Protests over the dearth of actors who are black or from an ethnic minority have cast a shadow of controversy over Sunday’s Oscars ceremony. A boycott by film luminaries including actor Will Smith and director Spike Lee aims to highlight the lack of diversity in front of the camera and has prompted a discussion about race in the entertainment and media industries.
In response, the governors of the Academy of Motion Picture Arts and Sciences, the professional body that organises the Hollywood awards, last month committed to increasing the number of members who are women and from ethnic minorities by 2020.
With this move, the Oscars organiser reflects a growing trend in industries as varied as television and accountancy.
Employers frustrated by the slow pace of change, including the Bank of England, Intel and KPMG, are setting targets for increasing the number of employees from black and ethnic minority backgrounds.
In some cases strategies supporting these targets are being integrated into managers’ objectives and even tied to their compensation, alongside more conventional goals such as increased sales.
Lord Holmes, the Paralympian who sits on the UK’s Equality and Human Rights Commission, makes the case: “Aligning performance assessment, including performance-related pay, with progress on meeting diversity targets can be a valuable way of ensuring [it] is taken seriously by those at the top as well as throughout organisations.”
New York-based Ripa Rashid, managing partner at the Center for Talent Innovation, which researches diversity, agrees. “Tying diversity to executive compensation is not a silver bullet but it sends a message about accountability,” she says.
Ms Rashid explains that, while the idea of setting targets has its roots in affirmative action policies in the US and South Africa, it has resurfaced, notably in Silicon Valley in the past couple of years, because big tech employers including Google, Twitter and Facebook, decided publicly to disclose their diversity measures. The push for women on boards has also contributed to the trend, she says.
Amir Kabel, head of diversity and inclusion at Green Park, a UK executive search firm, points out that targets work best when accompanied by a range of diversity measures. Or else “companies get fixated on targets, which drives the conversation on ‘hitting the numbers’ — and, dare I say it, is a bit tokenistic”.
Intel, the US chipmaker, has been transparent and vociferous on this issue. It announced targets for 2016 to achieve 14 per cent hiring of under-represented minorities in the US, tying success to employees’ compensation. It was accompanied by a $300m diversity fund.
In the UK, Channel Four has set diversity objectives that will help “determine the annual variable pay pot for senior staff”. In effect, senior managers risk losing bonus payments if the broadcaster fails to ensure that 20 per cent of all staff and 15 per cent of top 120 leaders is black, Asian or from an ethnic minority background by 2020. Dan Brooke, the broadcaster’s chief marketing officer and diversity champion, says targets help to focus minds. “It makes the way people think more disciplined. I would be amazed if in four years from now Channel Four is not a different place.”
Joelle Emerson is founder and chief executive of Paradigm, a diversity consultancy based in Silicon Valley working with tech firms, including Pinterest. She says companies can set targets in different ways. “While often a long-term goal is to reflect the population of the communities in which the organisation works, it can be helpful to set shorter-term goals.” These might include looking at the ethnic composition of the local talent pool: for example, setting a short-term target that 15 per cent of engineers should be black or Latino to match the ethnic composition of US computer science and engineering programmes. Targets for senior roles are also worth considering, to ensure that ethnic minorities are represented at all levels of the organisation and not just there to boost numbers.
Other methods include a minimum percentage for candidate slates, so managers are forced to look at a wider pool, mixed interview panels to balance out any bias, and anonymous CVs.
Mr Kabel sees the benefits of tying targets to executive compensation. “Once you make it part of a leader’s pay and incentivise it, it will most likely create a sense of priority.”
KPMG, the professional-services firm, includes diversity goals in performance reviews but does not link them to executive compensation. Maggie Brereton, a partner in the UK, found target setting forced action better than warm words. “We are the leaders and have to take responsibility. The pace of change is slow; I see it as an opportunity to increase the speed.” She says it does change behaviour. “In the old days you could fudge it but now you have to articulate clear actions to take.”
NV Tyagarajan, chief executive at Genpact, a business process outsourcing company, has set targets on improving the number of senior positions held by women. While he does not include ethnicity in senior executives’ performance reviews, he thinks linking targets to compensation is key.
“If it’s important then do it properly. The business is run by metrics and our culture is you get what you measure,” he says. He believes it only works if performance reviews are taken seriously.
Chris Yates, co-author of Rewire, a book on diversity and the workplace, says embedding targets in managers’ incentives takes the responsibility for diversity out of HR’s hands and ensures it is seen as essential to the business. “If it’s forced on you it doesn’t work.”
And not all diversity campaigns harmonise: some are nervous about target fatigue. The 30% Club, which campaigns for more women on boards, has been reticent on ethnic minorities: “Setting more and more targets for companies, however well-intentioned, just leads to gridlock and possibly resentment.”
Some sectors are easier to change than others. In 2014, Peter Bazalgette, as chairman of the Arts Council England, told arts organisations that they needed to set out diversity plans or risk losing public funding. He observes that targets can be difficult in the creative industry. “A casualised industry with a massive freelance community is harder [to monitor] than a large accountancy firm with checks and balances.”
Tony Peers, director of HR at the National Theatre, says their 2021 target that at least 20 per cent of their workforce are from black and ethnic minority backgrounds is not built in as a measure of performance because productions are more collaborative than, say, a trading floor.
Ms Rashid sees targets working best where data are part of the culture, such as tech and financial services firms. Retention requires focus too. It is no good getting a black recruit in through the door if they only walk back out of it again.
And while some critics charge that targets mean lower standards, Ms Rashid is dismissive. “It’s conscious bias, not even unconscious bias, to think that a diverse workforce will bring the quality of the work down.”