Is your office really an open and inclusive workplace? Beneath its calm exterior there might lie a simmering cesspool of repressed bigotry. You might not ever find out, until someone has been grievously offended, and then it’ll be too late. Rob Lewis investigates the business argument for diversity management.

According to the CIPD, UK businesses are missing out on the ways that diversity can add greater value. A CIPD report published last year surveyed the responses of 285 individuals across all economic sectors and revealed “a large majority of employers have a long way to go”. Can things really be that bad, or are we just setting the wrong standards?

“Metrics is the first step,” says Sally Humpage, diversity advisor at the CIPD. “You can’t start to understand the diversity of your workforce if you don’t understand what you’ve got in your workforce. What’s your mix? Once you’ve established your age profile, your ethnic mix, the proportion of your workforce that is gay or disabled, and so on, then you can start to make comparisons.”

In the mix

National or large employers might decide to compare their baseline with the government census, although this isn’t the only index against which to identify potential under-representations. “More progressive organisations are breaking those statistics down by region,” says Humpage. “There’s a national retailer doing just that for all their stores. They know, say, what the Birmingham region looks like, so they know what community their Birmingham store is serving and that’s where your recruitment pool is and that’s the community you have to reflect.”

Until recently, deriving meaningful analysis from census statistics was a difficult thing for smaller employers to do. But since the 2001 census was completed, the Office of National Statistics has been busy extrapolating the figures. Now the census information can be broken down into local authority areas, and features percentages of gender, ethnicity, disability, religion and age, all of which is available online and free of charge.

It’s no more than a starting point, as Humpage admits, but if you’re not even at the starting line then you’re going to get left behind very quickly. Diversity management is an ascending concept. Observe the continuing public duty legislation emerging for the public sector, and the growing role of the new Commission for Equality and Human Rights, which is due to absorb many of the roles currently performed by organisations such as the Commission for Racial Equality and Equal Opportunities Commission.

It’s not just a case of following the latest HR fad. For some years, diversity advocates have been arguing that as well as righting social injustices, there is also a compelling business case for diversity management.

The new corporate social responsibility

There are countless economic factors that make diversity management a profitable, as well as honourable, business strategy, according to studies by the CIPD. Their research on the psychological contract shows that people aspire to work for companies with good employment practices, and to be valued at work. An inclusive and open workplace is therefore one that gets the most out of its staff, as well as allowing businesses to recruit and retain from a wider selection of people. Often, a diverse workforce also makes it easier to connect with a diverse marketplace.

“It’s all about corporate reputation,” explains Humpage. “It doesn’t matter what size you are. Whether you’re small, medium-sized, or a global company like Citibank or Reuters, they’re all serving communities. Corporate reputation is the contract between the firm and the community in which it operates. If you get that wrong, and you don’t practice what you preach, your reputation can nosedive. Productivity will follow, and a few other things.”

What it all adds up to is the new model of corporate social responsibility (CSR). “Originally CSR was seen as an environmental issue, such as what you are doing with your packaging,” Humpage says. “Now there’s definitely a broadening definition which includes how you are treating your people.”

The changing nature of CSR is mirrored by the evolutionary history of diversity management, according to Hilary Wiseman of Wiseman Consulting, formerly head of diversity at HSBC.

The evolution of inclusion

“There’s a continuum which goes from equal opportunities through to diversity and then hopefully to inclusion,” she says. “I think we’re somewhere between diversity and inclusion.”

“Equal opportunities were very much to do with quotas and doing something special for certain sectors of the population whether that’s ethnic groups or women or people with disabilities. But it’s looking upon those groups almost as being less valuable, so you have to do something special to allow them in.”

Positive discrimination is quite a dated concept now, Wiseman argues. In contrast, diversity values peoples’ differences, rather than assuming they’re going to be a risk or a problem. “It’s quite a big evolution. Equality was very much: if we don’t get this right, we’ll get clobbered in court. Diversity management is more a case of: if we don’t get this right, we’re going to miss out on a whole packet of business, and it’s going to damage our reputation. I like to think that’s how far we’ve come, although obviously people still get in wrong, otherwise the employment tribunal service would be out of business.”

In fact, the employment tribunal service is busier than ever. Employers’ group the EEF revealed that tribunal hearings rose by 25 per cent last year.

“The majority of the cases are justifiable,” says Wiseman, “and some of the behaviours the claimants have experienced at work have been horrendous, and that’s not just to do with their gender or the race, it’s to do with the fact that leadership and management are absolute rubbish in the place where they’ve come from. Nowadays it’s much more likely that people will say ‘I have a right to be treated with dignity and respect at work, and if I don’t get it, I’m going to do something about it.'”

The truth is, employees have more rights than ever, and a growing awareness of those rights. Proper diversity management realises this fact, and businesses need to accept it. Are you going to deal with it sensitively and sensibly, or are you going to brush it under the carpet until it becomes an even bigger problem? That said, diversity management can sometimes cause problems, as well as prevent them, as Wiseman concedes.

Sensitive handling

“If you’re asking questions about your population, people within the organisation have got to feel comfortable that that information is going to be handled sensitively and appropriately,” she says. “People are quite comfortable answering questions on race, gender and disability, that’s relatively normal, but you start asking questions about sexual orientation, religion and belief and people really get quite nervous because they view that as a personal issue.”

They key to successful monitoring is effective communication. If you’re going to ask what may be considered intrusive questions, employees need to know why they’re being asked.

Equal rights charity Stonewall recently produced a practical monitoring guide for sexual orientation sampling which offers a very practical view, and it’s available for free at their website. Their recommendations include delivery of diversity questionnaires direct to the employee’s home address, a gesture towards privacy which greatly improves response rates.

However, even the most sensitive attempts at research can go wrong without a unified approach. “I know of one primary care trust,” Wiseman confides, “who were very committed to finding out about their population. So they wrote a carefully worded letter, sent to the home address, which promised total anonymity, and for all the questions there was an option to tick if you preferred not to say. But what they didn’t do was check the other strategies going on in the trust at the time, and one of those was cost-cutting. So to save money on paper, they had a carefully printed letter with their name and address on the front, and on the reverse was the anonymous questionnaire, which clearly made people think they couldn’t trust the organisation to handle that information.”

Sometimes diversity management means treating the thin-skinned with kid gloves. But it also means you have to grow a pretty thick skin yourself, because it’s just as fashionable to knock the concept as praise it.