Profitability vs ED&I: The Delicate Balance in Asos’ Executive Bonus Scheme
It has been reported that fashion retailer, Asos, has decided to abandon diversity targets in its annual executive bonus scheme, choosing to prioritise profitability instead. This decision has sparked a crucial conversation about the delicate balance between financial goals and the importance of equality, diversity and inclusion (EDI) within businesses.
Commentary by Charlotte Rees-John, Head of Consumer at law firm Irwin Mitchell.
The rationale behind Asos’ decision lies in their focus on achieving profit targets, improving share prices, and profit margins. It is undeniable that keeping a business viable and steering clear of bankruptcy is a top priority. However, it is essential to recognise that profitability and a commitment to EDI can go hand in hand. In fact, focusing on profitability and prioritising EDI can be symbiotic forces that drive long-term success.
At the core of any organisation are its people. Engaging, motivating, and nurturing the workforce leads to a highly productive and stable environment, ultimately resulting in greater profitability. By creating a culture that values diversity and inclusion, companies can tap into a wide range of perspectives and experiences, fostering innovation and driving business growth.
Amidst the discussion surrounding Asos’ decision, it is important to commend the company for their commitment to diversity in their long-term incentive scheme. By setting a target of achieving 50% female and 15% ethnic minority representation at all levels of leadership by 2030, Asos demonstrates their recognition of the value that diverse perspectives bring to the table. They understand that an inclusive and diverse workforce is essential for driving innovation and achieving sustained success.
While it is understandable that Asos has made adjustments to their bonus scheme to prioritise profitability, it is crucial to strike a balance. Businesses must ensure that diversity and inclusion remain at the forefront of their priorities. Adapting to the needs of the business is important, but not at the expense of EDI initiatives. By achieving this balance, companies can create an environment where all employees feel valued, respected, and empowered – a culture that benefits both individuals and the business as a whole.
Asos’ decision comes at a time when the world is placing an increasing emphasis on diversity and inclusion. The events of the past year have highlighted the need for organisations to address systemic inequalities and create spaces where everyone has an equal opportunity to thrive.
By nurturing a diverse workforce and fostering an inclusive culture, I believe that companies can achieve both financial success and a workplace that truly values and leverages the power of diversity.
Irwin Mitchell has a range of EDI related resources available for employers and employees. To find out more about this and other training, visit its website here.
