Many UK businesses track diversity, equity, and inclusion (DEI) through reports, but how many actually turn those numbers into real change? The UK has seen a surge in DEI commitments with initiatives like the FTSE Women Leaders Review and ethnicity pay gap reporting discussions. The UK government has shown intent to implement such reporting. (The Ethnicity Pay Gap Summit 2025 was organised this February, aiming to prepare organisations for upcoming requirements.)
However, despite these commitments, reports indicate a slowdown in achieving ethnic diversity within boardrooms, with only 4% of new directors appointed by April 2024 coming from ethnic minority backgrounds, a significant decline from 15% the previous year.
Reporting alone doesn’t make a workplace more inclusive. To create real impact, companies must move beyond compliance and take meaningful action.
Why DEI reports alone aren’t enough
Collecting DEI data is the foundational first step in the right direction, but it’s just that—a step. Many businesses fall into the trap of thinking that tracking workforce demographics, pay gap reports, or hiring statistics—is equivalent to making meaningful progress. But reports alone won’t make employees feel heard and included.
A DEI or engagement report can show where a company stands, but what matters is what happens next.
The gap between reporting and action
So, what’s stopping UK businesses from turning DEI insights into action? Here are some common barriers:
- Lack of leadership commitment: If senior management doesn’t actively push for change, DEI efforts lose momentum.
- Focus on short-term wins: Many companies want quick results, but true inclusivity takes time and ongoing effort.
- No clear accountability: Without clear goals and responsibilities, DEI efforts remain just words on paper.
- Fear of getting it wrong: Some businesses avoid taking action because they’re afraid of making mistakes. But doing nothing is worse than trying and learning from the process.
Several UK businesses have faced backlash for not following through on their DEI commitments. For example, companies that pledged racial diversity improvements after 2020’s social movements saw criticism when reports later showed little change.
People and culture analytics for workplace transformation
So, how can companies make sure no one reads another DEI report, sighs, and thinks, Well, nothing’s going to change anyway. It starts with using DEI data effectively.
Data is just a mirror—it reflects what’s already happening, but it doesn’t fix anything. If your workplace culture is broken, if employees feel overlooked, if promotions mysteriously bypass the same group of people every year, a report won’t change that. Action will.
People analytics tools help businesses analyse workplace culture and employee experiences, identify specific problem areas and come up with solutions accordingly. For example:
- Tracking employee engagement and retention can highlight whether diverse talent feels included.
- Monitoring promotion rates across different demographics can reveal hidden biases.
- Using anonymous surveys can give employees a safe space to share concerns.
Data in real-time lets businesses adjust their strategies proactively, rather than waiting for annual reports.
From annual reports to continuous engagement
Annual DEI reports are outdated. By the time results are reviewed, a year’s worth of opportunities for improvement have passed. Instead, companies should adopt real-time tracking and ongoing engagement through regular check-ins, employee feedback, and updated action plans.
Diversio offers DEI reporting solutions that provide companies with continuous insights to measure and improve their diversity efforts beyond just an annual review.
Key strategies for UK businesses to implement meaningful culture change
Beyond tracking numbers, companies need clear strategies to transform DEI goals into lasting change into lasting change through equitable hiring and long-term commitments. Here’s how:
Leadership should be accountable for DEI Progress
If DEI isn’t a leadership priority, it won’t be a company priority. Too often, executives sign off on diversity reports but don’t see themselves as responsible for change. Real accountability matters—measurable expectations tied to leadership performance.
Here’s what that looks like:
- Set clear DEI targets—but make them meaningful. Quotas alone don’t build inclusive workplaces. Leaders should be responsible for outcomes that go beyond hiring, like retention, promotion equity, and employee sentiment.
- Tie DEI to performance reviews and bonuses. If financial targets influence leadership behaviour, so should inclusion. If an executive’s team consistently lacks diversity or struggles with retention, that should have the same weight as missing a revenue goal.
- Train leaders to actually lead inclusively. Most executives don’t set out to exclude people—but many don’t realise when they’re doing it. Leadership programmes should go beyond surface-level bias training and focus on skills like inclusive decision-making, equitable mentorship, and recognising systemic barriers.
Stop treating DEI like a box to tick
Some companies treat DEI reporting like filing taxes—something they do because they have to, not because they believe in it. If DEI is just a compliance exercise, it’s already failing. Businesses that take it seriously do things differently:
- Use DEI data to make real decisions. A diversity report should be a tool, not a trophy. The best companies use it to fix hiring biases, track who actually gets promoted, and reshape workplace policies that don’t serve all employees.
- Turn insights into action. If the data shows a pay gap, what’s the plan to close it? If engagement surveys reveal that employees from certain backgrounds feel less included, what’s being done to change that? Reports without action are just paperwork.
- Think long-term, not just PR. Some businesses launch flashy diversity initiatives, then quietly move on when the headlines fade. Real DEI work takes time, consistency, and leadership that sees it as part of business strategy—not a temporary campaign.
Address ethnicity and socio-economic barriers in hiring
Bias in hiring is still a major issue in the UK. Candidates from ethnic minority and lower socio-economic backgrounds still face systemic barriers, from unpaid internships that shut out working-class talent to ‘culture fit’ assessments that reinforce exclusion.
