Business case for workforce diversity

Diversity - a business imperative External drivers Internal drivers Areas of change l Diverse clientele l EU directives l Demographics l Attitude values l Diverse workforce/patients l Equality schemes l Legislation l Patient expectations l Relationship l Employee expectations l Culture l Employee relations World class service & ‘employer of choice’ Bottom line Productivity

The NHS context NHS Next Stage Review NHS Constitution Equality and Diversity Council Quality, Innovation, Productivity, Prevention (QIPP) Care Quality Commission

Why is workforce diversity part of core business? There are four main drivers for organisations: 1) Organisational reputation 2) Recruitment and retention 4) Productivity 5) Risk mitigation

Organisational reputation A good reputation attracts the best talent (from all communities) Valuing diversity signals an ‘inclusive’ environment – for potential staff and service providers As the largest employer, the NHS has a corporate responsibility to engage its whole community

Some statistics….. A Job Centre Plus survey, with 2000 respondents shows: 56% of customers would be more likely to use a business that has a diverse workforce 79% think it is important for businesses to have a policy on diversity in the workplace Both staff and customers think employers could be doing more to attract people from different backgrounds – in particular, female, disabled, ethnic minorities and older workers

Some statistics…….. 50% think businesses should be more proactive in improving workforce diversity 58% of employers claim currently to employ people from groups who traditionally find it harder to get jobs, such as lone parents, the long term unemployed or those from ethnic minorities

Recruitment and retention NHS needs to recruit and retain the best workforce A diverse workforce helps meet local health needs Backdrop of changing demographics - ageing workforce, generation Y More competitive labour market - plan to meet future workforce needs

Recruitment, retention and performance Did you know? IBM increased productivity by 30% by introducing flexible working Chartered Institute of Public Relations, 2006 The Civil Service found a positive link between workforce diversity, service delivery & knowledge of user population National Audit Office, 2004 An Aston University study found a link between good HR practices in NHS hospitals & lower patient mortality West. M. A., Guthrie, J. P., Dawson, J. F., Borrill, C. S., & Carter, M. R BT saves £3m a year on recruitment by retaining 98% of its women returners Women in the IT Industry, Towards a Business Case for Diversity, berr, 2006

Demographics and the workforce Facts: 3.5 million disabled people in work (ONS, 2008) 6% of population is LGBT (Talent not tokenism, EHRC, TUC, CBI, 2008) By 2020, UK’s ethnic minority population will be 11% (Equalities Review 2007) By 2030, half UK population will be 50+, one third over 60 (ONS 2006) Impact:  An increasingly diverse population will be entering the employment market  Employers need to use the full range of skills, experience and resources of a diverse workforce

Productivity Evidence shows diversity is key for high productivity, creativity, innovation and competitive advantage Valuing differences gets the best out of staff Strong correlation between high satisfaction levels for staff and patients

What the figures show A work-life balance strategy at London Borough of Camden reduced sickness absence costs by 2.5% Organisations with high gender diversity in top posts outperformed their sector on investment returns (McKinsey) Losing just one member of staff can cost an organisation £18,000 to replace (CIPD)

Risk mitigation Getting it wrong can be very expensive - complaints and legal challenges are damaging to your reputation Employment tribunals are time consuming and costly Organisations with an effective approach to diversity are more risk resilient

Counting the cost of tribunals The latest figures for tribunal costs (2007) show that 16% of claims related to sex, race or disability; 18% to equal pay It’s a costly business for employers:  race discrimination - average payout was £10,052, maximum payout was £123,898  sex discrimination – average payout was £15,059, maximum payout was £138,648  disability discrimination – average payout was £15,059, maximum was £138,658

Counting the cost of bullying & harassment The latest figures show bullying and harassment cost UK firms £13.75 billion a year (Unite 2008) Absenteeism, high staff turnover and reduced productivity, all contributed to this overall cost This equates to 33.5 million working days lost a year

The business benefits Quality, innovation, productivity and prevention: Organisational reputation – understanding different people and audiences, and providing a quality environment for care and work Recruitment and retention – attracting the best talent and innovative practices Productive workforce – highly motivated, cost effective, innovative and providing quality care Risk mitigation – prevention is better than cure

Business case for workforce diversity