In June 2022, I became one of the founding members of the Tackling Inclusion and Diversity in Energy (TIDE) Taskforce, a cross-industry initiative designed to share best practice around equity, diversity and inclusion (EDI) within the energy sector to support wider change.
TIDE is running an ongoing free webinar series covering different EDI topics, and in May 2023 I hosted the second webinar in our series on the subject of collecting EDI data and setting targets.
The importance of data is a message that we are all too familiar with. Part of setting any successful strategy is being able to measure its effectiveness, and data allows us to see what is working well and where there is room to improve. As they say, “you can’t manage what you can’t measure”. But collecting employee EDI data on protected characteristics can feel like a potential minefield, so it can be difficult to know where to start.
Collecting EDI Data and Setting Targets – where to start?
Most personal data is classified as special category data under GDPR, so you need proper plans in place around how you will manage and protect that data. However, a lot of value can come from better understanding the demographics of your workforce and setting targets that are both realistic and stretching.
So how do you go about collecting, collating, and analysing EDI data and then setting targets to make that data collection meaningful? My answer: pinch with pride.
That is why, when the TIDE taskforce decided to run a webinar on data collection and target setting, we reached out to two companies who are already on this journey and asked them to share their experience and learnings.
We were over the moon to be joined by Rosie MacRae, Head of Inclusion & Diversity at SSE, and Mark Russell, Inclusion, Diversity and Equity Manager at KPMG. A full recording of the webinar will be made available on the TIDE Energy EDI Hub – and I highly recommend that you watch it for yourself – but I would like to share some of the webinar’s key learnings:
Measurement – collecting, collating and analysing the data
Don’t try and reinvent the wheel. Do some research into frameworks and approaches that already exist and adapt those that align best with your business. In Rosie’s case, she used the Diversity and Inclusion Progression Framework from the Royal Academy of Engineering, which has been developed in partnership with a wide range of organisations from UK Power Networks to ENEI.
It is also important to understand up front what your ambition is for this data. What will this data drive or provide for your company? Rosie shared examples of 10 bias hotspots that data can help with, as well as actions that SSE has taken to address some of those biases, ranging from targets for gender split at a senior level to shaping training and helping to engage disadvantaged groups.
Disclosure levels can be a challenge – SSE admits that it didn’t crack this overnight and is a journey of continual improvement. Key to its current progress has been communication and providing clarity on the reasons behind why they are asking these questions of their employees. An additional interesting learning from Rosie was that she and her team assumed that the biggest hurdle would be building trust, but instead it was about demonstrating that this applies to everyone, not just to those who have certain characteristics.
Rosie also kindly provided examples of some of the many positioning materials that SSE has used and is happy to share for others to use as a starting point for creating their own versions. These can be found in the slide pack that will be available on the TIDE Energy EDI Hub very soon.
Target setting – using data to make a change
What are EDI targets?
Diversity targets, unlike quotas, are voluntary and aspirational. Quotas are used in some countries and are mandated by a government or regulator. In the UK, quotas would be contrary to the Equality Act, but targets are seen as a positive action and are allowed. However, even with targets there needs to be a legitimate need for them and that starts with having the data, which will highlight any inequalities that justify having targets.
It is important to appreciate that targets cannot be used to make individual recruitment decisions.
Why do we need them?
Transparent targets ensure accountability and can be powerful in driving action, as well as tracking progress. By making your targets public, you not only demonstrate your commitment, but they can also act as a means of attracting people to your business.
Diversity and inclusion are rapidly becoming corporate governance necessities rather than nice-to-haves. Governments and regulators are demonstrating greater levels of scrutiny, including the mandating of certain types of reporting for a growing number of businesses. In the environmental, social and governance space, the emphasis on non-financial reporting is only going to increase.
Targets have also shown to deliver tangible progress, such as the FTSE Women Leaders Review and the Parker Review, with over 40 percent of board positions at FTSE 350 companies now held by women, compared to 9.5 percent in 2011.
How do I go about setting targets for my organisation?
When setting targets, data is key. Start by understanding what data you have and what it tells you. This will be crucial in setting targets that are realistic and appropriate. You may decide that the first target you wish to aim towards is improving the quality and disclosure rates of your data.
KPMG’s Mark Russell explained that this was one of the approaches that KPMG took when introducing the new target area of socio-economic background. They knew the data they held in this area was not up to scratch, so their initial target was to improve that data quality before setting targets to improve representation.
Once you understand your initial position through data, you can begin to explore where you wish to get to, which will form the basis of your targets. Mark highlighted the importance of being robust, ensuring your targets are explainable and defensible. A good way to do this is through benchmarking. You can do this by sector, but it is also worth considering your geography, your customer base (if relevant), and the community in which you operate. Seek out existing data to help achieve this aim; for example, the census can be a good source of population data based on geographical area.
You may also wish to use your data to decide how to give your target setting focus. For example, when KPMG embarked on its target-setting journey, it identified that the area of greatest inequality was in the make-up of its leadership, which became the focus of its targets.
For targets to be successful, they require buy-in, so it is really important that you consult and engage. Where you can, consult with external experts. They will be able to help you with data modelling and assurance. Even more importantly, engage internally, including your internal governance, leadership teams and broader employees. By asking questions such as “do these targets feel right to you?” or “do they present any concerns or challenges?”, the answers should be able to provide a vital temperature check for your proposed targets and improve your chances of buy-in and increase disclosure levels once the targets are rolled out.
Also, think about the intended timeline of your targets and be prepared for them to change and develop over time as your business and the landscape you operate in changes. KPMG went through three iterations of target setting, the details of which can be found in the webinar. Its latest set of targets, rolled out in 2022, are the boldest to date as well as having the longest timeline for delivery to reflect its longer-term thinking.
Consider who has ownership and is accountable for your targets. Mark found that when KPMG started on its target-setting journey, the pace of progress was initially slow. Though this improved over time, one of the most significant accelerators for change was when they moved accountability from sitting solely with the central EDI team to being the responsibility of the whole business.
Finally, targets help you understand where you are trying to get to, but you also need to understand how you will get there. You need an action plan and strategy to achieve them. In the case of KPMG, every business area has its own action plan based on the four key pillars of KPMG’s EDI strategy.
These four pillars not only consider every stage of the employee life cycle but also consider other business aspects such as the systems and processes in place, as well as the role KPMG has on a broader stage.
There are many components to consider when initiating data collection for your EDI strategy. Regardless of the size of your organisation, others have walked this road before and are now sharing their experiences to make setting EDI targets achievable, faster and easier.
If you’re in the early days of formulating your EDI action plan, you can catch up with the first session in the TIDE webinar series, which covered building an EDI strategy, on the Energy EDI Hub. You can also find out more about ElectraLink’s EDI strategy.