Measuring the impact

Across the professional services sector, it is encouraging to see that companies are embracing the benefits that having a truly diverse workforce can bring.

Not only is it the right thing to do, but firms are starting to recognise that a strong business case exists for robust diversity, equity and inclusion (DE&I) practices. From employee engagement, attracting and retaining talent, inspiring innovation, building trust, and shaping and protecting corporate reputation, DE&I can play an important role in driving commercial success.

‘As trusted business advisors, it is imperative that the accountancy profession take ownership, lead from the front, and set the standard on DE&I initiatives.

‘There is no room for unconscious bias in today’s society; we must advocate a conscious inclusion mindset, encouraging business leaders to recognise and adapt their own biases to drive forward change.’

Conscious inclusion

There is no one-size-fits-all approach to diversity, equity and inclusion. A lack of diversity in the workplace can happen for many reasons, but unconscious bias is high on the list of causes. Unconscious bias results in the continued exclusion of historically marginalised groups of people, often because of their gender, ethnicity, or culture. Whatever the reason, it is crucial to address how bias is perpetuated systemically in corporate cultures and what can be done to address it.

Conscious inclusion is a mindset that actively addresses unconscious biases and puts this thinking into practice. Conscious inclusion in professional services takes place at senior management levels and in the everyday workings of businesses. It requires leadership to recognise – and work on – their own biases that serve to drive the inequities in the corporate status quo. Leaders need to also evaluate how they make decisions around things such as giving promotions and who gets assigned what kinds of projects. Transparency around decision-making is crucial here. It requires decision-makers to consciously interrogate their selection criteria rather than rely on nebulous notions of who “fits in” – which often relies on unconsciously held biases and excludes minority groups.

Actively prioritising DEI and formalising it into the corporate structure of a business is one way of acting in a consciously inclusive manner. Rather than leaving these issues unspoken, conscious inclusion promotes awareness of DEI and a thoughtful assessment of DEI’s impact throughout the business.

Once DEI policies are in place, work needs to be done to track and measure their effectiveness. Similar to corporate sustainability, which is now as a field solidifying best practices and working to create standardised reporting frameworks, DEI is another area that is finding its feet in terms of effective and consistent reporting.

Currently, there are no standardised frameworks for the industry as a whole when it comes to tracking DEI and measuring outcomes.

One of the key steps for organisations is to define what DEI means to stakeholders when setting benchmarks. Diversity can be defined by many demographics, including geography, race, gender, disability, sexual orientation or professional experience. From there, companies must evaluate the composition of their boards, C-Suite, and workforce using robust parameters. Ideally, a company’s board and management team should reflect the full makeup of its stakeholders to ensure that decisions are made in accordance with the latter’s interests and values.

However, there is a concerning gap emerging between the number of companies that are carrying out DE&I initiatives, and the number which are measuring the success of them.

Accountancy firms are lagging behind their legal counterparts

For our latest report, ‘A Fairer Future: Equity and Inclusion in Professional Services’, we surveyed 570 respondents working in professional services firms across the UK and the US to find out. While it was good to see that nearly three-quarters (75%) of those surveyed had formal DE&I policies in place, a third (32%) could not provide evidence that their DE&I efforts were working for their employees.

This trend extends to the accountancy sector in spite of the fact that accountancy revolves around numbers, facts and the right data. Only 73% of accountancy firms measure the success of their DEI initiatives, compared to 84% of legal firms.

Accountancy firms are also less active than their law firm counterparts when it comes to running DE&I initiatives. Currently, 73% of accountancy firms surveyed have run a specific DEI initiative across their company in the past six months, in comparison to 86% of legal firms.

Why is it important to measure your DE&I initiatives?

DE&I can be more challenging to measure in comparison to other key performance indicators typical in a business. Similar to corporate sustainability, it is an area still finding its feet in terms of effective and consistent reporting. There is currently no standardised framework for the professional services industry when tracking DE&I and measuring outcomes.

This should not stop accountancy firms from evaluating their individual progress. Similar to how key performance indicators (KPIs) are set out in other areas of the business, leaders at accountancy firms must set clearly defined goals when it comes to creating a more inclusive culture and make a regular, consistent effort to ensure that they are on track to achieve them. These goals could cover a range of aspects, including recruitment, promotions, pay gaps and employee satisfaction.

If firms don’t have these goals in place, there is the danger that your firm could be perceived as being guilty of ‘performative policies,’ where firms can point to having DE&I policies in place and reap the rewards of being perceived as inclusive, but are unable to show evidence that these are really initiatives working. This type of behaviour will only alienate dissatisfied employees even more, and can have serious knock on effects for your business.

Particularly in today’s climate, where employers are facing crises of recruitment and retention, businesses need to genuinely address DE&I issues and be able to show the numbers to back it up.

People rarely ‘fit’ into one box

When setting goals, it’s important to remember that when it comes to DE&I initiatives, one size rarely fits all.

One of the first steps to set benchmarks for DE&I initiatives is to define what it means to stakeholders. Diversity is a vast term and covers a range of different demographics, including geography, race, gender, disability, sexual orientation and professional experience. Firms should be careful when segregating people by their perceived identities or into ‘special interest’ groups. Instead, they should recognise that intersectionality exists and build ways of working around that.

Intersectionality is the practice of recognising intersecting identities and examining how exclusion can be compounded along multiple lines. For example, our report highlights how the gender pay gap is much worse for women coming from Black backgrounds; and while LGTBQ+ people are underrepresented in professional services at senior levels, lesbians are much more affected in terms of representation across all levels, from entry positions upwards.

There is an opportunity for accountancy firms to set the bar

Accountancy firms are trusted business advisors to companies of all shapes and sizes across regulatory requirements, corporate governance and financial reporting, and there is the potential that improvements to DE&I in their sector can

Howdoesaccountancyrateagainstotherprofessional servicesinitsDEIinitiatives?

Do you measure the success of your DEI initiatives? iResearch Services: A Fairer Future: Equity and Inclusion in PS

Have you run any specific DEI initiatives across your company over the past six months? iResearch Ser vices: A Fairer Future: Equity and Inclusion in PS be translated across to the businesses that they work with.

Looking ahead, firms need to take a fresh look at how they are evaluating their diversity and inclusion programmes. Lots of time, money and effort typically goes into these initiatives and so it is in everyone’s interest to ensure that this is well spent, reflective of their workforce, and most importantly, that they are having a real positive impact on employees across all levels of the business. ●

‘A fairer future: equity and inclusion in professional services’ is available from iResearch.