The business case

Writing in the magazine People Management, Margaret Hodge, the under-secretary of state for employment and equal opportunities, and minister with responsibility for disabled people, claimed that disabled people bring "commitment and loyalty" to the workplace.¹ Hodge says that: "Companies such as BG, HSBC, Sainsbury's McDonald's and Tesco employ a large number of disabled staff. These firms have found that they are more punctual, more productive and have better attendance records than their non-disabled colleagues. Disabled employees crave the independence and self-esteem that comes with being in work. That's why they will so often go that extra mile for their employer."

A similar argument was put forward by Charlotte Atkins, MP for Staffordshire, Moorlands, in a House of Commons debate on disabled people: "There are clear benefits in having a diverse workforce and ensuring that all candidates, irrespective of their disability, are considered for employment. In that way, the best person may be employed. Staff retention rates can benefit from the employment of people with disabilities, who are frequently more loyal to their employers. That can lead to a tremendous saving on staff turnover and advertising. These days the public perception of an organisation is improved when the public see that a company employs people with disabilities."²

The claims advanced by Margaret Hodge and Charlotte Atkins reflect the views of many people and organisations that there are good business reasons for promoting equal employment opportunities for disabled people.

Despite the rhetoric, any firm looking for a clear-cut cost-benefit analysis of whether or not being positive about employing disabled people will boost its bottom line will be disappointed. The research, simply, has not been done. Nevertheless, there are compelling arguments as to how the employment of disabled people might benefit a company, and there is plenty of hard data to dismiss the notion that disabled people impose a heavy financial burden on employers.

ACCORDING TO THE DfEE …

The House of Commons Education and Employment Committee report, Opportunities for disabled people, offered five components to the business-case argument:

It concluded: "The business case for recruiting and retaining disabled people is a strong one, and we urge the Government to give greater emphasis to the business arguments in its campaigning, and to make greater use of examples of good practice and business to business communication."³

Similarly, the Department for Education and Employment (DfEE) claimed that: "There are good business reasons for employing disabled people. Most disabled people can work alongside their non-disabled colleagues without any, or with very little, special assistance".⁴

According to the DfEE: "Research shows that:

In addition, says the DfEE, "adopting good practice and complying with the duties and requirements of the DDA reduces the risk of costly litigation and bad publicity. These can be bottom-line benefits."⁴

The DfEE also believes that adjustments can benefit other employees and customers. "There are clear examples of the wider benefits of making adjustments for one disabled person. Some of the more obvious are physical adjustments where non-disabled employees and disabled customers can benefit - for example, improved access, provision of lifts. But others may be less obvious. Providing oral instruction, as well as in writing, will help a dyslexic person, but other employees with literacy difficulties will also benefit."⁴

This point is echoed in our case study at HSBC Bank (chapter seven ). Heidi Meier, HSBC's human resource (HR) research and communications manager, says: "We know that many disabled people are our customers, and that disabled people in general are our potential customers. It makes sense for us to reflect that." According to Mary Walsh, manager, Customer Disability, HSBC:

"The business case for diversity is clear: we need good people to serve our customers, and to do so, we need to be able to relate effectively to these customers."

COMPILING A BUSINESS CASE

While the arguments set out in the previous section are persuasive, evidence quoted by the DfEE is largely anecdotal and it would be wrong to dismiss cost as a factor in the equation. What, then, are the real costs and benefits of employing disabled people?

In compiling a business case, employers will need to look at the costs as well as these perceived benefits. Costs could be divided into two broad categories:

The next sections consider the relevance of these cost categories.

Direct costs

A survey carried out by IRS in October 1996 - just before the employment provisions of the DDA came into force - asked employers whether or not complying with the legislation would be expensive.⁵ A quarter of surveyed employers said that they either did not know, or could not know, how much compliance would cost. however, 34% said that compliance would not be costly. A further 30% felt that it would be "moderately expensive", while just 8% said it would be expensive or very expensive.

