The Business Case for Diversity
The bottom line for every business is profitability (and even 'lifestyle' businesses must make a profit if they are going to survive). Since it is never enough just to break even, every action and activity in a business must be justified in terms of its contribution: Actions around Equality and Diversity are no different. Unfair discrimination (see Q&A for a definition) can have a significant cost if it leads to a judgement against a company so there is automatically a business case for compliance with equality legislation. Diversity, on the other hand, is not a defined legal requirement so compliance isn't necessarily an issue. So, is there another reason for employers to expend time and energy focusing on diversity at all?
The most basic 'common sense' business case is generally made in respect to innovation and creativity: it stands to reason that the greater the diversity amongst staff the wider the range of ideas they'll come up with when set to work on finding solutions to problems or brainstorming new ideas for the business. When you apply this same 'common sense' approach to any other Business Driver you will come up with similar results: more diversity equals more ideas and better solutions.
In July 2007 the Equality Authority published "The Business Impact of Equality and Diversity: The International Evidence". (Click on title or here to download.) Researched by Dr. Kathy Monks, this very readable review of international best practice examines the relationship between workplace initiatives on equality and diversity and overall organisational performance. It makes a compelling case for businesses to invest in equality and diversity.
The key point of the review is to show how an emphasis on equality and diversity can benefit a business. The results are best explained in the following diagram developed by Prof. Monks to illustrate her research:
Dr. Monks makes a general case, but what are the specific ways equality and diversity can enhance the bottom line? The sections below provide a variety of insights into the business potential of diversity.
The 1st panel below introduces two companies from Co. Louth that stand as testimonies to the power of diversity. The 2nd panel contains a checklist that allows you to identify opportunities for developing equality and diversity as a mind-set in the business and for evaluating your performance as a company. The 3rd panel provides links to two videos that help explain the commercial benefits of Diversity & Equality.
Two Louth based businesses have proven especially adept at benefiting from the diversity of their respective employees. Bradley's Pharmacy and CTR Kitchens are two highly successful examples from the retail and manufacturing sectors. Click on the tabs below to find out more about each company and how 'Diversity' has given them a competitive advantage.
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Bradley's Pharmacy Also Blackrock, Carlingsford, Drogheda, Dunleer and other locations. |
Bradley's Pharmacy is a retail chain that extends up and down most of Ireland's east coast with five stores in County Louth alone. Jennifer Gavaghan, the General Manager, believes diversity is a major factor in the company's success story. Bradley's has been at the forefront of the sector in innovation and change and is recognised as one of the leading pharmacy groups in the country. According to Jennifer company has a long tradition of progressive thinking and has been willing to risk change in order to develop the business. The company has for many years provided significant opportunities for young people by providing work-placement opportunities for colleges across the region. Many of the people who did their work-experience at Bradley's were able to move into employment bringing with them fresh ideas and perspectives both from their college experience and also from their personal backgrounds. Throughout the 'noughties' Bradley's also provided work and career opportunities for many of the immigrant worker coming to Ireland as part of the Celtic Tiger boom. These workers were encouraged to share ideas and experiences and to identify ways they could make a special contribution to the business. The Dispensing Chemists are the natural leaders in the store and Bradley's chemist come from around the world. To tap into this breadth of insight and experience Jennifer required them each to present a new idea a month to improve their store and, if possible, the group. The range of ideas presented by this group has been tremendous and the competition fierce. They constantly challenge each other to see who can be the most imaginative and most effective in delivering results. The success of this initiative in the dispensaries has led Jennifer to push the idea out to the shop fronts--the real retail units. Staff in the Front of store are also very diverse and represent people and countries around the globe. These diversity of these staff has contributed in a number of significant ways. Staff with European first languages have been able to act as translators and interpreters, particularly for the chemists and have allowed Bradley's to attract a major share of the immigrant/migrant workforce into their customer base. Employee suggestions have also lead to new product lines and additional services including items specifically targeted toward people of African origin and descent. In this short video clip Jennifer explains how their innovation and idea generation plan works as well as the benefit of having their own translators and interpreters: |
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CTR Manufacturing Ltd. |
CTR Manufacturing is owned and managed by Margaret Reilly, herself a cabinet maker by trade and one of the few women who 'did her time' as a FÁS apprentice. Margaret's own success story involves a businessman who was willing to look beyond stereotypes and give a young woman an opportunity to prove she could be successful in what was unquestionably considered a "man's" job. CTR was recently selected by the Louth County Enterprise Board as the best manufacturing business in the county for the 2nd straight year. After completing her apprenticeship Margaret quickly found full time employment and proved her ability not only as a cabinet maker but also as a sales person. By 2008 she was securing more than €1.5 million in sales for her employer and she decided then she had what she needed to set out on her own. Encouraged by her Zimbabwean partner, she set out to build a 'construction' sector business at a time when developers and builders were going out of business at a frightening rate. Together they pulled together enough funds (cash, loans and grants), found a building and set up shop. She recruited a small team that included Irish, Poles and Latvian joiners who were