Reflecting on Retail Week’s publication of the Retail 100 ranking of the country’s most influential leaders, Korn Ferry managing director Sarah Lim asks: why is there still such a lack of diversity in senior retail leadership roles?
The retail industry is still lagging behind other sectors when it comes to its response to tackling diversity and inclusion.
This is despite research that shows companies in the top quartile for racial and gender diversity enjoy 70% more growth, 36% better profitability and 19% higher innovation than their respective industry counterparts (Korn Ferry DE&I Maturity Model, 2021).
Around 3 million people work in retail in the UK, which equates to approximately 10% of the total UK workforce. It is the largest private-sector employer and, while Office for National Statistics data shows the UK retail industry has the second greatest number of non-white workers after health and social work, most are concentrated at shopfloor level.
In the newly published Retail Week Retail 100, there are only 12 ethnic-minority leaders listed.
Of these, nine of the 12 are founder-led and one is Rishi Sunak, chancellor of the exchequer, leaving only two who have effectively ‘worked their way to the top’.
Promoting inclusivity was a key theme at the Be Inspired virtual conference on June 8, 2021. Watch the sessions for free on-demand here to see how you can enact real change.
Beyond ethnicity and focusing on gender, the Retail 100 shows that the number of female retail leaders dropped from 23 to 20 this year.
How can this be possible in a world where most women control the household budget, and influence approximately 80% of all consumer spending?
So, what’s the issue and what can we do about it?
There isn’t one answer to why, 10 years on, we are still debating why there is a lack of diversity in senior retail leadership roles.
“The UK retail industry has the second greatest number of non-white workers, yet most are at shopfloor level”
The issue has generally not been one of attraction at shopfloor level, where historically the industry has attracted healthy percentages of women and non-white workers, although clearly bias – be this conscious or unconscious – still exists.
More so is the problem of attrition as you go up the ranks, with smaller and smaller numbers of women and non-white senior managers being promoted into senior leadership roles.
Another issue is that these leaders do not remain in post for any considerable time post-appointment. Often this is as a result of either finding the pressure of balancing increasing work demands with family commitments untenable or an overheated job market where female or ethnically diverse leaders are continually poached by other companies.
Diverse boards do more than tick the governance box. They provide strategic input and role-modeling to company culture.
They also ensure that the expectations of a wide range of stakeholder, consumer and shareholder interests are baked into the company strategy.
“Leaders must think much more laterally about where people come from, rather than recruiting in the same old mould”
Critically, too, let’s not forget that the role of the senior independent director (SID) is to recruit the chair and, in turn, the role of the chair is to manage CEO succession.
Without more women or non-white board directors in the key roles of SID and chair (and on the main board more widely), it will take many more years to effect the required changes in the make-up of the retail CEO community and c-suite.
If you do what you’ve always done, you’ll get what you’ve always got
A c-suite of directors that is widely diverse provides great role-modeling for the wider organisation, and yet often conscious or unconscious bias leads to a preference for ‘recruiting people like me.’
Too often, companies rely on what’s worked/not worked here before. Leaders are also often unwilling to take a risk on someone without the proven experience, even if they have the inherent smarts, learning agility and potential to make the step up.
Retail as an industry will not move the needle on this issue unless leaders are prepared to take a gamble and appoint the ‘step-up’ candidate or think much more laterally about where people come from, rather than recruiting in the same old mould.
Creating the place to be
In the past 12 months, many leaders have been surprised by the effectiveness of remote working – at least for some roles, some of the time – and are now developing hybrid models for blended working.
“Now is the time to say goodbye to future recruitment approaches that continue to recruit PLUs (people like us)”
Coming out of the most difficult year in retail’s history, we have the opportunity to rip up the rulebook.
We can adapt new hybrid ways of working that reflect some of the great things we have learned in the last year. We can step-change the cultures of our organisations to embrace inclusivity and greater difference.
Now is the time to say goodbye to future recruitment approaches that continue to recruit PLUs (people like us) and to create workplaces that attract the best talent without the constraints of old mindsets and old ways of working.
Korn Ferry is a data partner of Retail Week Be Inspired and the new Retail Week report Diversity DNA, produced in association with Workday. Download the report here to explore more on how to embed D&I into the very core of your business.