A significant minority (19%) of the respondents were able to put an actual figure on the estimated cost of compliance - which ranged from £5,000 (Warwickshire Constabulary) to £250,000 (Sandwell Metropolitan Borough Council). The average cost was £40,000 though, as the author of the report, Jennifer Hurstfield, noted, cost will be "affected by factors such as size of the workforce and the extent to which buildings and workplace facilities are seen as requiring significant modifications in the first year".⁵

Many adjustments to the work or workplace to accommodate a disabled worker can be made at minimal cost. Obvious examples are providing flexible working hours, moving a mobility-impaired worker to a ground-floor office, and providing a vibrating pager to a hearing-impaired worker who is unable to hear the fire alarm. In fact, a survey (albeit somewhat dated) carried out on behalf of the US Department of Labor in 1982, found that in 51% of cases the cost of an "accommodation" provided to disabled employees of government contractors was nil.⁶ In a further 18.5% of cases, the cost was under $100 and about 13% cost $100-$499. Just 12% of adjustments cost $1,000 or more. A more recent study, carried out in 1995 by the US Job Accommodation Network, found that of 563 respondents, 81% of adjustments cost no more than $1,000, and the median cost was just $200.⁷

Our case study of HSBC Bank reiterates the general finding that most adjustments are relatively inexpensive. Meier told us that in the bank's experience, whereas some adjustments had cost several thousand pounds, "many adjustments can be made relatively inexpensively. Or can be done free of charge." HSBC Bank acknowledges that its most expensive adjustments have included the installation of Braille terminals for computers (which must also be linked to the bank's computer network) and the fitting of power-assisted doors to accommodate an employee with a mobility disability.

Even where the cost of an adaptation is considerable, financial support is available through the Employment Service's Access to Work scheme (see chapter eight ). The scheme can contribute 80% of the cost of an adaptation costing between £300 and £10,000, and 100% of costs above that threshold. If an adaptation is made under the scheme, the most an employer will pay is £2,240 for an employee over a three-year period.³ Our HSBC Bank case study includes a case history of an employee for whom funding was granted through Access to Work.

Indirect costs

According to the DfEE, disabled people have no more likelihood of being generally ill than their non-disabled colleagues.⁴

According to an Institute of Employment Studies survey on The recruitment and retention of people with disabilities, when respondents were asked to identify reasons why it might be difficult to employ people with certain disabilities, "hardly any adverse comments were made about the productivity, propensity to take sick leave or personal characteristics of disabled people, nor about the attitudes of other employees towards disabled colleagues."⁹

Indirect benefits

There are a number of indirect benefits and savings that employers may reap through good practice in disability management.

According to the DfEE, 140,000 disabled people work from home using a telephone and computer.⁴ Equipping disabled homeworkers, it says, can be considerably cheaper than renting and equipping office space.

Another indirect benefit reported in a disability management study by Middlesex University Business School is an apparent improvement in sickness absence levels among employers with a written policy on the return to work of employees absent through illness or injury. According to the report: "Forty-one per cent of those with a written procedure recorded a decrease in their absence levels over the past three years, while 26% recorded an increase. By contrast, of those without a written policy, just 15% of respondents recorded a decrease in absence levels in recent years, while 40% recorded an increase."¹⁰

While there are many possible reasons for the reported reduction in sickness absence - which may have nothing to do with the rehabilitation policies - it is worth noting that those organisations with written polices were more likely to make adjustments in working hours, offer light work or transfer employees to other tasks.¹⁰

It is also worth noting that, under the DDA, organisations are now required to make reasonable changes to the provision of goods, facilities and services so that they do not exclude disabled people. From 2004, firms will have to take reasonable measures to remove, alter or avoid physical barriers that make it unreasonably difficult or impossible for disabled people to gain access to their goods and services. These reasonable adjustments to service provision are, or will be, required by law. Making adjustments to accommodate existing employees and new recruits may have the additional benefit of meeting requirements under the access to services provisions of the Act. It may create opportunities for projects to fulfil joint objectives, and for costs to be shared between different budgets, such as HR, facilities, health and safety and marketing.

A benefit that is difficult to quantify, but nevertheless of great potential value, is in the professional development of managers who successfully negotiate the challenge posed by the DDA. A manager who has experience of implementing good practice in relation to disability, or indeed who has successfully made adjustments that have enabled the recruitment or retention of a disabled person, is likely to be better equipped to tackle other management challenges.

SIZE MATTERS

Are smaller companies more vulnerable to financial risks by employing disabled people?

