Our EDI strategy includes specific goals for expanding staff diversity with regards to ethnicity, gender, sexual orientation, disability and socioeconomic background, so that Nesta better reflects the diversity of London and the UK overall.

Last year, we redesigned the recruitment process to ensure that everyone had a more equitable chance of being hired; we now focus on scenarios over experience in application questions, anonymise CVs (and only review them at the interview stage), allow reasonable adjustments throughout the interview process and provide detailed guidance to our hiring managers to fairly manage any discussions over starting salary. We’re starting to see some positive results. Over the past year and a half, we have seen a steady improvement in the diversity of staff across most characteristics (see Figure 1). We have exceeded our targets with regards to disability and socioeconomic background, and have maintained Nesta’s diversity across gender and sexual orientation. While our targets help hold us accountable for change, we will continue to strive to make Nesta a more and more diverse workplace, across all levels of the organisation and many facets of identity.

What’s next?

We know the steps that we’ve taken have enabled us to grow the diversity of our staff, yet this has been more true in the more junior levels of our organisation compared to more senior levels. We are therefore exploring additional steps we can take – we want to make every effort to hire diverse talent into our most senior roles and support our diverse talent to grow at Nesta.

Additionally, while we have seen positive change in the diversity of Nesta over the past two years, we know we still have further work to do to reach and recruit Black talent in particular, at all levels of our organisation. This is a top priority for us across our recruitment and inclusion goals, discussed further below.

Our goal is to eliminate gender and ethnicity pay gaps at Nesta.

Median pay gaps are calculated by finding the midpoint in all employees' hourly pay. This takes into account variations in hours for people who work compressed hours or part-time. Importantly, a pay gap is not the same as an equal pay issue; pay gaps calculate and compare the median hourly pay of different groups across the organisation, including all different bands and roles in one analysis. This means that the representation of people from different backgrounds in more junior and more senior levels of the organisation significantly affects the median pay gap. Equal pay calculations, on the other hand, compare the hourly pay of people doing similar roles.

As of July 2023, our median gender pay gap is 6%, down significantly from 14% in September last year – a highly positive improvement that puts us below the charity sector average (9.1%). However, our median ethnicity pay gap remains stubbornly high at 14.5% – down just slightly from 16.1% from earlier this year (no sector benchmark available).

Our efforts to ensure equity in our pay, progression and starting salary negotiation processes has likely played a role in reducing our pay gaps. Yet given the relationship between representation and median pay gaps, we believe to a large extent the reduction in Nesta’s median gender pay gap has been driven by an increased proportion of women in senior leadership roles (including two new women executives), a more balanced distribution of women across all quartiles of the organisation, and salary and equal pay adjustments that were made following market benchmarking last year.

Concerningly, we have not yet seen the same changes with regards to ethnicity; our staff from minoritised ethnic backgrounds are more represented in lower paid roles than higher-paid, more senior roles. Moreover, this median ethnicity pay gap figure also masks significant differences between ethnic groups; in comparison to white staff, Black staff are experiencing the largest pay gap (36%), followed by Asian staff (15%) and mixed ethnicity staff (10%).

Unbalanced representation of minoritised staff across levels of the organisation is the primary driver of our ethnicity pay gaps. This is deeply concerning to us. It is concerning from a pay equity perspective, but also because it reveals a gap in our leadership diversity, with implications on our work and on workplace inclusion. We will be doing everything we can to shift the current reality.

Knowing we had a long way to go to reach our goal of zeroing Nesta’s gender and ethnicity pay gaps, we engaged in a rigorous data analysis to better understand what other factors contribute to pay gaps at Nesta. Federico Andres, Nesta’s Head of Statistical Methods, built a causal model to explore whether, and to what extent, factors such as disability disclosure, parental leave, socioeconomic background and team/department, amongst several others, affect median hourly pay.

This analysis revealed both reassuring and concerning insights. For example, on the one hand, our data does not suggest that parental leave absences, attendance of a private school or disability disclosure have a meaningful effect on gender or ethnicity differences in hourly pay. On the other hand, we found that where women were line managed by other women, the gender pay gap was higher (12% as opposed to 4%).

This could perhaps be something cultural, a reflection of women line managers holding higher performance standards for women, or something more structural, with men on average managing women in higher paid roles than the women who manage women – a question we are now exploring through focus groups with line managers and further data analysis.

