The Business Case for Equality and Diversity Kathy Monks 1

The Smart Economy: The role of human capital ‘The Smart Economy combines the successful elements of the enterprise economy and the innovation or ‘ideas’ economy while promoting a high-quality environment, improving energy security and promoting social cohesion. A key feature of this approach is building the innovation or ‘ideas’ component of the economy through the utilisation of human capital – the knowledge, skills and creativity of people - and its ability and effectiveness in translating ideas into valuable processes, products and services’ (Building Ireland’s Smart Economy, 2008: 7)

The business case for investment in equality and diversity Employees have a better work-life balance Legal costs involved in employment equality claims are avoided Improved service delivery through the provision of flexible work arrangements Links with corporate social responsibility The war for talent Globalisation of markets resulting in a diverse customer based requiring understanding of cultural diversity, together with a diverse set of employees Image as an employer as inclusive Equality and diversity provide new sources of ideas resulting in innovation and creativity

The Equality-Diversity Value Chain Organisational context Employee Outcomes Commitment Motivation Job Satisfaction Work-life Satisfaction Work-life Balance Reduced Stress Organisation Performance Access to new labour pools & markets Attraction of high calibre applicants Enhanced service levels & customer satisfaction Equality & Diversity Policies & Practices Employee Performance Reductions in absenteeism & labour turnover Improved labour relations Equality and Diversity Strategy Business Strategy Line managers Trade Unions The Equality-Diversity Value Chain

Business Strategy and Performance Research in USA has highlighted a positive link between proactive diversity management initiatives and organisational effectiveness in terms of productivity, creativity, attraction and retention of talented employees and the attraction of a diverse customer base Positive links between affirmative action programmes and performance Positive links between ethnic diversity and performance Evidence from the US and UK indicates that increased top management team diversity in terms of functional background, education, age, ethnicity, gender has a positive effect on firm profitability.

Equal opportunities policies Irish research indicates the positive impact of equal opportunities policies - on employees’ well being, their sense of fairness, and their attitudes to their jobs and their employers. British research indicates a positive relationship between equal opportunities policies and productivity with an enhanced effect where there were more women and ethnic groups employed Introduction of equal opportunities policies need to be included as part of the package of HR policies that employers introduce when trying to enhance productivity and employee job satisfaction rather than as stand-alone policies.

Link between strategies and innovation outcomes [National Workplace Survey, NESDO, 2009] Co-working, social interaction strategies - Employees experiment with new ways of working - Less hierarchical organisation - New work structures, team working, quality circles - Staff network with other organisations Learning strategies - Staff training and development - Formal PMDS - In-house dispute resolution - Equality and diversity policies Empowerment strategies - Information - Consultation - Direct employee involvement - Flexible working - Work/life balance arrangements Innovation Outcomes

Flexible work hours and performance Irish employees working flexible hours report reductions in work pressures and higher levels of autonomy while those working part-time report reduced work stress and work pressures . An Irish study of work-life balance found that satisfaction with working hours and working arrangements were found to be positively associated with overall work satisfaction and life satisfaction and related to lower stress levels A study of software employees in the UK indicated that work-life balance and flexibility in managing the work-life boundary influences employees’ views of whether or not they are treated fairly by employers.

Flexibility and Performance An initiative by BT to enable people to work from home found that these employees are more efficient and deliver more profit to the business with absenteeism rates that are 2% less than the UK average A review of flexible working arrangements in the USA reports that these policies reduce lateness, absenteeism and turnover and have a positive impact on retention The Second Work-Life Balance study in the UK found that the majority of employers who provided flexible work arrangements found them cost effective with a positive impact on labour turnover, motivation and commitment and employee relations.

BUT Senior managers are poor role models of flexible working arrangements and a culture of presenteeism persists in many organisations with opportunities for promotion perceived as requiring long working hours. Line managers may find themselves managing equality and diversity on top of all their other responsibilities and may block, for example, flexible working arrangements as these cause problems in managing their workforce. How line managers interpret and implement policies is therefore crucial.

The Role of Line Managers Studies in the USA have shown that top management and immediate supervisors can undermine official work-family benefit programmes by actions that include not informing employees of their existence, refusing access or promoting traditional organisational cultures that reward only individuals who pursue work goals without reference to personal life issues Research into part-time work among nurses in the National Health Service in the UK found that line managers were often unenthusiastic about part-time working, even though this was shown to improve retention rates among nurses Recent Irish research indicates that line managers may be poorly trained in the management of equality and diversity and that the diversity of their needs as managers may not necessarily be catered for by organisations.

The Role of Trade Unions [1] Recent research in the UK suggests that unions can play a positive role in promoting gender equality. Equality bargaining emerges as a result of women’s voice within unions, the characteristics of bargainers themselves and a framework of public policy that supports trade unions and collective bargaining. A study of French and UK trade unions indicates that unions are relatively marginal to the process of introducing work-life balance policies and that employer-led initiatives often place them in a defensive position. However, there is a strong link between the existence of equal opportunities polices and WLB policies in the workplace. The presence of women in the union shown to be crucial.

The Role of Trade Unions [2] Research in Scotland suggests that the equal opportunities agenda continues to be marginalised within collective bargaining. However, the emergence of specialist equalities officers as key insiders articulating the case for action has progressed the equal opportunities agenda within unions. At the same time, the leadership provided by such specialists may be constrained by bureaucratic structures within unions and undermined by apathy, hostility or lack of awareness among workplace activists.

The Role of Trade Unions [3] Research in Scotland suggests that unions’ approaches to equalities are largely based on the ‘sameness’ or equal treatment model and to a lesser extent the ‘difference’ model and, while making some reforms, unions are not substantially engaging with the underlying structural causes of inequality. Research in the UK suggests that in unionised workplaces, the treatment experienced by Black workers – compared with White workers – is perceived to be more unequal than in non-unionised workplaces.

Costs of Ignoring Diversity Costs of replacing employees who leave because of lack of opportunities or discrimination within the workplace Absenteeism costs – if employees feel undervalued or experience discrimination, harassment and bullying Legal costs where employees take a case plus damage to corporate reputation Productivity reductions due to increased turnover and absenteeism Increased conflict within the workplace Increased management costs Poor internal communications

Critical Success Factors I Leadership: Top management support and committed high profile leaders who will demonstrate the importance of equality and diversity Vision and Values: The incorporation of equality and diversity into organisation vision and values and ensuring that is becomes a core activity Integration of equality and diversity objectives into business objectives: Inclusion in objective setting, reward and recognition Assessment of specific needs of organisation and tailoring of management of diversity to those needs: Customisation of equality and diversity to fit with organisational strategy

Critical Success Factors II Ownership for diversity and equality is spread throughout organisation Organisational support: through training, for line managers, for diverse teams Involvement of employees in design and implementation of equality and diversity initiatives Measurement Integration with other HR policies & practices Embedded into organisational change

Challenges to Implementing equality and diversity initiatives lack of awareness about equality and diversity and what they mean Limited capability to develop and implement equality and diversity initiatives Lack of commitment by senior management Discriminatory attitudes and behaviours Difficulties in measuring the results of initiatives Inadequacy of financial resources allocated A lack of understanding of the business benefits Difficulties in changing the culture of an organisation Danger of marginalisation within organisations as economic focus shifts to cost cutting, redundancies and work intensification