Managing diversity: the business case

Inclusivity programmes are no longer a 'nice to have' but a 'must have', given the demographics, attitudes and values that exist within UK society at present. The following examples show the present picture and more detailed information can be obtained by using the resources in Section 7 .

Key objectives (for employers)

The UK labour force is changing significantly from its make up even 10-15 years ago and employers need to be alert to marketing themselves to these 'new' potential talent pools.

Traditional methods of recruitment will not appeal to all the market and more thought needs to be given to attracting non-traditional employees.

Individuals are becoming more selective regarding the type of work and working patterns they prefer.

Policies to ensure increased retention rates are essential to reducing additional recruitment costs.

Key objectives (for service providers)

The business opportunities are expanding and developing markets are considerable and reflect the diversity of consumerism in the UK today.

Significant shifts in spending powers and decision-making in households regarding expenditure mean that businesses need to reassess strategies for selling products and services.

Service provision (particularly in the public sector) is already taking into account the needs of specific communities and populations, and this is reflected in areas such as education, public health and administration. This needs to be expanded right across all sectors in order to benefit all concerned.

Business Case Tips and Techniques

Retaining staff

This is probably one of the most publicised elements of a business case argument. In the present labour market the competition for quality talent is intensive and will continue to be so for the foreseeable future. While HR managers have been aware of this situation for some time, functional line managers are beginning to experience the difficulties of filling vacancies with quality employees.

A lot is said regarding the need for imaginative and forward-thinking recruitment policies, but the more perceptive organisations are looking in their own 'back yard' to see why employees leave and what can be done about it. Naturally, if they can hang on to their best people they don't need to go to the marketplace for replacements, and in the process they may be enhancing individual and business performance.

A retention strategy obviously applies to all employees, but there are specific diversity-related issues that emerge when particular groups of employees are not managed well. Tips to manage these as well as other situations are outlined below.

Tips for improving retention levels

Do Audits

Undertake audits of staff through surveys, focus groups, interviews to establish how inclusive, fair and transparent the organisation is perceived.

Check policies

Review policies and procedures to demonstrate commitment to the diversity agenda and the organisation's desire to be a great place to work, for example, the development and publication of a robust harassment policy and processes.

Consult

Establish how specific groups feel they are treated in the organisation by, for example, consulting with ethnic minority employees regarding their view of career promotion and development opportunities. Align this with workforce metrics and data.

Specific development needs

Consider the development of positive action programmes for specific groups. Many organisations have put in place training programmes and networks for women managers and disabled employees, for example, and addressed some of the issues that may have led to demotivated employees who could have left the organisation.

Management of maternity returners

Review the policy relating to women returning from maternity leave. This is probably one of the biggest wastes of talent in the UK economy, and is compounded by some line managers both neglecting women while on maternity leave and then managing them back into the business inadequately, and in some cases, inappropriately. Educating line managers on all aspects of maternity management will have an immediate positive impact in the workplace.

Flexible Working

Review or introduce a robust flexible working policy that caters for all employees. Flexible working is not purely the domain of working mothers or people with caring responsibilities. This is a key population, but the policy needs to embrace all staff. There is compelling data that says men and couples without caring responsibilities also want to balance work and life better.

Fair selection

Ensure that procedures relating to selection and appointments are objective, transparent and based on a meritocracy. To have appointments made through an 'old boys network' will cause severe demotivation to most employees, but particularly those that could be considered the 'out group' when it comes to informal appointment processes.

Attracting Staff

For a lot of organisations, attracting quality talent is a key ongoing objective which will become more difficult to achieve. Employers need, not only to differentiate themselves in the marketplace, but to explore newer and more creative techniques to tap into less traditional talent pools.

There are some excellent pockets of activity in this area, which are ensuring that there are new talent pipelines being developed in 'newer' employment markets. These include greater recruitment of:

As outlined earlier, a sound employer branding will result in a better reputation and better quality applicants from all sections of the community. To stand still and continue with traditional recruitment practices in not an option if employers are to attract from a more diverse pool.

Tips for attracting a broad applicant base

Consult the marketplace

Establish what the perception of your 'employer brand' is in the marketplace. If the feedback is that your organisation is seen as a predominantly white, male, long-hours, macho culture, how attractive are you to the very people you are trying to attract?

Advertising strategies

Review the imagery, wording and methods of adverts and advertising. Ensure the job adverts present an inclusive picture of the organisation where all differences are valued. The wordings of adverts also say a lot about the culture, so make sure the advert words match the advert imagery.

