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Asos scraps diversity targets for bonuses

The fashion giant said their directors will focus on profitability in the year ahead

Asos has removed diversity targets from its criteria for directors to receive their bonuses to help them focus on profitability.

Last year, 25% of Asos’ executive bonuses were based on diversity, equity, and inclusion, including female and ethnic minority leadership targets. The rest was judged on revenue, profit and cashflow.

This year, 75% is based on earning with the remaining 25% measured against targets for closing stock, adjusted gross margin and cost to serve. 

The online retailer, which plunged to a near-£300m loss last financial year, said the move is part of their increased focus on profitability.

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Asos has however said diversity will continue to be a part of its long-term goals including a target to achieve 50% female and 15% ethnic minority representation at leadership level by 2030. It will also aim for over 40% female representation in engineering, product and science (technology) roles by 2030.

Ruth Cornish, founder of HR consultancy Amelore, said diversity bonus targets can be unhelpful in creating a more inclusive workplace.

Speaking to HR magazine, she said: “Targets can often create the opposite culture you are trying to achieve. Creating a workplace where everyone feels valued and included is key.

"Also, a requirement to appoint more females and ethnic minorities into leadership roles, for example, feels like a target from yesteryear. 

“Diversity targets can be distracting whereas directors focusing on profit, as many fast-growing startups do, does create a wonderfully diverse, dynamic and inclusive workplace.”

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Cornish said the move represented a wider focus shift away from EDI towards profitability, due to current financial circumstances.

She added: “When you are fighting for survival you have to be laser focused and have everyone pulling together with a clear goal in mind. I’m sure many of the businesses that went under in the last few years employed exceptionally talented EDI leads. 

“HR professionals that are commercial and understand business, are more important than ever in the current climate.”