Real Estate and the Built Environment have evolved significantly in recent years - many businesses are re-evaluating their functions within the markets within which we operate, seeking to deliver increasing value to stakeholders, often in the form of increasingly targeted projects and services.
A key area in which this evolution has achieved sudden momentum is in that of Diversity, Equity and Inclusion (DE&I) which has led many organisations to set goals and targets around improving their performance in both organisational composition and client reach. Research such as Diversity Wins: How Inclusion Matters (McKinsey & Company) concludes that increased revenue growth, improvements in innovation, and enhanced decision making are the key outcomes afforded to organisations with greater diversity.
Diversity is often the DE&I focus because it appears to be the most straightforward of the concepts to implement. Observers assume that the population of an organisation as a whole, meets the criteria of diversity where multiple characteristics are evident. This ignores the reality that not all participants within that organisation will have the same degree of influence and autonomy of decision making in most businesses.
Where I see this reflected is in the persistence of pay gap statistics where it is not unusual to see organisational compositions where women reflect the general population in numbers at around 50%, however reported pay gaps remain above 30%. The limitations of the requirements for these calculations aside, in most cases accompanying footnotes explain that women are concentrated in non-central functions with limited influence and autonomy.
Tackling the why is a challenge, however the Government Equalities Office provides guidance on evidence based targeted interventions that are moving the dial internationally. This begins with further interpreting the data we hold while asking ourselves key questions such as:
Are women more likely to be recruited into lower paid roles?
Do particular aspects of pay (such as starting salaries and bonuses) differ by gender?
Do men and women receive different performance scores on average?
Is there gender imbalance in your promotions?
Do people get “stuck” at certain levels within your organisation?
Are you doing all that you can to support part-time employees to progress?
Do men and women leave at different rates?
Are you supporting both men and women in your organisation to take on caring responsibilities?
Without the additional insights these questions provide, moving forward will remain a persistent challenge for our industry.
When I commented last month I highlighted the importance of the loss of talent within our industry as a fundamental hurdle in delivering the diverse teams which create the wider organisational and financial benefits of high quality decision making. My thinking is connected to the explanatory footnotes I mentioned above. For many organisations, the workforce already reflects the society we live in purely numerically, however a persistent challenge exists in recruiting, developing and promoting diversity into central decision making functions. Progress does need to be made in increasing proportions among other groups, but this is not the solution in isolation. Retaining the talent we have, while also attracting new talent means taking targeted actions addressing where the bottlenecks currently exist.
The paradox for our industry is that, in the DE&I space the leaders emerging are often the members of the diverse groups our energies are targeting. If these individuals are leaving, this tells us that there is a gap between the work they are doing and the wider impacts and recognition received for carrying out the work. The data tells us that the very individuals we are targeting, may not hold decision making positions, this is a feedback loop if the work they are carrying out does not lead to the acquisition of decision making positions. This means there is a gap between what we say we value, and how we recognise that value that must be addressed.
To short circuit this feedback, we need to communicate the value delivered to our organisations with a clear path to progression that recognizes the time, energy and skills of those individuals carrying out this work. This may be difficult because outcomes are produced outside their primary organisational role, so a mechanism for consideration of this additional work should be implemented for performance reviews and become a structured part of discussions of career progression. Doing so, means that individuals demonstrating the qualities and skill sets required to attain decision making roles and progress are identified and given routes to opportunities within core business functions. In summary, their activities in DE&I must be recognised equitably alongside the delivery of their primary role, and should receive active recognition when reviewing performance and making promotion decisions. This recognition must be proactive, tangible and commensurate with the methods we use to reward success across the organisation.
Ally Reid is an Investment Manager at Landsec