Hong Kong firms prioritise “speak-up” cultures as D&I initiatives flounder
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Hong Kong
Shani Alexander
Shani Alexander, Senior reporter

Despite organisations’ efforts, progress on creating diverse and inclusive (D&I) workplaces has been frustratingly slow in Hong Kong where local laws and cultural variances, underreporting, and the absence of evidence-based approaches are hindering companies’ endeavours, a new survey has found.

The findings appear in Baker McKenzie’s Insights from Global Employment Leaders research, which surveyed 900 employment leaders in global organisations in Hong Kong, Singapore, Australia, US, Canada, UK, Germany, France, Spain, Netherlands and Brazil.

The study revealed that creating a “speak up” culture is the highest priority for 80% of Hong Kong employment leaders. However, this focus will move to “increasing the diversity of the leadership team” within the next two years.

According to Baker McKenzie’s analysis, this is not surprising as regulators are taking an increasing interest in the representation of women on boards.

A recent proposal from the Hong Kong Stock Exchange would require public listed firms to have at least one woman on their board. The exchange is also seeking mandatory disclosure on companies’ D&I progress.

However, the Baler McKenzie study found almost two-thirds of employers (65%) said their insolvency and restructuring, HR, legal, and compliance teams have different views on the most pressing D&I issues. This poses an ongoing challenge for companies to ensure that their D&I policies evolve in the right way.

D&I challenges

Organisations operating across multiple jurisdictions often find managing local laws and cultural differences difficult and can be unsure of what nuances to consider when implementing D&I programmes, according to the firm’s research.

Around 90% of Hong Kong respondents said different legal requirements across jurisdictions make it difficult to implement company policies consistently, while 87% said the same about varying cultural expectations.

As a result, 60% of respondents said designing policies that comply with the law is the most challenging part of implementing new D&I policies; while 90% said their organisations demand action that goes beyond what is legally mandated, despite 45% saying the law is not keeping pace with D&I issues.

Some 80% of respondents said they would make faster progress if they were to integrate D&I into compensation and performance reviews.

“Diversity leaders must be mindful of cultural differences when establishing global training priorities, offering appropriate training where it is relevant,” said Jonathan Isaacs, head of Baker McKenzie's China employment practice.

“Programmes that are designed at a global level with little consideration for local nuance and specific diversity pain points are rarely well received on the ground.”

Underreporting persists

Despite the growth in D&I programmes worldwide, 34% of respondents believe that D&I issues are underreported, further hampering initiatives’ effectiveness.

The issue of underreporting is most pertinent in Hong Kong, with 97% of respondents saying their managers often attempt to contain D&I-related complaints. This has led to more than half (52%) of respondents believing discrimination, harassment, and D&I-related issues are underreported, significantly higher than respondents in Australia (43%), Singapore (38%), UK (37%), and the US (33%).

“Underreporting is likely to stem from conflict avoidance among managers rather than a lack of reporting infrastructure at the organisational level,” said Michael Michalandos, head of Baker McKenzie's Asia-Pacific employment and compensation group.

“This is a trend we see in relation to anti-bribery and employee performance as well as D&I. Over-emphasis on friendship and keeping the peace creates compliance issues that are very difficult to manage.”

Evidence-based struggles

According to Baker McKenzie, around 75% of all respondents believe they can do more to leverage data to direct resources towards impactful D&I initiatives. However, concern about falling foul of legal restrictions on collecting and processing data on protected characteristics may explain this reluctance.

Fewer than half of respondents said their organisation uses recruitment diversity data, equal pay data, or employee feedback to measure the effectiveness of D&I policies.

Nine-in-ten respondents said they could do more to leverage data to direct resources, but 93% said they must do more to build employee trust on data sharing.

“Principles governing the collection and processing of personal information sit at the intersection of employment, data privacy, and human rights law,” said Julia Wilson, partner, employment and global lead of HR data protection at Baker McKenzie.

“For global organisations, taking an empirical approach to D&I measurement has been fraught with potential risk, cost, and complexity. However, just because data collection isn't possible everywhere doesn't mean organisations should not do so anywhere.”

Wilson continued: “By taking a country-by-country approach – gathering data appropriately where possible and handling privacy considerations in accordance with local law – organisations can begin to build a measurement infrastructure over time that will deliver valuable insights and information to support their D&I programmes.”