interested and willing to put in six weeks of hard work without pay to get the company off the ground. Today that team, and all their diverse skills, give the company the flexibility they need to service customers from all aspects of the trade--from the large developers right through to the odd-jobbing sole traders. They are equally able to produce the highest quality bespoke kitchens or the basic flat-pack cabinets. Margaret says the strength of her company is the diversity of it's workforce. The workers are not only from different parts of world but have different levels of education, different skill sets and different abilities. Although everyone can be innovative on their own she purposeful pulls everyone together whenever she has a n order or issue where she needs ideas. Together the team brainstorm to generate ideas to help specific customers or ideas to help move the business forward. In the following video Margaret tells us about the company and provides insight into the difference diversity makes to a business: |
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Business Drivers are those factors that drive profit making in a particular business. Although many factors or 'Drivers' are shared some are unique to a business or a sector. Key questions to ask yourself when trying to identify the drivers for your business are:
- Why does the business make money?
- What brings customers through the door?
- What key products dominate the sales figures and why?
- What is the reputation of the business?
The drivers below are common to many businesses and many are addressed in business plans presented to Enterprise Boards or banks when looking for financial assistance. To use these tables select a driver from one the tabs below. Use the table within the tab to ask questions about your business--the answers can be quite illuminating both in terms of showing you how much (or how little) attention you are paying to equality and diversity in the business, but also in highlighting general areas that lead to very company specific opportunities. To get the most out of these questions it is better to form a team (as diverse as possible) and look at them together.
- Sales & Marketing
- HR
- Finance
- Operations
- R&D (Innovation & Creativity)
- IT
- Strategy & Planning
- Products and Services
- Social
- Environmental
Sales & Marketing |
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Our company’s Equality & Diversity policy … |
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Supports dynamic customer access and interface |
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Policy: We ensure access to facilities (sales space, amenities, etc.), products and access to sales people to all of our customers regardless of ability / disability, language barriers or across cultural barriers. Our dynamic approach combines fixed mechanisms (such as policies, structural design (e.g. wheelchair ramps)) and ad hoc responses by staff according to the need presented. |
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Evidence: Design standards of our facilities, layout, signage, products, training standards for staff, customer comments, etc |
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Measurement Areas: Increased (foot) traffic, sales, reduced complaints, increased customer satisfaction |
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Uses experience to inform on-going customer care training |
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Policy: We apply what we learn from our customers when solving day to day customer problems, from feedback to up-selling and other sales techniques, etc. and update our training programmes in order to make us even more effective in selling to a diverse customer base |
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Evidence: Sales reports and product trend analysis, customer comments and other feedback, staff briefing notes / meeting agendas or minutes, training standards |
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Measurement Areas: Increased (foot) traffic, sales, reduced complaints, increased customer satisfaction |
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Expands our customer base |
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Policy: We capitalise on the diversity among our staff to develop product ideas or marketing techniques that appeal to a wider or different market / customer base. |
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Evidence: Staff records, meeting agendas / minutes, suggestion programme records, purchasing requests, stock lists, marketing design and finished material |
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Measurement Areas: Customer analysis, increased (foot) traffic, sales reports, customer comments, customer requests, increased customer satisfaction |
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Appeals to our market |
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Policy: We use our equality and diversity position as a lever to enhance our company image or brand. |
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Evidence: Marketing materials, corporate level awards, publicity, web content, customer comments, press ratings, consumer guides, etc. |
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Measurement Areas: Customer feedback, market analysis |
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Enhances our market position. |
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Policy: We use our equality and diversity position, directly or indirectly, to capture a larger market share. |
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Evidence: Sales trends, market reports |
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Measurement Areas: Customer feedback, market share analysis, consumer reports |
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Enhances our status within the marketplace |
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Policy: We use our equality and diversity position to add substance and credibility to award nominations, as part of national and international standards packages and to all our community based programmes / initiatives. |
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Evidence: Industrial or sectorial award nomination packages, standards and ratings applications and assessments, community based news and awards, press releases, supply chain audits |
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Measurement Areas: Feedback on submissions, receipts of awards and standards, etc. |
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Adds to our competitive edge |
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Policy: We have specific plans, policies and procedures for applying our equality and diversity position toward creating a competitive advantage. |
