We all know that diverse companies foster innovative and productive work environments that support revenue growth, retain employees and attract the best talent.

Yet, how do we achieve this?

Organisations want to recruit the best people. However, research shows that companies are not necessarily recruiting on merit, but hiring those who are like the people already in the most senior positions, creating homogenised workforces.

For example, an annual survey released in November 2022, found that 91% of the 413 women on FTSE 100 boards were in advisory non-executive director roles. Of the remaining 9% in executive roles, just nine women held the top job of CEO.

Diversity quotas have been lauded by some as an effective and quick route to equality. They are a system used to increase the number of under-represented groups into specific positions by requiring that a certain percentage of those in that position or level of seniority are, for example, of a given gender or ethnicity.

So let’s take a deeper look at the advantages and disadvantages of diversity quotas.

They work quickly

Many EU countries have quota laws that have worked quickly to bring more diversity into workforces and forced the subject to the top of the business agenda. In 2006, Norway introduced a 40% minimum quota for each gender for public companies and achieved this by 2008.

It’s worth noting that in the UK while setting quotas isn’t unlawful in itself, ‘positive discrimination’ is prohibited under the Equality Act 2010. Therefore, an employer can’t hire a woman or someone from a particular background simply because they are a member of an under-represented group, which could place them at risk of a discrimination claim from unsuccessful candidates.

However, the law permits ‘positive action’, which allows employers to take reasonable steps to address obstacles faced by marginalised groups, such as offering additional training. Also, when two equally qualified candidates are eligible for a position, leaders can lawfully choose the candidate from an under-represented group over the other.

Promote a greater search for candidates

Filling quotas naturally encourages a wider search for candidates that doesn’t just meet diversity numbers but also increases the general talent pool.

Become redundant over time

Increasing diversity through quotas compounds over time. For example, companies with women on their boards are more likely to hire and promote qualified women. While they are initially an outside force, once enough cultural momentum has built up, quotas can make themselves redundant and be removed.

Cut through bias

The lack of hiring and promoting diverse employees is deep-rooted in decades, even centuries, of cultural assumptions and biases, as well as differences in education and investment in development. They take hard work and time to unravel, but quotas cut straight through these and provide a direct path to increased employment and influence for those from marginalised groups.

BUT…

Diversity doesn’t work without inclusion

Avoiding the important work to tackle bias may provide you with a shortcut to diversity, but it does not promote inclusion. Tweaking a company’s hiring and promoting procedures won’t make people from marginalised groups feel welcome unless efforts are made to identify and breakdown systemic biases and inequalities in our workplaces. Without inclusion, whether the doors have been opened for them or not, candidates will quickly look to walk back through them, damaging retention and ultimately your organisation’s reputation.

Lead to performative allyship

Quotas can easily lead a company to slip into performative allyship. If they are too busy publicly congratulating themselves on meeting a number, rather than using diversity quotas to hone in on improving inclusion, then the initiative will only have achieved surface-level changes that don’t foster the innovative workplace cultures they strive to achieve.

You can prove anything with statistics

Companies may have to hire or promote ‘x’ number of women as directors, but quotas don’t have to specify what roles and responsibilities they take. Unenthusiastic organisations, for example, can employ female directors but relegate them to the least influential committees.

There’s no guarantee people will speak up

Increasing the diversity in a room isn’t the answer to eradicating discrimination if no one feels empowered to speak up. Leaders may be boasting about a company where all voices are heard, but if victims and witnesses do not have the means to report unacceptable behaviour, such as dedicated HR representatives or an anonymous employee hotline, or feel like they will be listened to when they do, then little will change.

Intersectionality is ignored

Even with diversity quotas, homogenised workforces are hard to shrug off. For example, of the very few female executive directors in FTSE 100 companies, did you know that the vast majority are white? So even when members of under-represented groups are given a seat at the table, perspectives remain narrow and opportunities to diversify the experiences and viewpoints in the room further through intersectionality can be missed.

Poor perception of minority candidates

Quotas have the power to influence the perception of minority candidates unfavourably. They can encourage the belief amongst existing employees that those from under-represented groups are less qualified and didn’t necessarily acquire their positions through merit, which is untrue.

The successful candidates may also be displeased to learn they were chosen for their roles because of their gender or ethnic heritage, or any reason other than being the best person for the job, which could make them feel like they don’t belong.

 

Equality, diversity and inclusion mean bigger and better ideas, a strong and credible brand, and – most importantly – a happy and motivated workforce. Invest in your organisation’s culture and future with Tell Jane’s bespoke consultancy and training programmes designed to drive and embed real change. Email hello@telljane.co.uk to get started.

 

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