According to Tim Collins, MP for Westmorland and Lonsdale, "A large number of small businesses do not recognise that there is an overwhelming economic case for them to fish in a large pool. It is important for them to ensure that every employee is as good as they can get. He or she should bring as many talents, aptitudes, skills and qualifications, and as much devotion and dedication to their work as possible. That will often mean that the best person for them to hire is the person with a disability. Small businesses frequently do not recognise that. A lot of work is needed to make them understand that and realise that they are not being asked to undertake an onerous obligation because of political correctness. They are being asked to act in the interests of their future competiveness."²

Not everyone agrees. In response to an inquiry on Opportunities for disabled people, Brendan Burns of the Federation of Small Businesses told the House of Commons Education and Employment Committee that it is "unreasonable to impose on small businesses the burden of employing disabled people who would be more likely to take sick leave and disrupt the businesses' cash flow".³

Small businesses do need to comply with the law and changes to the DDA (see figure 4.1 ) will bring more firms under its remit. However, small businesses do not have the human resource infrastructure present in larger firms, and this may create resource issues in the development of disability management systems. One possible way around this is for firms to consider partnerships with other organisations. An example of this is given in our case study of the Isle of Wight Healthcare NHS Trust, currently setting up a programme of support for small and medium-sized enterprises to prevent back injuries and promote back care at work (chapter seven ). A partnership project in the West Midlands, "Workwell", was discussed in chapter three .

Figure 4.1: Reducing the DDA threshold

Irrespective of whether or not small businesses are faced with a disproportionate financial burden if they employ disabled people, UK law is likely to be changed in the relatively near future to remove the threshold on employer size - currently set at 15 employees - at which the employer comes under the employment provisions of the DDA. The House of Commons Education and Employment Committee states that: "It is difficult to justify, in principle, a situation in which someone's statutory protection from discrimination is dependent on the number of people whom their employer employs."³

The Education and Employment Committee "supports the Government's objective of removing the small employer threshold for compliance with the DDA," and recommends that "the removal of the threshold should be phased so as to allow small employers time to understand their new responsibilities, obtain appropriate advice and take the necessary action in advance of the deadline"¹¹.

CASE CLOSED?

Employers that exercise good management practice in the employment and retention of people with disabilities may benefit in the following ways:

It is, however, impossible to make a business case for employment, adaptation or job retention for all disabled workers in all cases - and there is no reliable research that does so. Firms, particularly small enterprises, will inevitably balk at the cost of a major workplace adjustment to accommodate a disabled worker, or a sustained period of job protection for a worker on long-term sick leave, even if the overall benefits for society - such as savings on benefit payments and the well-being of the individual - are compelling.

The majority of disabling conditions place very few obstacles to the disabled person's work (see chapter two ). Most disabled people, and their employers, consider that their disability has no, or a negligible, effect on their performance, and many disabilities can be overcome by adaptations that cost little or nothing. Nevertheless, some adjustments are costly and arguments that it is worth employing disabled people because they "go that extra mile" and are, in some way, "grateful for the work", are patronising to disabled people. People with disabilities have the same range of characteristics - from keen and willing to obstinate and irascible - as non-disabled people.

Firms cannot be expected to bear the full costs of disability management in all cases without financial assistance and will need to be made fully aware of the help that is available. Where disability management costs are high, the business case can only be sustained if it is propped up by public funding, such as through Access to Work and Supported Employment schemes. Even where finance and support are available, businesses will need to be reassured that adaptations can be made speedily so that their businesses are not affected by unnecessary absence and disruption.

¹     Hodge M (1999), "Disability means business", People Management, 11 November 1999.

²     Hansard 13 April 2000.

³     House of Commons Education and Employment Committee (1999), Opportunities for disabled people, Ninth Report of the House of Commons Education and Employment Committee, The Stationery Office, ISBN 0 10 556499 0, price £10.60.

⁴     Department for Education and Employment (1999), Employing disabled people: a good practice guide for managers and employers, ISBN 1 84185 101 9, DfEE, London, free.

⁵     IRS (1997), "Implementing the DDA: an EOR survey of employers ", Equal Opportunities Review, 71, 20-25.

⁶     Harold Russell Associates (1982), A study of accommodations provided to handicapped employees by federal contractors, Prepared for the US Department of Labor, Employment Standards Administration (contract J-9-E-1-0009).

⁷     Jackson C J, Furnham A and Willen K (2000), "Employer willingness to comply with the Disability Discrimination Act regarding staff selection in the UK", Journal of Occupational and Organisational Psychology, 73(1), 119-130.

⁸     Burns J (2000), "Disability law could cost business £1bn", Financial Times, 8 May 2000.

⁹     Dench S, Meager N and Morris S (1996), The recruitment and retention of people with disabilities, Institute of Employment Studies report 301, ISBN 1 85184 227 6, IES, Brighton.

¹⁰    Cunningham I (1997), "Managing disability in the workplace", Occupational Health Review, 70, 14-18.

¹¹    Burns J (2000), "Disability law could cost business £1bn", Financial Times, 8 May 2000, p.5.