Market flexibility

Ensure a flexible working policy is in place as part of the brand package. The need for greater balance in work and life will be a fundamental criterion for prospective employees at all points on the age spectrum. Evidence in adverts and at interview will prove a powerful magnet for various sectors of communities.

Benefits packages

Reward and remuneration packages need to be creative, flexible and in some cases self-selecting. The diversity of the workforce will mean different people are at varying stages with varying needs to suit lifestyle. Avoid the assumption that a standard reward and benefits package will appeal to all.

Work with the community

Establish greater outreach relationships with the local community and groups. Evidence is growing to confirm that once relationships are established within communities, a potential supply of talent will emerge which is attracted by the relationship element rather than 'transactional' type recruitment.

Review recruitment procedures.

The potential for bias or stereotyping in the selection process is very real and needs constant review. Not only do procedures sometimes become exclusive to certain groups of individuals, but the interviewers themselves have their own bias, perceptions and values, and so on. Training for interviewers should always include an element on how to manage stereotyping, bias and prejudice.

Check tests and assessments

The use of some psychometric tests and assessment exercises also need to be examined for potential bias. Particularly from a cultural, age and gender perspective, some can work against individuals, from particular backgrounds.

Servicing a diverse customer and client market

While a key thrust of any diversity strategy will be the employee/employer angle, it is worth remembering that diversity is an integral part of any business strategy and has a contribution to make to nearly all functions.

For the HR and diversity practitioner it is worth taking a very broad perspective on diversity, so the arguments needed to embed diversity, particularly at top levels, can be prepared as part of the influencing strategy.

To position equality and diversity work as a strong contributor to cost management is good - to position it as something that helps organisations better understand customer and community needs is even better.

Keeping abreast of what leading organisations are doing to serve their customer base will be useful to include in discussions with boards, senior management teams and chief executives.

Tips for delivering more inclusive service

Reflect the community

The mirroring of the local community through an organisation's workforce is very powerful and can lead to good public relations and enhancement of the organisation brand. This is particularly effective in for example, communities with a large older population, or large ethnic minority community. It builds rapport and empathy with the local community.

Make adjustments

Anticipate the needs of particular customers to ensure they receive the same standard of service as other customers. There are legal requirements under the service provision elements of the Disability Discrimination Act to ensure that adjustments are made. However, perceptive organisations are building in adjustments beforehand to enable individuals to choose preferred service options.

Analyse customer needs

As part of sound customer relationship management principles, organisations are now realising that specific groups of customers have specific product and service needs. The financial services and retail sectors have developed some small, but important, elements to their customer strategies to maximise market potential. Examples of these for ethnic minority customers are:

Diverse marketing and advertising

Ensuring that general marketing and advertising of services is backed by an inclusive theme and represented by inclusive actors, voiceovers etc. Generally speaking the position is slowly improving in terms of race representation, but other groups (women, older people, gay and lesbians, disabled people) are still subject to negative stereotyping and much can be done to reposition these images.

Language and etiquette

The education of staff who deal with customers is critical to ensuring that the language and etiquette is inclusive and appropriate when dealing with different people. For example, the car industry has undertaken significant awareness-raising sessions for staff to rid them of stereotyping men and women making car purchasing decisions.

Language is very powerful in customer and community relations and if used inappropriately can damage the strongest diversity strategies.

The concept of diversity and inclusivity when dealing with either employees or customers should be nothing new. A lot of diversity management is built into good people management practice and inclusive service strategies should be built into marketing and customer relationship strategies. However, the shift in demographics and the expanding market potential of these communities has made businesses rethink their game plan. In a lot of cases, the HR or diversity manager will be a valuable source of information and advice for business managers.

Developing a creative and innovative culture

When outlining the benefits of a diverse workforce, one of the most obvious, but often most neglected arguments is the value of having different people in the team, department or organisation. The freshness and richness that difference brings to the team, budget or strategy meeting is valuable and on the whole will lead to better quality decisions and outputs.

The need for difference in teams is not new. For years, HR and training professionals have been extolling the virtues of a diverse workforce as highlighted by the use of models such as the Myers Briggs Type Indicator and Belbin's Team Model. Many managers have returned to work following management development courses, desperate to create a team full of 'Plants', 'Shapers' and 'Resource Co-ordinators' and have indeed benefited in the process.

