"Diversity and inclusion are now business critical"

Lloyd Davey, partner, says retailers must make progress swiftly towards diversity and inclusion or risk damaging their business.

As retailers do battle with the Covid-19 crisis, creating a diverse and inclusive culture is no longer optional: those that see it as a "nice to have" are already falling behind their more progressive competitors.

As we enter 2022, it continues to be a turbulent period for British retail: almost three-quarters of a million workers reportedly walking out of jobs in the sector in August and employers are now struggling to fill those vacancies. It is well known that businesses that embrace diversity attract the best talent and are especially appealing to younger workers. Inclusive cultures enjoy greater employee engagement and higher levels of retention. In short, if workers feel supported by their employer – seen, heard and respected – they respond with loyalty.

How are these forward-thinking retailers developing a more supportive culture?

What is more, the commercial benefits of diversity and inclusion go much further than retention, as investors are fully alive to the issue and are applying pressure on businesses to adapt and reform. Research shows that a more diverse workforce leads to greater innovation, and better outcomes for both customers and the brand. For example, it is generally acknowledged that women have greater influence over purchasing decisions, which is why higher female representation in fashion businesses is critical.

However, gender is only part of the story: thriving businesses are those fostering cultures that embrace diversity on a far wider scale, improving the representation of ethnic minorities, disability, LGBTQ+, age, social mobility and neurodiversity.

Ultimately, a diverse and inclusive culture now plays a vital role in the retention of staff and business performance – both key ingredients in any business’s fight against Covid-19. So, how are these forward-thinking retailers developing a more supportive culture, and what can others learn as we enter 2022?

Family leave

Over the last year, we have seen several fashion retailers introduce new forms of paid leave to support their staff during challenging life events. For example, in June, the John Lewis Partnership introduced six months of paid paternity leave and two weeks of paid leave for employees who lose a pregnancy.

One of the few positives to come from the Covid-19 pandemic is the normalisation of remote and hybrid working

As of October, Asos has offered 10 days’ paid leave for staff who have experienced pregnancy loss, including miscarriage and abortion. Its policy also applies to staff whose partners experience pregnancy loss, recognising the emotional effects on family members. Asos staff who are undergoing fertility treatment are also now entitled to five days’ paid leave per IVF (in vitro fertilisation) cycle to ensure they can attend necessary appointments. Finally, like many retailers, Asos has also introduced paid leave for those suffering from menopausal symptoms, but also offers paid leave to those undergoing gender reassignment surgery and those fleeing from domestic abuse.

Promoting flexibility

Many fashion businesses are also genuinely championing flexible working, which has been proven to increase diversity and support retention. Previously, the needs of many working parents for flexible working arrangements to facilitate childcare were not accommodated, and this often resulted in high numbers of women leaving the sector. One of the few positives to come from the Covid-19 pandemic is the normalisation of remote and hybrid working, which has great power to drive the diversity agenda and the recruitment pool has suddenly become so much wider and, therefore, diverse – whether that be in terms of ethnicity, gender, social mobility or disability.

Ethnicity and race

More retailers are championing initiatives to improve the representation and experience of black colleagues. Sainsbury’s is a key name: it has joined the Black British Network and takes part in roundtable discussions with other British businesses and black colleagues to evolve and understand best practice. In addition, the John Lewis Partnership has a successful reverse-mentoring programme, in which ethnic minority staff from across John Lewis and Waitrose mentor senior leaders. It has also established a Black Partner Advisory Group to review its products in fashion, food and more to make sure they are inclusive and representative for its customers. As a result, it has added new product lines, including hosiery from Sheer Chemistry and clothing ranges with AAB and designer Kemi Telford.

Publishing an ethnicity pay gap is also an effective way of proving that any business is serious about improving its ethnic diversity and inclusion.

Former offenders

Progressive retailers are also harnessing the benefits of employing former offenders. Marks & Spencer, Timpson, Boots and Sainsbury’s are all household names that recognise ex-offenders as loyal and committed workers who also boost the business’ social credentials. Indeed, Clipper Logistics, which stores and packs clothes and accessories for online and high street retailers and processes their returns, is addressing the labour shortage in the sector by recruiting hundreds of former offenders.

Looking to the future

As the sector recovers from the challenges of the previous couple of years, there are many diversity and inclusion initiatives to celebrate. Most retailers see the immense value of such initiatives and many, for the first time, are genuinely engaging with the diversity and inclusion agenda, and making great strides. For those retailers that are slow off the mark, they must gain ground swiftly to avoid being left too far behind. Policies such as those listed above are both attainable and powerful. Businesses including Asos, Sainsbury’s and the John Lewis Partnership have already proved this, so who will follow suit in 2022?

This article was first published in Drapers and can be read online here.