Measuring and monitoring for diversity and inclusion in your small business

Apr 19, 2021 | Business Principles

Measuring and monitoring data sounds like an administrative burden. And it is, to an extent. But when it comes to diversity and inclusion, it’s really important, for a number of reasons.

First it will help you comply with legal obligations not to discriminate against protected groups, and to prevent and defend tribunal claims. It will also help you identify where there is an issue with diversity and inclusion, so that you can target action effectively, rather than guessing what the best initiatives would be.

Measuring and monitoring will tell you whether something you are doing to address a problem is actually working, and allow you to adjust it if it isn’t, or if it is having an unforeseen negative impact on a different group.

Here are five things you should consider when collecting data on diversity and inclusion.

What data to collect?

Your starting point when deciding what data to collect is the Equality Act 2010. There are nine protected characteristics – age, disability, gender reassignment, marriage/civil partnership, pregnancy/maternity, race, religion or protected belief, sex, and sexual orientation. Monitoring on the basis of those is usually best. The impact of complying with legal obligations, preventing and defending claims will be lost or damaged if you change them.

Sometimes adding to them might be sensible, and this may depend on your organisation, location and sector. You could consider monitoring by education level achieved, where people are from in the country, or other characteristics, if you feel this would be relevant for your business, or if you sense that there is a particular problem.

In terms of the protected characteristics, recording some of them is not straightforward. When it comes to race, for example, you can have a brief list or a very long list of pages of different options. The size of your organisation might make a difference here as to the quality and relevance of your data, and in most small businesses, keeping the race options fairly broad and limited in number might be best, or even self-describing.

When to collect it

The most obvious answer in terms of when to collect it is on recruitment. But that doesn’t mean you should only measure recruitment. You can also measure the diversity of promotion decisions, resignations, pay and other factors by protected characteristics. A problem with diversity isn’t just about not recruiting a diverse range of employees, but on the experience they have when they get into your business.

Encouraging people to share data

Sometimes people may be reluctant to share data. For example many withhold the fact that they have a disability, or decline to share their sexual orientation, for fear there will be discrimination or harassment. Being very transparent about why you are seeking the information, and having a clear commitment to diversity and inclusion will help reduce fears and encourage people to share the data that will actually help them, rather than hinder them.

Remember data protection concerns but don’t let them stop you

The impact of the General Data Protection Regulation (GDPR) has been, in some cases, that employers, particularly small ones, are reluctant to collect data at all, particularly this type of data. In fact there is no reason you cannot collect data on your employees’ protected characteristics.

Information about protected characteristics will usually be classed as ‘special category personal data’. But that doesn’t mean you can’t collect it, it just means there are extra protections involved. You need a justifiable basis for collecting it, which is easily addressed as compliance with legal obligations, or legitimate interest. For special category data you also need to meet one of a list of specific conditions. This is a long list, but the easiest way to achieve the requirement is by seeking the employees’ consent for this type of data.

Once you’ve identified your legal basis for collecting the data and checked that you are seeking consent when collecting it, you need to ensure your employee/job applicant privacy notices reflect that.

What to do with the data

The most important thing to do with data you are collecting is to listen to it and pay attention. If employees are giving you details of their protected characteristics and there is a problem with diversity or inclusion which should ‘show up’ in the measuring, and nothing is done, that will undermine trust.

Use the data to inform changes in your business, and to develop ideas about initiatives that will improve things, and then to ensure those changes are effective.


If you need further advice on what you consider when collecting data on diversity and inclusion, do get in touch.