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Evidence: Strategic planning documents, AGM minutes and reports, internal communications / memorandums, marketing plans and guidelines, promotion drafts, etc. |
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Measurement Areas: Competitor analysis, market share analysis and trends, supply chain audits |
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HR |
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Our company’s Equality & Diversity policy … |
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Informs job descriptions and person specifications. |
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Policy: We ensure job descriptions and person specifications are not based on stereotypes; we use these documents to point us to the right person and the right characteristics. |
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Evidence: Job descriptions, person descriptions, recruitment records, employment statistics |
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Measurement Areas: Employee diversity |
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Informs advertising of vacancies. |
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Policy: We vet our job advertising to ensure the right people are not discouraged from replying. |
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Evidence: Job advertisements, CVs received, diversity reflected in applications and interviews |
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Measurement Areas: Employee diversity |
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Informs internal promotions |
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Policy: We promote for potential and not just for past performance. For us potential means adaptability to emerging markets and trends as well as maturing product lines. |
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Evidence: Strategic plans, policy documents, instructions for promotion panels, promotion records, etc. |
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Measurement Areas: Management diversity |
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Informs ‘performance enhancing’ policy development (i.e. Work-Life Balance) |
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Policy: We work to implement measures that improve productivity by releasing the pressure of concerns outside of employment as quickly as possible and allowing people to really focus on their work when work requires focus. |
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Evidence: Work-Life balance policy, procedures and measures |
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Measurement Areas: Employment records (attendance, absenteeism, sick pay, etc), employee suggestions, staff grievances, accommodation requests, feedback and appraisal documents, etc. |
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Is reflected in benefits provided to employees? (insurance, bonuses, pensions, etc.) (see also Finance) |
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Policy: We ensure all benefits are accorded to the position and not the person and that benefits are tailored to generate maximum impact for the individual. |
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Evidence: Records relating to benefits, contracts or Statements of Terms and Conditions of Employment |
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Measurement Areas: Employment records, employee suggestions, staff grievances, accommodation requests |
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Guides internal reviews of policies and procedures (work patterns, absences, instances of incapacity, etc.) |
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Policy: We ensure policies are applied according to merit on a case-by-case basis in order to maximise the impact and effectiveness of any personnel measures taken—there are no ‘cookie cutter’ responses to ‘individual’ needs. |
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Evidence: Policies and policy reviews, grievances, disciplinary records, personal productivity measures, etc. |
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Measurement Areas: Policy and procedure effectiveness, employment records, employee grievances, production records, quality records, etc. |
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Encourages employee participation in company based social activities |
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Policy: We encourage harmony among staff by being creative in team building, recreation and other activities. |
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Evidence: Records of events and participation, event committee minutes and records, Grievances, disciplinary records, team performance records, team and personal productivity measures, etc. |
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Measurement Areas: Event attendance and feedback, employee complaints or grievances, suggestion programme inputs, production records, quality records, etc. |
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Inspires opportunities (time and space) for personal expression and enhances morale |
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Policy: We encourage reasonable and responsible personal expression that balances individual rights with respect for others; we encourage open debate on opinions, honest exploration of fact and avoid political correct positions that stifle innovation and creativity. |
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Evidence: Employee satisfaction, morale indicators, product innovation, creativity, problem solving, grievances and complaints, disciplinary records, personal productivity measures, etc. |
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Measurement Areas: Morale and satisfaction, product innovation, problem resolution, employment records, employee grievances, production records, quality records, etc. |
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Moderates or mitigates management responses to individual issues as appropriate |
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Policy: We consistently evaluate the impact of management decisions on staff and strive to balance the needs of the many (including the long-term interests of the company) against the needs of the few. All staff decisions are taken with the future in mind. Diversity and equality are established as key long-term interests |
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Evidence: Internal reviews, supply chain audits, management meeting minutes, employment records, strategic plans |
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Measurement Areas: Employment records, employee grievances, production/productivity records, quality records, etc. |
