How effective are diversity & inclusion initiatives in retail?

Despite diversity and Inclusion measures becoming more and more common in businesses, UK retail is lagging behind according to research. Retail Gazette investigates whether these D&I initiatives are effective for the sector.

Experts discuss how effective diversity & inclusion initiatives are within the retail sector and what more can be done to improve measures.
"Businesses are missing out on incredible benefits, despite senior talent pools being full of excellent, diverse candidates." - Suki Sandhu

Diversity and inclusion has been high on the agenda for many retailers in recent years – particularly in the wake of the resurgence of the Black Lives Matter movement last year.

According to research carried out by MBS Group and the BRC earlier this year, 89 per cent of businesses in the sector have a D&I strategy in place or are in the process of establishing one. In addition, more than 50 of the UK’s leading retailers have signed pledges that included appointing D&I executives, supporting career opportunities for all, and creating respectful and inclusive work environments.

However, the BRC and MBS Group’s research found that 15 per cent of retailers had no women on their executive committees while 69 per cent of retailers had an all-male chief executive, chief financial officer and chair. Meanwhile, just 9.6 per cent of retail chief executives, 11.4 per cent of chief financial officers and 4.3 per cent of chairs were women. Compare this to the fact that 64.3 per cent of the total UK retail workforce is female.

When we look at diversity in terms of race and ethnicity, the picture seems more dire. The BRC and MBS found that just 4.5 per cent of board members, 5.8 per cent of executive committees and six per cent of direct reports to boards are from an ethnic minority background compared to 12.5 per cent of the wider UK population.

Despite having D&I initiatives in place, why isn’t this reflected in leadership roles across the retail sector? Suki Sandhu, founder and chief executive of Audeliss Executive Search and INvolve, explained why it was so important to have this reflected in the boardroom.

“As the biggest private sector employer, leaders within the retail industry have an opportunity to make a big impact on the longer-term progression of underrepresented talent,” she told Retail Gazette.

“Even though leadership plays a key role and change should be driven from the top down, promoting diversity in the workplace ultimately must be everyone’s responsibility.

“We know that diverse teams perform better”

“This means it must be embedded into all areas of the company and be a consideration within all processes and policies – including recruitment, training, HR policies, office layout, social events, and internal communications, to name just a few.”

Helen Goss, employment partner at law firm Boyes Turner, added: “It is vital to have diversity across the business, including in leadership roles.”

“Diversity in all of its forms – age, ethnicity, gender, sexual orientation, disability – will bring with it a diversity of mindset and mind frame that will bring innovation and new ideas, giving businesses a competitive edge.”

Last month, Sainsburys announced it was joining the Black British Network in a move “to improve the representation and experiences of its Black colleagues.” The network, which was started by campaigner Cephas Williams, aims to drive change through partnerships with UK businesses.

Alongside this, over the past year the Big 4 retailer pledged to train its 1400 senior leaders and Sainsbury’s board members on talking about race and ethnicity. It also tripled its investment into the development of ethnically diverse colleagues, as well as complete an ethnicity pay gap review for the first time in its annual report, published earlier this week.

“We want to be a truly inclusive retailer, where all our colleagues can fulfil their potential and all our customers feel welcome when they shop with us,” Sainsbury’s chief executive Simon Roberts said around the time of the Black British Network announcement.

“To achieve this, it’s important that we stand up and take action against racism, by supporting our Black colleagues and customers across the country.

“We all have a responsibility to help build an equal society, free from racial discrimination and there’s still a long way to go.”

Meanwhile, just this week the John Lewis Partnership unveiled plans to become the UK’s most inclusive business for both staff and customers. While equal paid parental leave for mothers and fathers was a hallmark of that announcement, it also cited the work of its internal Black Partner Advisory Group over the last 12 months in prompting it to expand its reverse mentoring scheme, where ethnic minority staff from across John Lewis and Waitrose mentor senior leaders.

As more retailers continue to publicly show that diversity and inclusion is a priority for the business, there is still speculation that after the media attention around their D&I announcements fade away, there are no tangible changes to policies or within boardrooms.