To build a hiring process that actually works for everyone, businesses should:
- Implement blind recruitment—but don’t stop there. Removing names from CVs can reduce bias, but it won’t fix structural barriers. Companies also need to rethink where they recruit, how they assess candidates, and who’s making hiring decisions.
- Make pay equity non-negotiable. The UK’s ethnicity pay gap remains largely unaddressed. Businesses should set transparent salary bands, conduct regular audits, and ensure that pay equity isn’t just a goal—it’s a requirement.
- Set representation targets—and track what happens after hiring. Diversity targets matter, but they’re not enough if diverse talent stagnates in junior roles. Companies need to measure who gets promoted, who gets stretch opportunities, and who quietly leaves after hitting a glass ceiling.
Read more about this issue: Equitable Hiring in the UK: What Works & What Doesn’t
Building a culture of inclusion, not just compliance
True diversity isn’t just about hiring a diverse team—it’s about making sure every employee feels valued and heard. Companies can foster inclusion by:
- Offering regular training on inclusive leadership, allyship, DEI fundamentals or data analysis to educate managers and employees.
- Creating safe spaces for underrepresented groups to voice concerns.
- Encouraging mentorship programmes to support diverse talent.
Tackle pay gaps with transparent progression pathways
Pay and promotions should follow clear rules, not gut feelings or backroom decisions. Unequal pay doesn’t happen in isolation; it’s the result of systemic barriers in hiring, promotions, and career development. Salary bands need to be public, promotion criteria should be documented, and pay reviews should be routine.
Here’s what works:
- Publish salary bands. Employees should know what their role pays and what it takes to reach the next level. No guessing, no secrecy.
- Audit pay regularly. Track disparities across gender and ethnicity, then fix them. Don’t wait for someone to ask.
- Make promotions structured. Set clear criteria, communicate them, and apply them consistently. Career growth should be predictable, not political.
Publicly commit to inclusion progress—and back it up
In today’s climate, DEI commitments are under more scrutiny than ever. Some companies are scaling back, afraid of backlash. Others are making big promises with little follow-through. But businesses that take inclusion seriously know that progress—real, measurable progress—requires transparency.
What that looks like in practice:
- Join industry-wide initiatives, but don’t stop at signing up. The FTSE Women Leaders Review and Race at Work Charter set important benchmarks, but they only matter if companies track outcomes: who’s getting hired, who’s moving up, and where gaps still exist.
- Report progress with context, not just numbers. Many businesses publish reports, but few make them accessible and meaningful. The best companies share both wins and setbacks, making it clear what’s working, what isn’t, and what they’re doing next.
- Push for systemic change, even when it’s uncomfortable. Inclusion doesn’t stop at company walls. Companies that lead on DEI actively share best practices, advocate for policy changes, and challenge outdated norms in their sectors.
The biggest DEI challenges for UK businesses today
Even with the best intentions, many UK companies struggle to make DEI work in a way that leads to real change. The pressure to demonstrate progress, whether from investors, employees, or regulators—is growing. Yet, meaningful transformation often stalls due to these key challenges:
- Lack of leadership buy-in: Many businesses still treat DEI as an HR initiative rather than a strategic business priority. Without C-suite accountability, DEI efforts lack long-term traction and risk becoming performative. This is especially true in the UK, where public commitments—like those made after the 2020 racial justice movements—have led to scrutiny when real progress is lacking.
- Retention struggles: Diversity in hiring has improved, but that doesn’t mean workplaces are actually inclusive. Bringing in talent from different backgrounds is one thing—making sure they stay, grow, and thrive is another. Too often, employees from underrepresented groups face invisible barriers: being passed over for promotions, feeling excluded from decision-making, or dealing with workplace cultures that weren’t built with them in mind. If companies don’t address this, diverse hires will walk right back out the door.
- Ineffective tracking and action: Many companies rely on outdated, compliance-driven reporting instead of real-time insights. A gender pay gap report might show disparities, but without deeper analytics, companies won’t understand why those gaps exist—or how to close them. The same applies to workplace sentiment; if businesses don’t regularly measure employee experience, they risk acting too late.
- Fear of backlash and ‘DEI fatigue’: With pushback against DEI efforts growing in some sectors, some UK businesses are hesitant to take bold action. At the same time, employees—especially those in underrepresented groups—are frustrated by empty promises. Companies that fail to act risk damaging their reputation, both internally and externally.
Read more on how Diversio helps UK businesses tackle these challenges: An Overview of Diversio for Organizations in the UK & EU
Solving DEI challenges with Diversio’s data-driven approach
At Diversio, we understand that real culture change requires action, not just reports. Our Culture & People Analytics and DEI Reporting solutions help UK businesses:
- Analyse workforce diversity and engagement with real-time insights.
- Identify areas for improvement with data-driven recommendations.
- Track progress to ensure long-term, meaningful change.
Workplace culture is built in everyday decisions; who gets hired, who gets promoted, whose ideas are taken seriously. A report can show where the problems are, but it won’t fix them. That takes leaders who back up commitments with action, companies that track progress and adjust in real-time, and workplaces where inclusion is measured by experience, not just data.
Because at the end of the day, numbers don’t change workplaces—actions do.
