Executive Summary

This first-of-its-kind report from The MBS Group, WiHTL and PwC finds that Covid-19 will have a long-term impact on diversity and inclusion in the hospitality, travel and leisure (HTL) sector. Based on conversations with over 60 of the sector’s leading businesses, as well as a survey of 1,500 HTL employees, our research shows that women and those from ethnic minority backgrounds are more likely to have been negatively impacted by Covid-19 than their male and/or white counterparts – and that immediate action must be taken to guard against further unintended negative consequences.

Over the last few years, the HTL sector has made real strides on diversity and inclusion, increasing female and ethnic minority representation across all senior leadership levels and entry-level positions.

PROGRESS 2018-2019

Level

Board % women

28.9% (up 5.3%) % BAME

6.4% (up 4.6%)

Executive Committee 27.2% (up 1.8%) 3.4% (up 1.4%)

Direct Reports 37.7% (up 1.7%) 4.8% (up 1.1%)

Source: From Intention to Action: Diversity in Hospitality, Travel & Leisure, The 2020 WiHTL Annual Report

However, this report shows that Covid-19 may have reversed some of this progress, and that many senior women and those from ethnic minority backgrounds have been impacted more by Covid-19 responses in HTL than their male and/or white counterparts.

Significantly, we find that whilst many leaders in the sector have a good understanding of the risks to their D&I agenda, most leaders have not taken tangible action to mitigate the impact. 77% of businesses reported that D&I has remained a priority or become a higher priority since Covid-19. However:

Only 15% of businesses reported that D&I has been raised at board meetings since the outset of the crisis;

PwC research found that a higher proportion of women have been furloughed, put on reduced hours or made redundant (65%) than men (56%)

PwC research found that 67% of those from ethnic minorities have been furloughed, put on reduced hours or made redundant, compared to 62% of white colleagues

Only 15% of businesses interviewed have measured the impact of temporary action (such as furlough) on female or ethnic minority employees, and only 6% have measured the impact of redundancies, or potential redundancies.

The risk to employee health, the emergence of flexible/home working, and the increased profile of HRDs around the decision-making during this period has heightened leaders’ awareness of the issues associated with diversity and inclusion. Indeed, 44% of businesses reported that D&I has been a higher priority for their business since

the outset of Covid-19, with 33% of businesses saying it has remained as important as pre-Covid. However, despite this heightened awareness of the D&I agenda, our research found little evidence of specific policy or interventions around D&I during this period.

‘What gets measured, gets done’ has been a central message of all our previous reports on D&I in the HTL sector. Worryingly, however, one issue that underpins our findings once again is the lack of meaningful data. Across the sector, businesses have not measured – or do not have the data required to measure – the impact of their people policies, such as furloughing and redundancy programmes, on women and those from ethnic minorities. As a result, very few companies know the exact impact that Covid-19 has had on diversity in their business. While HTL leaders are not deliberately taking actions that impact negatively on gender and racial diversity, without measuring the impact, it is impossible to know, and indeed, address. Looking ahead, the lack of accurate and timely data will act as a key blocker to long-term progress on diversity and inclusion in the HTL sector.

Additionally, existing imbalances and discrepancies that exist in the HTL businesses have been exacerbated by Covid-19. For instance, certain functions, such as finance – that have been considered ‘business critical’ (and therefore, fewer employees made redundant or furloughed) — are traditionally dominated by male leaders. Similarly, more women have accepted voluntary redundancy packages than men due to caring responsibilities, or because they believe their roles (such as marketing, HR or legal) will be more easily transferrable to other sectors less impacted by Covid-19.

Our report indicates that Covid-19 will likely have a long-term impact on diversity in the sector. Firstly, restructures and voluntary redundancy schemes have decreased the number of visible female and ethnic minority role models in the sector, which are long understood to play a key role in motivating diverse employees to progress and encouraging diverse candidates to enter the industry. Secondly, cost-cutting measures have meant that many of the incredible initiatives designed to champion diversity and increase representation have been paused or had their budgets cut. D&I budgets in many businesses have been cut completely, and D&I professionals furloughed and/ or made redundant. Additionally, at graduate/ entry level, as the HTL sector has been one of the hardest hit by Covid-19, the most high potential diverse talent may well choose to look to less high-risk sectors in the future.

However, despite these backwards steps there are shoots of hope. Covid-19 has shown businesses that flexible and remote working policies can be highly effective. As the lack of flexible working policies has historically been a barrier to progression for women, this development could wave in a new era for those with responsibilities such as childcare.

Moreover, Covid-19’s disproportionate impact on those from minority ethnic communities – combined with the Black Lives Matter movement – has increased the awareness of issues such as systemic racism and ethnic minority representation.

This report also measures how women and employees from ethnic minority backgrounds feel about the last six months. Notably, 71% of employees in the sector have felt supported by their employer during Covid-19. Worryingly, however, fewer women and employees from ethnic minorities share this view.

This report also highlights what leaders can do to increase their focus on D&I. Most notably, leaders should make an intentional effort to understand the impact of Covid-19 on diversity in their business. Once identified, strategies can be put in place to avoid or mitigate any negative effects of the pandemic, such as a decline in gender and ethnic minority representation or a sudden lack of role models. In making an intentional and concerted effort to factor D&I into current and future decision-making around Covid-19, companies will avoid being outrun by more forward-thinking competitors as we move into the next chapter of this pandemic.