Our analysis also explored whether new interventions could help close Nesta’s pay gaps. We found that frequently cited approaches to close pay gaps, such as promoting a greater proportion of staff of minoritised backgrounds or weighting annual cost-of-living pay increases towards those in lower bands, would have a minimal effect on Nesta’s median ethnicity pay gaps. This is likely because the distribution of staff of diverse ethnic backgrounds is imbalanced, so our median pay gap would not be significantly affected by small pay increases or promotions for lower pay bands. Nonetheless, as mentioned earlier, we will still be exploring ways of better supporting diverse talent to progress and grow their careers at Nesta, given the importance of diverse leadership to our work and workplace.

What’s next?

To reduce the ethnicity pay gap, our analysis points to the need to promote or recruit more staff from minoritised ethnic backgrounds into middle management and senior leadership roles, in order to achieve a more balanced distribution of ethnicities across the organisation. This is a key priority for Nesta next year and in the years to come.

We’re focused on ensuring that everyone at Nesta feels a sense of belonging.

Nesta is made up of – and made better by – people with diverse lived experiences. We are committed to ensuring that people feel that they can bring their whole selves to work and find a sense of community within the workplace. We seek to ensure that our people are supported through market-leading HR policies in relation to flexible working, bereavement leave, menopause support, domestic violence support, birthing, non-birthing and adoptive parental leave – and more. We also challenge ourselves to learn, reflect, adapt and improve, so that we may create a culture that is continuously fostering community and bolstering inclusion.

We measure belonging annually through our employee engagement survey, and between June 2021 and October 2022, we saw an 11-point increase in people’s sense of belonging at Nesta, from 46% to 57%. While we are aiming for far higher, and know that this data point reveals work we must do to support Nesta staff, we are happy to see positive change. Importantly, qualitative follow-ups revealed that, for most people, their sense of belonging at work is driven by many factors beyond EDI, related to their role and team.

Our engagement survey showed progress in other areas too; 59% of respondents believe , on average, everyone receives the same treatment, respect and opportunities at Nesta (+26% from last year), and 60% of respondents said that leaders behave in an inclusive way (+20% from last year).

Crucially, we wanted to ensure that the views of minoritised ethnic staff were not being overlooked in our organisation-wide survey, so we also analysed our engagement survey based on demographic characteristics. 60% of minoritised ethnic staff scored EDI-focused questions favourably, a significant improvement of 39 percentage points from last year.

While belonging is nuanced and evolving, and therefore difficult to attribute actions to outcomes, we believe these positive changes are driven at least in part by our efforts to advance EDI across Nesta, making demonstrable progress against our goals. From staff feedback, we believe our efforts to ensure we have a fair and transparent pay and promotion process, and ensuring that all staff (including new joiners) – and particularly all managers – have a strong awareness of EDI issues, may have played a particularly important role in supporting workplace inclusion.

In October, we completed our first Nesta-wide EDI learning program, facilitated by learning provider Be the Riot. Through this, approximately 80% of staff engaged in five hours of facilitated learning in small groups and over multiple sessions. The curriculum covered anti-racism, inclusive language, inclusive behaviours, psychological safety and understanding intersectionality, among many other topics. On an ongoing basis, this training is available to new joiners at Nesta, alongside other EDI induction sessions, so that all Nesta employees start with a foundation of EDI awareness and a strong understanding of the importance of equity, inclusion and allyship to who we are and what we do.

To supplement our learning program, we’ve launched a monthly internal speaker series, titled “Diversity dialogues”. The initiative has inclusion at its heart and we endeavour to promote and platform speakers from minoritised groups. Since its inception in September 2022 we have hosted ten speakers who have spoken on topics ranging from conquering imposter syndrome to understanding how to manage menopause symptoms at work. 66% of speakers were from a minoritised ethnic background, 66% were women and 44% were women of colour. The goal of the speaker series is to educate and spark engagement among our people, and foster an environment for open dialogue on EDI-related topics we may not regularly discuss.

Our Employee Resource Groups (ERGs) continue to provide an important space for minoritised colleagues to gather and find a sense of belonging and community. We now have grassroots groups that focus on disability and long term health conditions, neurodiversity, people of colour, and the queer community.

What’s next?

We are always learning about what staff wish to see at Nesta and how we can support a stronger sense of belonging and inclusion in the workplace. In the next few months, we will be rolling out our 2023 engagement survey, as well as a separate inclusion survey specifically focused on race and racism in the workplace. We will be using this feedback from staff to help us identify and design new initiatives to support a growing sense of belonging at Nesta.