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Finance |
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Our company’s Equality & Diversity policy … |
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Influences financial decisions (productivity vs. bottom line cost) |
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Policy: We recognise the cost of creativity, innovation and opportunity and the implicit importance of individual contributions in these areas toe overall success of the business. We constantly evaluate contributions, current and potential, and weigh financial decisions accordingly. |
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Evidence: Corporate accounts (daily, weekly, monthly, annual), employment related financial records (including individual performance and cost analysis such as ‘profit per employee’), planning documents, cost analysis, performance trends and forecasts, etc. |
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Measurement Areas: Profitability trends and forecasts |
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Allows us to place a premium price on our product |
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Policy: We use our Equality & Diversity position to add value to our goods / services and to lever higher prices from the marketplace |
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Evidence: Market analysis, pricing strategies, brand recognition and association, tendering, etc. |
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Measurement Areas: Customer opinion, market opinion (includes competitors, supply chain, alliances, etc.) |
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Allows us to optimise our volume |
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Policy: We use our Equality & Diversity position to create broader demand for our goods / services |
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Evidence: Market analysis, order analysis, customer feedback |
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Measurement Areas: Preferred provider status, special requests and orders, etc. |
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Enhances our cost effectiveness |
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Policy: We use our Equality & Diversity position to generate a broader range of ideas and initiatives for reducing or optimising costs of sales. |
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Evidence: Internal reviews and audits, annual accounts, continuous improvement programme records, management meeting minutes, suggestions, strategic plans |
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Measurement Areas: Target related performance trends, process improvement, etc. |
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Operations |
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Our company’s Equality & Diversity policy … |
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Informs the design of production / operations related facilities and equipment |
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Policy: We consider Equality & Diversity related issues when planning upgrades to facilities and equipment (including issues such as access requirements, ease of use, Hygiene & toileting, special dietary requirements, additional space requirements, etc.) |
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Evidence: Internal reviews and audits, strategic plans, facility reviews and plans |
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Measurement Areas: Performance trends, process improvement, productivity and utilisation rates. |
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Facilitates clarity in all internal communications |
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Policy: We monitor all our communications, internal and external, to ensure our messages are never lost, confused or left unclear because of differences in perspectives relating race, religion, ethnic origin or other significant aspect of diversity |
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Evidence: Quality reviews, incident investigations and reports, site safety records, grievance and disciplinary records |
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Measurement Areas: Performance trends, wastage, rework, etc. |
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Implementing technology |
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Policy: We consider the impact of difference when introducing new technologies to the workplace |
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Evidence: Internal reviews and audits, continuous improvement programme records, management meeting minutes, suggestions, strategic plans |
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Measurement Areas: Rework, productivity, cost efficiency. |
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Influences the selection of mentors and advisors |
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Policy: The ability to recognise and understand of the impact of Equality and Diversity on interpersonal communications and relations ships is a key criteria when selecting, appointing and training mentors, business advisors and in-company trainers. |
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Evidence: Personnel plans, advertisements, position criteria, position / performance evaluations, etc. |
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Measurement Areas: Learning retention and implementation, process improvements, etc. |
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Influences the training of trainers |
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Policy: We incorporate Equality & Diversity into all training for trainers including formal training courses and on-the-job training |
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Evidence: Training plans and records, calls for tender, trainer specifications |
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Measurement Areas: Training participation, learning retention and implementation, process improvements, etc. |
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R&D (Innovation & Creativity) |
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Our company’s Equality & Diversity policy … |
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Is a determining factor in defining the make-up of design and innovation teams |
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Policy: We choose team members for the breadth of experience, insight and perspective they can bring to bear on any given project, task or problem. We recognise the value of both traditional and non-traditional thinking and therefore work to increase the diversity of our contributors. |
