instead of making the candidate ask, the firm can provide access to data on pay, progression and policies, as well as on culture. This will help the candidate make an informed decision.
In the US, for example, several states have already updated recruitment practices to protect candidates. One example is preventing an employer from asking for salary history from a candidate, as this can reinforce and amplify salary gaps for candidates that are more likely to have been subject to discriminatory practice, or who faced unconscious bias that has resulted in a lower salary or slower progression.
“Recruitment starts well before a candidate is shortlisted - the first element is the firm’s public image.”
09. Hiring and progression
Once the firm has reviewed employee diversity across the business and noted areas where progress could be made, it needs to identify priorities and goals to create change. This will vary according to the specific needs of the business, but firms can look out for disparities, not just in seniority, but in role types (eg, back office vs client-facing, or roles with discretionary income). Failure to address gaps in hiring will of course manifest in a smaller talent pool to progress.
Inclusion should be a key item that shapes the hiring and progression process. This is to ensure that anyone who faces barriers to entry can benefit from a well-planned and universally designed environment, where inclusive practice is beneficial for everyone. This falls into a number of categories.
There are legal accessibility requirements, but this is the baseline of what can be undertaken. If an employee has to use a separate entrance due to their needs not being met by the main door, or has to ask to be able to access presentation content because it has not not been put into accessible formats, they are not being treated inclusively.
Research is ongoing across various industries into how workplaces can be more accessible and inclusive, with some emerging good practice from both advocacy organisations and large firms that have been able to marshal resources to redesign workspace. For example, many have office space with different zones that enable collaborative or focused working, the wholesale increase in options for video conferencing and remote attendance. This recognises that people will thrive in different environment styles, locations and even working times. Further changes to policy and practice that governs how employees interact with their workplace, be it layout, requirements for office attendance, inclusive meeting practice that covers participation and delivery (making closed captions a default, requiring in person dial in to hybrid meetings) and modes of communication can be helpful for people with varying needs due to sensory, physical or mental disabilities.
10. Progressing and promotions
An equitable process for progression includes a number of components, only one of which is the highly visible marker of a promotion. Employees need a transparent pathway that is cultivated and mapped out by their manager, as well as access to relevant training, exposure and expertise.
“Inclusion should be a key item that shapes the hiring and progression process”
There are a number of ways a firm can signal that an individual’s development has been considered. A key part of this is ongoing, specific and targeted managerial feedback related to how an employee can become more effective. There should be opportunities to grow according to skills development, either on the job or via training, and there should be opportunities to sit with more senior people and observe, as well as participate in more senior forums.
The promotions process should be transparent, with clear expectations that can be accessed by anyone performing to the required level and quality.
The business can implement objective competency frameworks, but this is also a core area of manager training. It will include potentially resetting inherited bias on, for example, who can carry out certain roles, their scope for development and management, risk-taking and thriving under pressure. Managers should also be trained on how to give feedback, so that anyone seeking input on their performance receives clear and objective information on why they do, or do not, meet certain criteria.
There are a number of ways a firm can signal that an individual’s development has been considered. A key part of this is ongoing, specific and targeted managerial feedback related to how an employee can become more effective. There should be opportunities to grow according to skills development, either on the job or via training, and there should be opportunities to sit with more senior people and observe, as well as participate in more senior forums.
Identify and avoiding pitfalls
It is fairly common for a company to fail at any one stage of this process, and also common for this not to be tracked formally in data. This can lead to outcomes such as employees being:
more likely to seek new opportunities in other firms, such as women who are looking for their first promotion, who choose to leave rather than be overlooked;
assigned non-core work that may be essential to how a team functions but where collaborative behaviour is not recognised or rewarded in the competency framework – leading to pay gaps;
overlooked despite having highly transferable skills that could be repurposed in other teams, helping to create more diverse teams with institutional knowledge and maximised co-operation; or
leaving the workforce entirely as they are unable to progress, therefore losing institutional knowledge and skills.
11. Wellbeing
Much like diversity, the understanding of employee wellbeing in the workplace has evolved significantly in recent years. The importance and benefits of ensuring that staff are able to work in comfort has led to conversations on the interior architecture of offices, work-life balance, and accomodations for menopausal symptoms. The pandemic has also helped focus conversations on mental health, which started with health benefits being offered for therapy, but developed to a much deeper conversation on needs. Mental health first-aiders are now much more visible in many workplaces.
The pandemic also caused a watershed moment with major changes to our ways of working. All firms should reflect, however, that some of the changes to practice and access were in fact accommodations that had been requested by marginalised groups that were previously excluded in different ways from the workplace. Recognising that inclusive practice can have broader benefits for everyone may help firms be more open to changes to enable inclusive practice in the future.
Some firms are attempting to roll back progress, citing cost or productivity concerns. While not every firm needs to have the exact same policies or approach, it is important to embrace the opportunity to take permanent steps towards being more accessible and flexible, with the right support and scaffolding. Good culture is important here because it means that the value of human capital has been taken into consideration, as well as the importance of a happy and engaged workforce.
12. Further resources and ideas
Business Disability Forum, 2022. Global report: Access for all - Creating inclusive global built environments
Disability Rights UK, accessed July 2022. Building for Success in Recruiting and Supporting Disabled People in the Workplace
https://www.disabilityrightsuk.org/sites/default/files/pdf/buildingforsuccess.pdf
International Labor Organization, 2016. The win-win of disability inclusion
https://www.ilo.org/infostories/en-GB/Stories/Employment/The-win-win-of-disability-inclusion
Equality and Human Rights Commission, accessed July 2022. Equal Pay Audit. Guide for Larger Organisations
https://www.equalityhumanrights.com/en/multipage-guide/equal-pay-audit-larger-organisations
Equality and Human Rights Commission, accessed July 2022. Equal Pay Audit. Guide for Smaller Organisations
https://www.equalityhumanrights.com/en/multipage-guide/equal-pay-review-smaller-organisations
Harver, 2019. 5 Proven Practices for More Inclusive Recruitment
https://harver.com/blog/inclusive-recruitment/
Further resources and ideas
Diversity Project, 2021. The role of line managers in creating an inclusive culture
https://diversityproject.com/resource/role-line-managers-creating-inclusive-culture
Deutsche Banke, accessed July 2022. Diversity and Inclusion
https://www.db.com/who-we-are/our-culture/diversity-management