DEI compliance outlook 2024: businesses on notice

If 2023 wasn’t your year for seeing enough improvement on gender equity, diversity and inclusion then I guarantee you 2024 will be better with Australian businesses on notice to keep up with DEI compliance.

The past 12 months has been a challenging one with business and household spending having to be reined in due to rising interest rates – with the Reserve Bank of Australia (RBA) leaving the cash rate at 4.35% for 2023.

It was by no means surprising that businesses reported having to tighten budgets on diversity, equity and inclusion (DEI) initiatives in Australia and in many ways we continue to lag most developed countries on this front.

But 2024 is a year for getting compliant with regulatory changes underway and the best signal yet that DEI compliance will become a necessary part of doing business in a competitive world.

Here’s what happened and what to be aware of:

• Economic equality progress got real. According to our Financy Women’s Index quarterly report, progress to gender financial equality rebounded in 2023 from it’s Coronavirus slump and data distortions. In the latest September quarter report, we reported on the following improvements: gender pay gap narrowed to 13% from 13%, the number of women occupying ASX 200 board positions rose to just over 36% and the gender gap in unpaid work improved as men increased their hours in housework and care.
• Regulations affecting DEI compliance became super charged with many things for business to be aware of – among which are:
  1.  Australian Securities and Investments Commission (ASIC) has started issuing fines and has commenced a program of work examining greenwashing of financial products.
  2. Workplace Gender Equality Agency (WGEA) is putting increased pressure on companies to take action on gender equity with public disclosure of Gender Pay Gaps by reporting entities from 2024. WGEA will be publishing these gaps on 27 February 2024. Announcing the publication date is an important next step in the process of ensuring that employers have the tools and resources they need to be able to use this moment to drive progress on gender equality.
  3. Amended Respect At Work legislation is also demanding organisations take proactive measures to eliminate workplace harassment. Businesses will now have to show they are taking these proactive steps.
  4. Investors and Boards are increasing demanding that companies consider ESG factors and reporting.
  5. Amended Work Health and Safety Regulations (Effective from 1 April 2023) state that employers must adhere to a new Code of Practice on managing ‘psychosocial hazards’ has been implemented across Australia affecting all businesses. These are aimed at supporting employee wellbeing.
• Employees became more vocal and are looking for better places to work. According to a survey by Glassdoor, 80% of people under 50 years say that diversity, equity, and inclusion are very or somewhat important to them. Another survey by Benevity, called The State of Workplace DEI, found that 95% of people weigh a prospective employer’s DEI efforts when choosing between job offers with similar salary and benefits and that 78% would not consider working for a company that fails to commit significant resources to DEI initiatives.

With all of these things changing the way individuals and business think and feel about social impacts, what’s clear is that for organisations to remain competitive in a tougher economic environment, they’ve also got to prioritise DEI in the year ahead.

Financy covers gender finance, diversity, inclusion and ESG issues. We advocate for gender equity change through the Women’s Index report and help businesses take action on DEI through tech solutions like IMPACTER.