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Half of Irish organisations favour regulation to drive D&I

Apr 26, 2018

New research conducted by EY among more than 150 senior leaders across a range of indigenous, multinational and public sector organisations shows that the gender composition of both boards and senior management in Ireland has not notably changed in the last year with 26% women on boards, and 32% representation in senior management. Of those surveyed, almost half (49%) favour regulation as a driver for creating more diverse and inclusive organisations. Interestingly, in light of the lack of progress on gender diversity of boards, 91% of this group said they favour regulation to address the gender pay gap and 79% said they favour regulation to address gender diversity of boards.

Olivia McEvoy, Director of Diversity & Inclusion Advisory Service at EY Ireland, said: “With gender pay gap legislation on the government agenda, it’s encouraging to see that many Irish businesses are supportive of the move. Organisations that begin preparing now and prioritising Diversity & Inclusion as a strategic imperative will reap benefits in the months and years to come. Diversity at board level is an issue, and it’s not improving. It is clear from the findings that organisations in Ireland emphatically acknowledge diversity and inclusion as a business imperative. However, actual progress and work practices do not entirely reflect that view. This seems in part due to a failure to make the connection between diversity and inclusion and the bottom line.”

The report shows that investment in diversity and inclusion is increasing, with significant changes versus last year. However, investment appears to be lacking in strategy, data analytics and diagnostic assessment:

  • The proportion of organisations investing €1,000 per year or less in diversity and inclusion has decreased from 36% in 2017 to 20% this year;
  • The proportion of businesses investing €50,000 per year has also increased from 9% in 2017 to 15% in 2018;
  • Investment tends to be focused on events (77%) and sponsorship (42%); and
  • Less than a fifth (19%) are investing in strategy development, a similar proportion (19%) in strategy implementation, and less than a third (31%) in data collection and analysis, while 16.7% are investing in diagnostics and benchmarking.
“While it’s encouraging to see that investment in diversity and inclusion is increasing, investing in events and sponsorships alone will simply not drive business performance. An effective diversity and inclusion programme requires governance and executive sponsorship as well as an informed leadership who are held accountable for that success. It is essential to have an evidence base for diversity and inclusion, setting specific goals and targets and measuring success and progress, achieved through diagnostics and data analytics. Without knowledge of who is working in the organisation, it’s nigh on impossible to address issues that drive diversity and create an environment that fosters respect and celebration of difference. While the business impact of diversity and inclusion is widely acknowledged, it’s time for Irish businesses to change gear and put words into action,” McEvoy continued.

Aside from the areas of gender and nationality, the report suggests that Irish businesses are largely in the dark when it comes to the composition of their organisations more broadly, which is unsurprising in light of limited investment. Just a quarter (26%) collect employee data on (dis)ability; 16% on race; 15% on religion and belief, and 15% on sexual orientation;
 
Organisations that are investing in diversity and inclusion report noteworthy impacts:
 
  • Organisations that have invested in a diversity and inclusion diagnostic assessment are three times more likely to attribute higher sales revenue and profit margins to diversity and inclusion than those who haven’t carried out a diagnostic assessment (57% vs. 18%);
  • 84% of those investing €25,000 or more say that their organisation is diverse and inclusive enough to attract and engage millennials and young talent, versus 65% of those investing less than €25,000; and
  • Furthermore, 59% of organisations investing in diversity and inclusion report strengthened cultural values.
“The correlation between investment in diversity and inclusion and business impacts is undeniable. Without investment in attracting diverse talent, across age, gender, ability and background, little is likely to change and issues that prevail today will remain in years to come. An organisation’s culture is one of the most difficult things to change. With younger employees, particularly millennials, increasingly looking to workplaces that stand for more than profit, the potential impact of diversity and inclusion in this regard is remarkable. Diversity and inclusion should form a cornerstone of any talent strategy, which is crucial in today’s business environment where talent shortages are really beginning to bite. Businesses can’t afford to rest on their laurels by overlooking an asset as crucial as talent,” McEvoy concluded.
 
Source: EY Ireland.