To improve the diversity of your workforce, you need to measure it, and this means collecting and monitoring data. But what questions should you ask employees about their individual characteristics and how can you handle that information lawfully? This article takes an in-depth look at these questions.

Many employers are increasingly focused on improving the diversity of their workforce. This has been driven by a number of factors; self-reflection prompted by the Black Lives Matter movement has led many employers to acknowledge that they could and should be doing more to promote diversity within their organisations. Legislative requirements and pressure from stakeholders are also increasing. For instance, companies are regularly expected to comment on their diversity profiles as part of RFPs, and the Financial Conduct Authority has recently introduced new requirements on listed companies to disclose against gender and ethnicity targets.

But to understand the extent of a perceived lack of diversity and to identify progress in addressing this, it is necessary for employers to collect data on the characteristics of their workforce. Whilst there is no legal requirement to undertake diversity monitoring, the Equality and Human Rights Commission (EHRC) Statutory Code of Practice recommends that all employers do so.

There are both practical and legal challenges for employers here, however. What data should employers collect and what terminology should they use? When should...

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