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More transparency on employee satisfaction and human rights needed | Workforce Disclosure Initiative

INSIGHT by ShareAction

on 2023-04-04

human rights

For the sixth consecutive year, ShareAction’s survey of the world’s leading companies has revealed the trends of how these companies respond to the needs their workforces and supply chains.

The Workforce Data Initiative (WDI) is one of the most comprehensive and respected data sets globally. This year’s report received responses from over 160 companies. Among the key finding from this year’s report include:

Many companies are failing to set out how they are creating satisfying and rewarding jobs which is having an impact of staff retention;

Half of companies failed to provide data on the gender ratio of training – a simple benchmark of the adequacy of equal opportunity for the workforce;

Companies are still not paying enough attention to human rights, with many industries failing to collect enough data. This includes less than two thirds of those respondents from the financial sector which compare suppliers’ human rights standards against their own;

While there remain concerning gaps in reporting, WDI respondents are leading the way on supply chain polices;

Companies from emerging markets are leading the way in critical areas of disclosure, despite being considered more risky;

There is a continued lack of sufficient data on how more vulnerable marginalised groups are represented and treated in the workforce;

During the height of the global cost of living crisis companies are still not collating the data to address this issue for workers.

Commenting on the report findings, Rosie Mackenzie, Senior Company Engagement Manager at ShareAction said:

“We are immensely grateful to all those companies, which took part in this year’s survey. The information they provide enables us to see where companies are making real and tangible progress and the areas where they need to improve.

The test now for these companies will be not to just read this report but act on the findings. Those that do will find they have a better and more productive workforce. They will discover supporting human rights will deliver life changing opportunities for millions of people worldwide. Taking these steps will help a more sustainable and fairer world for both people and planet.

One area of disappointment in the reporting this year was the small fall in the number respondents from the previous year. More positively, those that respond provided more data than ever, it’s clear who is genuinely committed to robust reporting and transparency, and who is likely to face regulatory risks for dragging their heels on providing minimum levels of workforce data.”

Key findings from the report

Companies are failing to explain how they are creating rewarding and satisfying jobs, despite this being crucial to staff retention:

At a strategic level most companies recognise the value of training with 98%, while 88% of companies how they identified and addressed training gaps and skill shortages.

However, this was not reflected in the quantitative data companies provided. Half of respondents provided no information on the training they offered to women. The IT sector performed the worst with only a third of respondents identify able to provide information.

90% of companies have wellbeing programmes. And almost every respondent (99%) gave an example of how they had improved workers wellbeing.

For many employees, how your company deals with mental health and wellbeing is a key staff retention. There was really positive news from our survey. 90% of companies have wellbeing programmes. And almost every respondent (99%) gave an example of how they had improved workers wellbeing.

It was disappointing to see that at a leadership level mental health and wellbeing was not embedded, with just over a third of respondents didn’t have board level oversight of mental health. Sadly 40% of companies who responded to the survey still don’t report on sick days due to mental health.

Marginalised Workers

Marginalised workers are groups that experience discrimination and exclusion, limiting their ability to fully participate in economic and social life. Many groups of workers experience marginalisation at work, being relegated to powerless positions and subjected to unfavourable treatment. Contingent workers, for example, can’t access the benefits and protections of their more securely employed counterparts, even when performing identical roles. Women and workers from ethnic minorities continue to face discrimination and harassment

It’s impossible to identify where these harms are occurring, let alone start to address them, without first gathering sufficient data on how more vulnerable groups are represented and treated in the workforce.

Only 50 per cent of responders provided some information on the number of discrimination and harassment incidents raised or resolved. Without tracking the number and outcome of these incidents, it’s impossible for organisations to know how widespread harmful behaviour is and whether it’s being tackled effectively.

Only 50 per cent of responders provided some information on the number of discrimination and harassment incidents raised or resolved.

Our survey has identified that non-permanent employees, in particular, can’t access equal treatment with their permanently employed counterparts. At one in five companies, grievance mechanisms weren’t accessible to companies’ non-employee direct operations workers. Differences in treatment on the basis of identity were also clear.

For example, on average, male workers received more training hours than female workers and had higher internal hire rates. While 141 companies stated that permanent employees are covered by measures to ensure that workers who are unwell take sick leave, and other necessary leave, and are protected economically if they need to do so, this drops to 32 companies for contractors and agency workers and 26 for third-party on-site workers, such as subcontracted service workers and third-party contract workers.

Costs have risen for workers in many countries around the world but companies lack the data needed to respond to this.

The Russian invasion of Ukraine has had worldwide economic ripple effects, pushing millions more people into poverty. Everyday goods and services are getting more expensive, making life more difficult for workers. With worker dissatisfaction growing, it’s essential that companies understand how pay is manifesting across their organisation and have the mechanisms to facilitate meaningful engagement and dialogue with their workforce.

58 per cent of companies didn’t provide any data on the percentage of employees whose basic salary is equal to the legal minimum wage.

58 per cent of companies didn’t provide any data on the percentage of employees whose basic salary is equal to the legal minimum wage. 47 per cent of companies didn’t provide any information on the proportion of women in the bottom pay quartile. 43 per cent didn’t explain how the company is working to improve wage levels for non-employee direct operations workers.

There have been some positive developments, though. 2022 saw a rapid increase in disclosure on the ethnicity pay gap. 54 per cent of companies provided this data, more than 13 times the proportion of companies that provided it just two years ago. This makes ethnicity pay gap reporting almost as widely reported in the WDI as the gender pay gap (which 59 per cent of companies provided).

Even when it’s legally mandated, some companies are still failing to gather or disclose crucial information on pay. For example, not all UK responders provided information on the CEO to median worker pay ratio (which 92 per cent of UK companies provided) or the gender pay gap which 89 per cent provided, despite legislation requiring these are calculated and reported.

All opinions expressed are those of the author and/or quoted sources. investESG.eu is an independent and neutral platform dedicated to generating debate around ESG investing topics.

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