This article was written by Senior Behavioural Scientist Rosie Almond and Acting Head of Insights Olivia Olivarius.
Previously available only to participating member firms, the full explore phase report – Sharing diversity data – is now available to all to download.
As part of our thematic focus on creating Diversity and Inclusion initiatives that work, FSCB Insights launched an industry-wide Sharing Diversity Data programme of work to help develop best practices for collecting accurate data about the demographic characteristics of employees in financial services firms. The first stage of this programme of work, the explore phase, has revealed a lack of quantifiable and robust evidence on what works in increasing diversity data sharing rates.
UK firms in the financial services sector have been increasingly taking steps to advance diversity and inclusion. In addition, a clear message to the industry was sent in a discussion paper issued jointly by the Prudential Regulation Authority, the Financial Conduct Authority and the Bank of England in 2021. The paper emphasised the relevance of creating, promoting and sustaining more inclusive and diverse organisational cultures and the positive effect of these on outcomes in ‘risk management, good conduct, healthy working cultures, and innovation’. They found that, ‘these outcomes directly contribute to the stability, fairness and effectiveness of firms, markets and infrastructure that together make up the financial sector’ (Bank of England et al., 2021).
To this end, many initiatives have been implemented by firms, and the industry is maturing in its approach to improving diversity and inclusion.
At the centre of this work is the need to gather accurate and timely information. Identifying issues related to diversity requires accurate data about the demographic characteristics of employees. Likewise, effective initiatives to promote greater inclusion requires that firms develop their capacity to triangulate demographic data with employee experience data. Firms are increasingly working towards understanding the intersectionality of their employees. Intersectionality is an analytical framework based on the idea that a person’s social identities or characteristics (e.g. race, gender, sexual orientation) intersect, or converge, to lead to experiences of both advantage and disadvantage, which vary by context (Crenshaw, K., 1989). However, there are many reasons that staff do not wish to share sensitive demographic information to their employers, even in an anonymous setting.
See our recent article, ‘Why an understanding of intersectionality is fundamental to improving DEI initiatives‘
Additionally, we do not know and cannot assume the distribution of characteristics of those who choose not to share their demographic data and thus the data that is collected may not be representative. It is possible that of the group who do not share their demographic data, there is a higher proportion of those with a more often discriminated against characteristic. This compounds the problem of low sharing rates, as the remaining data could be more heavily weighted towards majority groups. On the other hand, those not sharing their data might not do so because they feel they represent the majority and are not from a ‘diverse’ background. Some people may not feel the question applies to them and may believe that sharing their data is not much benefit to them personally or to the firm.
The ‘explore’ phase of our programme of work deployed multiple research methodologies to investigate good practice, barriers and challenges firms face when collecting employee diversity data, including:
- conducting an evidence review to understand the drivers behind non-disclosure of diversity data as they relate to different demographic characteristics
- analysis through a behavioural lens of initiatives used in industry case studies to increase diversity data sharing
- qualitative interviews with experts in Human Resources and Diversity Equity/Equality and Inclusion (DEI) from participating firms
- benchmarking analysis on diversity data sharing rates and interventions tried across the industry.
What we found
We interviewed 13 industry professionals from 11 firms who were responsible for diversity data collection. We found that there was broad agreement in the importance of DEI and measurement, but considerable variation in the maturity of firms’ DEI journeys. We also identified a range of perceived barriers to diversity data sharing across firms – for example, clunky IT systems and time pressure. Firms also spoke about a range of initiatives to encourage data sharing.
Reviewing the evidence and talking with HR and DEI professionals, there is plenty of advice on increasing diversity data sharing. When running campaigns to collect demographic data, many companies have turned to making statements about anonymity and security of data, or about how their employees’ data will be used to help increase inclusion in the future. But are these statements included because they are effective, or because they are quick and simple to do? When multiple changes in messaging are introduced at once, we can’t say for sure which part is driving the effect we want to see. This means that a company with limited resources may not choose the most effective message to increase data sharing. It is important to know what works, and why.
The next step for this work would therefore be a ‘phase two’ of the programme – trialling behavioural interventions within firms to generate high quality evidence on what works in improving diversity data sharing rates.
Bank of England, FCA, & PRA (2021), DP21/2: Diversity and inclusion in the financial sector – working together to drive change.
Crenshaw, K. (1989). Demarginalizing the intersection of race and sex: A black feminist critique of antidiscrimination doctrine, feminist theory and antiracist politics. u. Chi. Legal f., 139.