Diversity? It’s all about leadership, say hospitality chiefs
Only five CEOs and one chair in the top 150 hospitality, travel and leisure firms are female. Unconscious bias, a ‘blokey’ culture, a poor record in managing the talent pipeline and lack of confidence among women to ask for promotion are all factors in why a gap begins to emerge in gender balance from middle management upwards.
But right at the heart of the issue is leadership, according to leading names in the sector. A common weakness across the industry is lack of ownership or sponsorship of diversity strategies from the board, with the strategy, development and execution largely left to HR instead.
“Change never happens without sponsorship at the top,” says John Kelly, chairman of Ladbrokes Coral. “The worst thing you can do is delegate downwards. Leaders should be passionate about diversity because it delivers shareholder value. Boards should be fierce and challenging about diversity.”
A common weakness across the industry is lack of ownership or sponsorship of diversity strategies from the board, with the strategy, development and execution largely left to HR instead
Susan Hooper, non executive director at Rank Group and Wizzair, puts it succinctly. “The reason diversity is not there is purely about leadership. The people making decisions don’t have the passion to make change happen. There is no excuse. Leadership is holding back diversity.”
This makes no sense, says Channel 4 chairman and senior independent director at Merlin Entertainments, Charles Gurassa. Diversity is a central company issue as it is about talent, he says. Organisations that cut themselves off from talent will not perform as well as those that don’t, he says. When the broadcaster was formed 30 years ago, it established a comprehensive set of metrics in this area. “This enabled us to develop a candour around the subject, allowing us to publicly say where we haven’t succeeded. For example, what more can we do and what methods can we use to ensure the number of BAME [black, Asian and minority ethnic] people in lower quartiles is represented in upper quartiles?”
The hospitality, travel and leisure sector is ‘plagued’ by under-representation of women in senior roles, according to the Women in Hospitality, Travel and Leisure 2020 WiH 2020 Review, led by Tea Colaianni, chair of the Woman in Hospitality 2020 working group, an independent cross-industry body that includes consultancy firms PwC, Korn Ferry, People 1st and Oxford Brookes, and a member of ThePeopleSpace’s Leadership Board.
It finds firms across the sector have a ‘limited’ focus on diversity and inclusion. Few companies disclose diversity and inclusion strategies, and few disclose gender-diversity targets, sending the message that it is not a clear priority.
Research by Korn Ferry finds that women currently make up 25.5% of senior management positions in the sector, but that falls to only 20.7% when human resources roles are excluded. Travel companies and technology-led businesses were the best performers in terms of gender diversity with 29.5% and 28.1% of women in senior management roles respectively, compared to airlines with just 20.9%.
In FTSE 100 companies the percentage of women in executive committee roles is 24.95% while in FTSE 250 it rises to 31.21%.
One impact is on company reputation, says Jon Terry, partner and diversity and inclusion consulting leader at PwC. Using PwC methodology, a team of MBA students from Lancaster University analysed 26 companies from the sector to determine how their records and objectives on diversity and inclusion are likely to be perceived by employees, potential recruits, customers and other stakeholders. On average, the sector was significantly lower than other industries PwC has analysed. None of the organisations assessed are ‘leading’ in the four key dimensions of a formal diversity and inclusion (D&I) strategy, leadership and tone from the top, HR processes and other D&I initiatives. Many are at the ‘simplistic’ level.
“In such a competitive market, encouraging real change on diversity could be the differentiator that helps to attract and retain the best people and keep customers and shareholders happy,” says Terry.
“Our research shows that 80% of millennials believe an employer’s policy on diversity and inclusion is an important factor when deciding to work for the company. Diversity and inclusion strategies need to be led from the very top of organisations to inspire and attract prospective employees – this is not simply an issue for HR, it’s an important business and reputational consideration.”
Women in Hospitality 2020 calls on companies to support the progression of women into senior roles by setting themselves targets to improve diversity and to publish their progress annually.
“Given the diversity of customers and staff, ensuring that all levels of an organisation are representative is mission-critical for the continued success of the industry. There is clear and compelling evidence that creating a strong gender balance across an executive team delivers benefits by reducing stale thinking and opening up new growth opportunities. This is why we have drawn up the Diversity in Hospitality, Travel and Leisure (HTL) Charter to build accountability and transparency to create effective change in the sector,” says Colaianni.
To sign up to the Diversity in HTL Charter click here