Diversity monitoring in the workplace

Our clients often ask us whether they should be monitoring diversity and if so, the questions to ask. In some cases you will be obliged to carry out diversity monitoring anyway (due to the size of your organisation or the sector that you work in) but really its value will be realised if you have really considered the questions that you are going to ask and how you are going to use the results to make your business more inclusive. 

Most employers carry out some sort of diversity monitoring, usually at recruitment stage, but this has recently gained a more prominent focus with increased exposure due to the gender pay gap reporting requirements for private and voluntary sector employees with more than 250 employees which were brought in a few years ago (public sector employers being subject to a similar duty under separate legislation) and the Black Lives Matter movement and high profile diversity issues such as the BBC gender pay gap more recently. Many employers are realising the importance of diversity and looking at how to improve it in their companies and in a difficult recruitment market, to explore new avenues to attract previously untapped talent.

When conducting diversity monitoring it is important that employers ask questions that will encourage honest responses as well as complying with the law on data protection, so how can employers achieve this?

What types of data could employers collect?

The Protected Characteristics within the Equality Act 2010 (EA 2010) are a good starting point for employers to consider when creating questions for diversity monitoring forms. However, employers may not want to limit themselves by only asking questions that relate to them.

Employers may wish to consider the following when conducting diversity monitoring:

Age

The Equality and Human Rights Commission (EHRC) recommends that if using age bands, that they are narrower at both ends of the spectrum, as age discrimination claims are more likely to arise from these groups.

Gender

As mentioned above, there is currently a requirement for employers who have 250 or more employees to provide annual reports on gender pay gaps. Additionally, many employers with less than 250 employers are providing gender pay gap reporting on a voluntary basis to ensure transparency in recruitment and for their current employees.

To make gender monitoring more inclusive, employers could include the following options in monitoring forms:

• Non-binary;
• Prefer not to say; and
• Other.

Transgender identity

When collecting data on individuals’ transgender identity, it is important that an employee does not feel like it is mandatory to disclose the fact that they are transgender. Additionally, if an employee does disclose that they are transgender, employers must not share this information without the employee’s consent as the employer could be committing a criminal offence in doing so.

Employers may wish to include the following in monitoring forms:

• “Is your gender identity different from the one you were assigned at birth?”; and
• Prefer not to say.

Ethnicity

Despite the decision by the Government not to introduce mandatory ethnicity pay gap reporting, some employers have provided reports on a voluntary basis.

To ensure that accurate results are collected, it is important that employers offer a wide selection of ethnicity options. Employers may wish to use the same terminology as that used by well-established organisations, such as the Office for National Statistics, namely:

• White British;
• White other:
• Mixed/multiple ethnic groups;
• Asian/Asian British;
• Black/African/Caribbean/Black British; and
• Other ethnic group.

Sexual orientation

When collecting this data, it is important that employers use the correct terminology and offer a wide selection of sexual orientation options.

Stonewall, a UK LGBTQ+ charity, recommends using the following terms:

• Heterosexual/straight;
• Bisexual;
• Gay man;
• Gay woman/lesbian;
• Prefer not to say; and
• Including an option for employees to self describe.

Religion and belief

In addition to collecting data on employees’ religions where helpful for their companies, employers may also wish to offer options where employees can self-describe other philosophical beliefs (as these are also protected under EA 2010).

Disability

There is currently no standardised approach for employers to collect data of employees’ disabilities. Although, the Government have consulted on introducing a standard system that would assist employers in asking these questions.

When can employers conduct diversity monitoring?

The recruitment process is often a popular time for employers to collect data on diversity monitoring. If doing so, it is important that the monitoring and application processes do not overlap. This is to ensure that any data provided through diversity monitoring cannot be argued to have influenced the decision in an individual’s application, and therefore give rise to a discrimination claim.

The EHRC Code of Practice recommends monitoring the key areas of the employment relationship as well as recruitment such as promotion, pay and remuneration, training, appraisals, grievances, disciplinary action, dismissals and exit interviews.

Complying with the law on data protection

Data collected during diversity monitoring may be sensitive personal data. Under data protection laws, the processing of this data is subject to stricter rules. However, employers are able to collect this data by relying on Schedule 1(8) of the Data Protection Act 2018 for the purposes of diversity and equality.

While conducting diversity monitoring, employers should emphasise to employees that providing personal data is voluntary. Moreover, employers should be aware that Schedule 1(8) should not be relied on to take “measures or decisions” in respect of a particular individual.

To comply with data protection laws, employers must inform their employees of the reason for seeking to collect this data, how the data will be used and to whom it will be disclosed. In many cases it is thought that when employers are transparent on these points, employees are more likely to provide this data if they are aware that it may help to improve diversity in their workplace.

Conclusion

It can be challenging for employers to conduct diversity monitoring as they must ensure that they are asking suitable questions, using the correct terminology and complying with data protection laws. However, when employers collect appropriate data, it is possible for it to then be used in ways that will increase diversity and equality in their companies.