Targets vs Quotas A Summary of Key Issues
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An honest and open discussion took place and it was acknowledged that the UK approach is quite different to Europe. The Equality Act 2010 allows positive action, but not positive discrimination and it seems that many UK companies set targets which are relevant to their organisation.
There is no standard approach and some focus on gender in senior leadership roles, while others focus on the recruitment of employees from lower socioeconomic backgrounds. Others also look to improve their mix of people from different ethnic groups, and a few are beginning to focus on hiring more disabled people throughout their organisation.
This was contrasted with the European approach which does allow for quotas, particularly regarding gender and disability. It was noted that most of the laws in Europe require listed companies (as opposed to private companies or public organisations) to have quotas.
A discussion took place about France where companies with 21 or more employees must employ 6% disabled employees. If they fail to comply with the quota the companies face fines. Similarly in Germany companies with at least 20 employees must have 5% disabled people within their organisation. Sanctions include paying compensation to disabled individuals if they are not hired.
Another topic of discussion was the advantages and disadvantages of targets and quotas. In particular if quotas were effective, why had there not been more change in Europe?
It was agreed that stakeholders were key to forcing meaningful change in organisations, whether those stakeholders be shareholders, customers, suppliers or employees. When diversity and inclusion is seen as a business issue, this galvanises organisations to change. It was suggested that stakeholder lobbying was arguably more effective than change driven by laws or regulators.
Although quotas can in theory lead to fast social change, over time compliance can become bureaucratic, and a tick box exercise. Whilst legal compliance may take place, it does not seem to always lead to genuine change throughout the organisation.
Disability quotas
The expectations set by governments are low compared to the number of disabled people in the working population. We held a discussion about the continued failure to make adjustments and provide equipment and technology to remove disabling barriers in the workplace.
Delegates agreed that the only way to ensure meaningful change in an organisation is to focus on its culture. Having targets and complying with quotas could only be one aspect of a company's strategy, so a company should consider alternatives to targets and quotas.
Ideas included creating a vision and strategy relevant to the organisation, capturing hard and soft data through regular surveys and culture audits, supporting leaders and managers to make meaningful change and using purchasing power to effect change in the organisations supply chain and third party business relationships.
Although quotas are a blunt instrument, some attendees felt it was the best way of forcing boards to make change. If not compelled to act by legal quotas, such organisations often did not comply with targets or alternative ways of creating diverse and inclusive organisations.
It was noted that data capture provided businesses with legitimate privacy concerns regarding the processing of personal data. However, where organisations had considered the purpose for collecting the data and acted in accordance with data protection principles and laws then any concerns could be overcome.
It was also agreed that issues such as intersectionality and self-identification had to be considered carefully when setting targets.
Finally, the session concluded with some debate about whether organisations should focus on certain groups rather than others, such as women, bearing in mind they are the largest underrepresented group.
Some felt that this was not the correct approach, and that people from different ethnic backgrounds or disabled people or those from lower socioeconomic backgrounds should not have to wait until one under represented group is succeeding before there is focus on them.
The workshop concluded with each organisation agreeing that there is no one size fits all, and the goals different organisations set will need to be meaningful for that business. However, it was useful to share examples of different targets companies have set for themselves in the UK, as well as how they are complying with quotas in other jurisdictions.
If you would like further information on the topics raised in this note please contact Ranjit Dhindsa or John Daughtrey.