Goss said that in the past she thought some D&I policies were “just for show”, but now believes businesses won’t be able to get away with that.

“Customers and employees are much more switched on to this issue and hollow words with no action to back it up could be very damaging to a business,” she explained.

While it is clear consumers are beginning to care, more than ever, about inclusion practices of their favourite retailers, is it crucial for a business to be diverse in order to see success?

“Frankly they are becoming increasingly essential,” said Ken Charman, chief executive of uFlexReward.

“Not only does diversity promote differing viewpoints and skill sets, but overall having a highly varied work force also encourages cooperation and tolerance,” he explained.

“More topically, in 2020 we saw a major push especially in the west for racial and social reform. Virtually all companies are now coming under pressure to have balanced representation among their employees as well as leadership.

“This has of course sparked some companies to respond with the hiring of their first chief diversity officer, which is a good start.  

Charman added that businesses needed to adapt, especially as more consumers become increasingly aware of the concept of D&I and won’t forget a business that has a bad track record on it.

“A business that caters to a more exclusive base stands to not only lose out on potentially millions of dollars in sales, but also could suffer from a bad public image,” he said.

“This sentiment is even more highly concentrated towards the modern youth, meaning it is likely that it will only become more ingrained in the popular consciousness as time goes on. As has always been the case in business, those that do not evolve, will likely die.

“And, let’s remember that companies have an obligation to maximise shareholder return and diverse companies are more successful.”

Sandhu said that if policies were not entrenched within an organisation, inclusion efforts risk becoming tokenistic.

“Therefore it is crucial that diversity and inclusion practices are prioritised in order to effect change,” she added.

“Organisations must do more to reflect their consumers, wider society and their workforce”

“Inclusive work environments allow companies to retain diverse talent and foster productive, innovative environments.

“We need more retail bodies and organisations to encourage professionals at all levels to be authentic leaders. Businesses are missing out on incredible benefits, despite senior talent pools being full of excellent, diverse candidates.

“It’s important for the retail industry to welcome diverse thinking across each level of its organisations to ensure that we are providing opportunities for all to succeed, it’s critical for retailers to draw on the range of experiences and expertise of a diverse talent pool to truly see the business succeed.”

While there is still much to be done to improve D&I in retail, is it safe to say there has been progress compared to previous years?

“I think we are starting to see progress,” Goss told Retail Gazette.

“Some retailers are really listening to what their customers and employees want, and what is important to them.

“There is still a way to go, but it is encouraging to see retailers taking this issue seriously.”

While progress remains slow, there are practical steps that retailers can take to improve inclusion and embed it into company culture.

Kristy Chong, founder and chief executive of the underwear brand Modibodi, suggested having open discussions with your workforce in order to shape what the D&I policy might look like and how it would work in reality.

“For example, who the staff member would need to contact to let them know for example, if they were taking a paid menstrual, menopause or miscarriage leave day, and to ensure you communicate that the policy is available for use and not just tokenistic,” she explained.

“All policies which need to be established genuinely and with the understanding people can access them when they need it without any stigma or repercussions, it can’t be done for a PR benefit.”

Sandhu added that retailers needed to draw on the value and impact of role models within their respective businesses to ensure that authentic voices and lived experiences are visible to everyone, at every stage.

“Until you provide a platform for your diverse talent to see people like themselves succeeding and achieving, it will be difficult to foster a truly inclusive culture,” she said.

“Having diversity training in place signposts your intentions to create change within the workplace culture.”

This could involve introducing a cultural ambassador or D&I specialist to support employees, answer queries and concerns directly, and liaise with senior management to evaluate approaches to fostering diversity.

Sandhu added it was vital for businesses to start tracking diversity data in order to hold themselves accountable for change.

“Tracking data can unveil areas in need of improvement within an organisation, stretching from recruitment through to retention, and can aid organisations in tracking their progress,” she added.

“Our efforts to make businesses more inclusive must evolve from words of solidarity to action and setting goals in place are an effective way to ensure we don’t deviate from making this a priority.”

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