The Business Case for Equality and Diversity – new survey published

This month (January 2013) the Department for Business, Innovation and Skills published ‘The business case for equality and diversity. A survey of the academic literature’. This report considers the evidence for the business case for equality and diversity in private sector organisations. The aim is not to make the business case, but to assess the current evidence from academic journals and some key practitioner sources.

If this is a particular interest of yours it is well worth reading the full report, but here are some of the key findings:

  • Studies appear to have found evidence that firms have reaped business benefits from equality & diversity, but not all firms in all contexts at all times
  • The firm’s economic and organisational context is crucial in determining how equality and diversity brings about business benefits. The business case is likely to depend on the markets a firm operates in, its labour market, organisational and other strategies and the actions of managers and leaders
  • How diversity is managed is also crucial: if appropriately, it can bring benefits to business, if poorly, it can increase costs. Different approaches are likely to be needed, depending on the nature of diversity, the internal workplace context and external environment.
  • There is no single approach that all businesses can adopt to ensure equality and diversity are beneficial. To be effective, equality and diversity need to be embedded in the business strategy, not treated as an ad-hoc addition.

And following those, here are the key implications for policy-makers:

  • There is no “one-size-fits all solution”. Businesses know best their own market and sector, and should approach equality and diversity with that in mind. Government needs to take this into account in its engagement with business on this issue.
  • This is not saying that businesses can ignore equality and diversity if it is not in their business interests (they still have to comply with the law), but rather that they may be overlooking important business benefits.
  • Gestures cost money: to achieve benefits and avoid costs, businesses need to see diversity as a strategic resource.
  • Being strategic about equality and diversity means more than merely complying with legislation, although this too can result in business benefits.

The report probably doesn’t tell us much we didn’t already know, but certainly gives a more robust analysis of existing evidence than we have perhaps seen before. Clearly, just “ticking the boxes” is not going to be enough for an organisation to reap the full business benefits of diversity – there needs to be a tailored, strategic approach that is designed and implemented around the needs and context of that particular organisation.

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