The other obvious benefit is that a diverse team understands diverse customers and communities. Many of the services available within the UK are the direct result of ideas and input from employees who understand and anticipate the particular needs of individuals, and communicated these needs to their managers. There have been excellent examples in the telecommunications and retail sectors where staff have pointed out adjustments that needed to be made to products to make them accessible to the disabled and older communities.

Tips to develop creativity and innovation

Maximise networks

Use any network groups (ethnic minority, women managers, disabled staff, etc) as a sounding board for product and service developments. The networks provide a strong market research feasibility and usability forum and will also highlight additional enhancements to services.

Ask employees

Introduce employee suggestion schemes. A leading food retailer now offers a range of kosher meals for the Jewish community - the idea came from a new member of staff.

Open organisation culture

Encourage an open management culture where ideas are welcomed and feedback is encouraged. A useful indicator of this culture will be a 360-degree appraisal system which allows bottom-up and top-down feedback and discussion.

Managing risk and reputation

The legislation that organisations need to comply with will undoubtedly increase and HR/diversity practitioners will need to ensure regular reviews of policies and procedures.

The impact that negative publicity can have on the employment brand can be devastating and have a long-term impact.

Potential recruits will take a very dim view of unfair or marginalising practices exposed in the local and national press. Even worse, the media will report the events in minute detail and coupled with investigations by, for example, the CRE or EOC, the organisation will then have to endure a long, painful process in repairing the damage and trying to attract employees. Share prices, market penetration, sales and customer retention have all been affected by negative publicity around equality and diversity cases. Journalists know that cases involving any aspect of the equality agenda will make good reading particularly if a strong brand name is attached to the feature.

Interestingly, boards and top management teams in both the private and public sectors are increasingly being held to account for disappointing workforce demographics, claims for discrimination and harassment, and archaic working styles and practices.

Questions at annual general meetings regarding the lack of women in senior management positions tend to be the norm rather than the exception these days, and can cause considerable challenge and embarrassment to directors and chief executives.

Some of the tips outlined earlier will contribute to a positive reputation of an organisation, but the need for fair, transparent policies and behaviours and cultures that really value difference cannot be over-emphasised. The most positive reputations will be destroyed if cases of inequality, racism and sexism are not addressed and prevented.

Corporate Social Responsibility

In recent years, there has been an increase in the amount of value statements made by organisations both in terms of how employers and customers are treated and dealt with and the need for responsible attitudes when dealing with communities, resources, outsourcing, and so on.

This increase in the development and publication of corporate value statements reinforces the thinking regarding the need for social and ethical justice in all strands of business activity. While budgets, costs, income and profits still drive the heart of the majority of business, the greater sophistication and selectiveness of communities warrant more responsible actions from business.

There is naturally a strong alignment between the agendas of diversity and corporate social responsibility (CSR) and some organisations firmly position diversity at the heart of their corporate social responsibility strategies.

There is undoubtedly a growing expectation on employers to observe and actively support strong social justice principles and to demonstrate this in the way that employees are treated. Organisations are not only expected to be fair and equitable, but to take a greater responsibility for the welfare of employees and to manage areas such as:

When individuals begin to see evidence of organisations driving forward the CSR agenda with real demonstrable change, this undoubtedly enhances the attractiveness of that organisation both as an employer and service provider.

Interestingly, an index of the FTSE top 100 companies and their activity relating to CSR has now been established and publicised. Already some strong themes are beginning to emerge about which companies are genuinely committed to these elements of social responsibility and those that naively consider CSR a marginal issue which doesn't have any direct impact on business.

Enhancing performance

Finally, an interesting piece of work conducted by Sears in the US added a lot of credibility to the role of HR policies and procedures and the effect that they can have on employee commitment and customer service.

The overall lessons from the research highlighted the importance of a motivated and performing workforce and the direct impact this can have not only on customer perception, but ultimately on the bottom line.

Managing employees with an inclusive and merit-based approach together with fair and open policies contributes directly to this chain and the motivation of employees.

Business benefits

All the potential drivers for developing a diversity strategy will at some stage be useful in influencing the movers and shakers within organisations to commit time, money and resource to this key agenda. Naturally, to fully engage people will require robust evidence of benefits to the business and how this will compliment and indeed add value to the overall business strategy.

Leading organisations are now developing detailed measurement systems in all these areas to enhance the business case argument and to substantiate this with hard data.

Summary

Social justice and responsibility remain key areas for businesses and are very closely aligned with the diversity agenda.

Benefits of diversity programmes