Social movements have placed diversity, equity and inclusion (DE&I) at the forefront of organisations’ agendas.
With clients and talents demanding DE&I commitment, such initiatives are core to a successful business, from public perception to profitability.
There is far more to DE&I than just having a diverse workforce in terms of numbers. In implementing DE&I initiatives, companies find themselves having to strike a delicate balance between the associated discrimination and data risks and the benefits that DE&I has to offer.
Diversity is a representation of the collective differences and similarities across the workforce. While the law has generally recognised specific characteristics such as gender, race, ethnicity, age, and disability, diversity goes beyond these limits. The diversity of thought and experience brought by employees to the workplace, such as cultural and socio-economic background, is seen as the core of successful businesses. McKinsey’s 2020 report Diversity Wins: How Inclusion Matters finds that companies in the top quartile for gender diversity and ethnic diversity were respectively 25% and 36% more likely to have above average profitability than companies in the fourth quartile.
Equality in the workplace is a laudable aim. However, in recent years this is seen as just a starting point, since providing equal resources does not tackle the root problem of unequal access. This is why the concept of equity has become increasingly important as this recognises individual needs and reaching an equal outcome.
Inclusion is the idea of individuals having a sense of belonging within the group. It is not a necessary consequence of diversity and equity – a company may hire diversely but will not be able to retain talents if the employees do not feel included. Achieving an inclusive workplace is often the biggest challenge and capturing the data to measure how inclusive a workforce is can be challenging.
The discrimination landscape varies across Asia and shapes the way DE&I strategies are to be structured. Some countries, such as Singapore and mainland China, do not have freestanding anti-discrimination legislation. Protection is afforded under various civil and criminal laws (e.g., termination based on discriminatory grounds constitutes wrongful dismissal under Singapore’s Employment Act).
On the other hand, some jurisdictions have a dedicated anti-discrimination framework, including Hong Kong and Australia. The body of legislation makes it unlawful to discriminate based on protected grounds and provides specific remedies. With a more robust regime, it is more important to have a substantial DE&I agenda in these jurisdictions.
Positive action has been taken by many organisations in an attempt to overcome systemic disadvantages, with the aim of achieving more equitable outcomes. In taking such steps, it is vital to consider the jurisdiction’s discrimination landscape, particularly the line between lawful positive action and unlawful positive discrimination.
Positive actions are targeted initiatives to level the playing field. Some jurisdictions have introduced similar notions in their discrimination framework which represent a limited exception to the general principle of equal treatment, such as the “special measure" concept in Hong Kong and Australia.
In contrast, positive discrimination favours someone by treating the person differently on the ground of his or her protected characteristic and this may constitute unlawful discrimination. An example might be a company appointing an individual due to him or her being an ethnic minority while other candidates who are better qualified are passed over. This is in contrast with positive action where candidates are subject to the same standard and the disadvantaged candidate is only hired if he or she is equally qualified.
In manoeuvring the boundary between lawful positive action and unlawful positive discrimination, the following are key elements to keep in mind:
Supporting evidence for positive action – organisations may use qualitative data to demonstrate the need to address a disadvantage (e.g., diversity data showing underrepresentation).
Proportionality – important factors to consider include the extent of the disadvantage suffered by the group and the potential impact of the positive action on others (e.g., avoiding blanket policies).
Continual monitoring – regular assessment should be conducted to ensure positive action does not go further than necessary as participation improves.
HR data forms the foundation of DE&I initiatives as it provides insights to an organisation’s needs and concerns. While data privacy regimes may differ significantly across Asia, they generally share similar guiding principles –
If an employee can be identified from the information, it will constitute “personal data”, and its collection, processing and usage will likely be governed by data privacy laws;
Data must be collected and used for the specified purpose, and not be excessive for achieving the purpose;
Consent may be necessary, particularly where the data is used for new purposes; and
Special treatment of sensitive data is required in certain jurisdictions, such as mainland China where information relating to race/ ethnicity is subject to more stringent requirements.
Companies may consider whether it is sufficient to collect anonymised data since fully anonymised data may not fall within the data privacy regimes and employees are generally more willing to give accurate responses (i.e., better data quality). Even if data is collected anonymously, unique combinations and overly small sample sizes should be avoided (e.g., if there is only one black female employee in the company and the survey identifies a person as black, the associated data will not be anonymous).
As data privacy laws generally restrict the usage of HR data to the specific purpose stated by the employer, scoping is fundamental. This allows organisations to correctly target the HR data necessary in achieving its objectives, and ensure that data collection is minimally intrusive.
Given the sensitive nature of the information, HR data should only be accessed by relevant personnel on a need-to-know basis in addition to implementing data security measures.
DE&I and the employment lifecycle
DE&I come into play throughout the hire-to-retire lifecycle. Starting with building a diverse workforce, HR data is essential in identifying areas of underrepresentation. Organisations can then assess their recruitment efforts, interview structure, and evaluation criteria to ensure that they are attracting top talents from diverse backgrounds (e.g., adopting positive action such as placement goals and targeted outreach) and to eliminate bias from the selection process, for example, representative recruitment committee and challenging problematic criteria such as “culture fit”.
Once talents are hired, DE&I remain vital in retaining and nurturing talents. HR data is equally important in reflecting representation metrics, tracking turnover rates, and understanding the employee experience. Performance objectives and promotion processes should be reviewed to address barriers and remove subjectivity. Companies may also consider implementing positive action such as tailored training and mentoring programmes and internal support/ally networks.
Practical challenges and key takeaways
Managing DE&I strategies across Asia
One of the biggest challenges for multinational organisations is to implement and manage DE&I initiatives on a regional or even global scale. Given that DE&I are inextricably linked to the local culture, history and even the current social atmosphere, there is no one-size-fits-all solution and an effective DE&I strategy will need to be tailored for each company and in each country.
A key starting point is to identify the unique needs and concerns for the employer in a location and to craft specific initiatives and policies addressing these objectives, while taking into account the legal regimes and socio-cultural context.
Good employee communication is crucial in a successful DE&I programme. While there is a myriad of ways to manage communication, the key questions that any communication should address are “Why is this important?” and “What is in it for me?”
Being able to convey to the workforce the purpose of the DE&I strategy and how it will better the workplace are vital in managing employee perceptions and reactions. This will also vastly improve data quality if staff members believe that the data is useful and meaningful.
In considering how best to conduct the communication, the intended audience, language and culture will play a major part in steering how this is done. Ancillary documents such as FAQs and townhall meetings are helpful tools which create opportunities to answer tricky questions.
DE&I has become a permanent fixture in the business landscape. It is integral not only to employee wellbeing, but also commercial decisions. When formulating DE&I initiatives, employers should not only align the measures with the contours of discrimination and data privacy regimes, they should also be mindful of the local socio-economic backdrop.