Tackling diversity in the hospitality, travel and leisure sectors (Part I)

Women in Hospitality, Travel & Leisure (HTL) 2020 Review 2019 Edition

Companies across all consumer sectors are grappling with the challenge of increasing diversity in their workforces. While targets like that set in the Hampton-Alexander Review – 33% female Boards and senior leadership teams – have been driving progress in listed businesses, the introduction of mandatory gender pay gap reporting in 2018 has helped push gender diversity up the agenda for some of those companies who’ve traditionally been out of the spotlight.

At The MBS Group, we’ve been championing diversity for over thirty years, so were delighted to be asked to support the Women in Hospitality 2020 (WiH2020) initiative, in partnership with PwC. Founded and chaired by Tea Colaianni – the inspirational and passionate former Group HR Director of Merlin Entertainments – WiH2020’s mission is to help the sector meet the 33% target through research, by providing a platform for collaboration and securing commitment from industry leaders to drive action.

The Women in Hospitality 2020 (WiH2020) initiative is chaired by Tea Colaianni

Last week, we had the pleasure of launching the 2019 Edition of the Women in Hospitality, Travel & Leisure (HTL) 2020 Review – exploring how the sector is currently performing against the target and some of the exciting initiatives that are being trialled and implemented to build momentum.

So how is the HTL sector performing? Positively, our research shows that in many ways it is making great strides:

– For the first time, there are no all-male Boards across HTL businesses in the FTSE 350
– Nearly two-thirds of FTSE 100 companies in the sector already have 33% or more women on their Boards
– Throughout 2018, around 60 women were promoted or appointed into senior roles across the sector, across a broad range of functions, meaning there are now more female role models than ever
– 39% of FTSE 350 HTL NEDs are female – which could present a very solid pipeline of NED talent to the critical chair role

Less positively, our research also highlights a number of key areas that require significant improvement:

– There is a severe lack of women in the key leadership roles of CEO, Chair and CFO; some 87% of companies in our sector have all male teams across these 3 critical roles
– Across the FTSE 350 businesses in the sector, just 7% of CEOs are women, while outside the FTSE 350 it’s only marginally better at 11%. These numbers are also extremely vulnerable to change – and this number is extremely vulnerable to change. For instance, when Kate Swann steps down as Group CEO of SSP later this year, assuming all else remains the same, the percentage of FTSE female CEOs in our sector will drop from 7% to 3.8%
– There are no female HTL Chairs in the FTSE 350, and just 6.8% of Chairs are women outside of it

Looking at the headline figures across the sector as a whole, we find the most encouraging progress has been made at the Direct Reports (into the Executive Committee) level. Here, the percentage of women is 36% – already above the target, and suggesting a significant pipeline of female talent ready to be promoted in the near future. Just 23.6% of Board members and 25.4% of ExCo members are women, suggesting there will need to be a step change if the industry as a whole is to meet the 33% target by the end of 2020.

However, while the headline figures provide a useful benchmark, when you look beneath the surface it is clear that there is a widening gap between those companies who are performing well and those that aren’t. Through conversations with the CEOs, Chairs or HR Directors of over 100 companies, it was clear to us that there are still some companies for whom gender diversity still isn’t a serious item on the agenda.

For the first time in this report, we also extended our focus beyond gender diversity to look at ethnic diversity. Against an average of 1 in 8 people across the working age population in Britain, we found just 1 in 33 leaders in the HTL sector are from a BAME background. At Board level, ethnic diversity is even lower at just 1.8%. With the government looking at the possibility of implementing ethnicity pay gap reporting (consultation on the plans closed a couple weeks ago), we may soon see even more pressure on companies to improve ethnic diversity in the mid-term.

Though there clearly remains a great deal of work to do, through our conversations we have been buoyed by a groundswell of progress in a number of areas. In particular, we were encouraged by a wide range of initiatives companies are implementing to address the shortage of women in operational roles – a critical function in the sector.

The HTL sector can rightly be proud of the genuine progress it has made to date. But now is not a time to get complacent. Diversity is a business-critical issue and should be treated as such with targets, monitoring and accountability driven by sponsorship and leadership at the most senior level.

I hope you will find the report, which you can download here, illuminating – whether you are in the HTL sector or taking an outside view – and would very much welcome your feedback.

Elliott@thembsgroup.co.uk | @TheMBSGroup