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Beauty companies are placing a greater focus on diversity, equity and inclusion (DE&I) with budgets and targets, but hiring has yet to catch up, according to the second report outlining the state of DE&I in the beauty industry from executive search firm The MBS Group in partnership with non-profit trade organisation Cosmetic Executive Women and creative and strategic agency Science Magic.
The report includes case studies from Glossier, Beauty Pie, Edgewell and IFF, with data based on insights from the sector’s 100 largest companies that operate in Europe and interviews with industry leaders. According to the report, 69 per cent of companies have a dedicated DE&I budget, 87 per cent of companies have a coordinated DE&I strategy (up from 75 per cent in 2021) and 62 per cent of companies have set specific targets for their strategy.
The report found that diversity has improved in terms of gender, ethnicity and LGBTQ+ inclusion, but there are opportunities to hone in on social mobility and disability, and to diversify the talent pool generally.
“Clearly and encouragingly, companies are recognising diversity as a commercial imperative and taking deliberate action to appoint leaders from underrepresented ethnic minority backgrounds into the most senior positions,” said Huw Llewellyn-Waters, partner for the consumer goods practice at The MBS Group. “However, there are still serious challenges ahead, and beauty companies must think carefully about how to bring more diversity, and more social mobility, into the wider industry.”
The majority (80 per cent) of companies gather data on the diversity of their organisation, but the biggest barriers to overcome are using HR systems and navigating EU regulation on collecting personal information. “One of the things we struggle with is data collection around things like ethnicity and social mobility,” said one beauty retail HR director in the report. “It’s all voluntary, so it’s hard to know whether to push colleagues for that information. Forty per cent of our team don’t disclose their personal information.”
Representation of women is rising, but unevenly across senior positions. At the board level, there was a 6.2 per cent increase in female representation from 38 per cent in 2021 to 44.2 per cent in 2023, and a 5.3 per cent increase at executive committee level from 35.1 per cent to 40.4 per cent. While women make up a relatively high proportion of senior leadership roles in beauty, the report highlights that the most important decision-making positions are still male-dominated. In the top 20 beauty groups in Europe, three have a woman as chair of the company, three have a female CEO and four have a female CFO.
To improve inclusion for women, the report suggests companies use specific initiatives to encourage women into tech roles, update their fertility and parental leave policies and consider menopause policies within their DE&I activity to support and educate colleagues.
The proportion of leaders from ethnic minority (also known as the global majority) backgrounds on beauty boards and executive committees has increased, from 9 per cent in 2021 to 16 per cent in 2023 at board level and from 7 per cent to 15.2 per cent at executive committee level. The organisations suggest companies should create accelerator programmes for candidates from ethnically diverse backgrounds, partner with organisations that support diverse young talent, and create pipelines for creative talent (where there is typically more ethnic diversity) to move to corporate roles.
“Today, industry leaders recognise that not embracing ethnic diversity in their business risks missing out on talent, creativity and revenue,” said Julietta Dexter, founder of Science Magic. “Across the sector, there are many instances of accelerator programmes for Black-owned brands, and specific investment in product R&D to bring new shades or formulations to market.”
The report stresses that the beauty industry has a high level of inclusion for the LGBTQ+ community, particularly in colour cosmetics. According to leaders who were included in the report, LGBTQ+ employee resource groups are often the furthest developed. In addition, over the past two years, many companies have implemented policies related to trans and non-binary inclusion, including training for managers and education for teams about allyship.
Beauty is particularly well positioned to embrace DE&I, the organisations say, because its workforce and consumer base are female-dominated, which means the foundations are there to build a pipeline of diverse talent. On top of that, with beauty products being intrinsically linked to external appearance, companies should have the incentive to develop inclusive product lines that will have a direct commercial impact.
Overcoming the talent gap
Across all intersections of identity, one of the biggest barriers to progress is the homogeneity of the talent pool. The report advises that companies who are furthest ahead are engaging in training for hiring managers, recruiting from outside the beauty industry, supporting and formalising employee resource groups, and investing in third-party services to audit their DE&I work. At Beauty Pie, VP of people and talent Victoria Foley says data on the representation of minority groups is measured across the application process and past the offer stage. “We can keep an eye out for any red flags: if 50 per cent of applicants are coming from underrepresented minorities, but only 5 per cent of interviews, then that’s something we can spot and address,” she says in the report.
Two key areas to improve upon are social mobility and disability, according to the report. Corporate roles have historically been dominated by people from privileged backgrounds, primarily because internships (which are low paid, based in expensive metropolitan cities, and often require a pre-existing social network) are inaccessible to many from underprivileged backgrounds. “We tend to get interns that all fit a similar profile,” said one health and beauty brand CEO in the report. “We recruit from specific universities, and find ourselves hiring people whose parents can support them.” The report suggests companies partner with schools and colleges in different regions and charities to widen the talent pool, and develop programmes to upskill entry-level workers from different backgrounds.
In terms of disability underrepresentation, only 13 per cent of businesses had a disabled senior leader, and even fewer have accessibility policies in place. The report highlights that companies should invest in the disabled community, who have a spending power of $1.7 trillion annually.
For Roya Shariat, director of social impact and communications at Glossier, the key to industry-wide change lies in understanding what different sized companies can bring to the conversation. For the nine-year-old beauty brand, a lot of its DE&I work is “quite scrappy” and “highly reactive”, she says. By contrast, a heritage brand might find it harder to make quick moves but have bigger budgets and more resources that allow for longer-term projects like scholarships, for example. “Identify what you’re good at,” she urges brands. “Find your voice in the conversation. Everyone has a role to play in this, it’s just about finding out what it is.”
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