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Evidence: Team rosters, instructions and outputs |
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Measurement Areas: product or service innovation |
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Drives ‘blue ocean’ type conceptual thinking |
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Policy: We understand that ‘old thinking’ does not spawn new ideas. We continually work to allow every person in the company to be part of our ‘idea factory’ and to contribute to our future. |
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Evidence: Team assignments, suggestions, process and product improvement recommendations, rewards and incentives programmes, etc. |
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Measurement Areas: Product and service innovation, new markets, wider market space, etc. |
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IT |
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Our company’s Equality & Diversity policy … |
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Informs system design |
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Policy: We ensure all our IT systems are adaptable. We use technology to encourage access, participation and contribution |
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Evidence: IT Strategy / plans, purchasing specifications, etc.. |
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Measurement Areas: Productivity, reliability, efficiency, communications, etc. |
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Informs equipment and software decisions |
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Policy: We challenge suppliers to prove the accessibility and adaptability of their product / system and tap into our diversity to trial new equipment, programmes and services. |
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Evidence: Product specifications, test results, communications records, requests for tender, etc. |
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Measurement Areas: Employee satisfaction, morale, efficiency, purchasing effectiveness |
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Forms the cornerstone of accessibility (user friendliness) considerations |
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Policy: We understand that a person’s ability to make a contribution depends upon their access to information, communication, learning, tools and equipment. |
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Evidence: Product specifications, test results, communications records, requests for tender, etc |
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Measurement Areas: Employee satisfaction, morale, efficiency, purchasing effectiveness, personal performance |
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Strategy & Planning |
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Our company’s Equality & Diversity policy … |
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Is a determinant composition of decision making teams |
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Policy: We choose team members for the breadth of experience, insight and perspective they can bring to bear on any given project, task or problem. We recognise the value of both traditional and non-traditional thinking and therefore work to increase the diversity of our decision makers |
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Evidence: Team rosters, instructions, personnel records, awards and recognition |
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Measurement Areas: Innovation and creativity, problem solving, in-house solutions. |
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Is used to expand options and opportunities |
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Policy: We view Equality & Diversity as a source of new and different opinions, as a means to achieve clearer and broader interpretation of facts |
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Evidence: Internal communications, meeting minutes, personnel records, etc. |
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Measurement Areas: Problem solving, in-house solutions, reputation within the sector, perceived value |
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Is a source of creativity and innovation |
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Policy: We view Equality & Diversity as a portal to greater ingenuity and as a means to broaden our perspective of our Product, Market and Systems |
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Evidence: Meeting minutes, internal communications, product specifications, product improvement records, marketing strategies, suggestion programmes, personal appraisals, etc. |
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Measurement Areas: R&D output, patents, Product innovation, leading market position, market share, market niche, development costs, etc. |
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Results in new approaches and ways of thinking |
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Policy: We reflect our approach to Equality and Diversity in changes to products, our customer base and our systems. |
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Evidence: Meeting minutes, internal communications, product specifications, product improvement records, marketing strategies, suggestion programmes, personal appraisals, etc. |
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Measurement Areas: Product differentiation, increased demand, market share, market niche, development costs, etc. |
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Product |
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Our company’s Equality & Diversity policy … |
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Facilitates product differentiation |
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Policy: We capitalise on the diversity of our staff to set our products apart from those of our competitors |
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Evidence: Meeting minutes, internal communications, product specifications, product improvement records, marketing strategies, suggestion programmes, personal appraisals, etc. |
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Measurement Areas: Product differentiation, increased demand, market share, market niche, development costs, etc. |
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Improves our products / services. |
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Policy: We tap into the creative genius of diversity in order to expand the application of our products and services, to adapt our products to alternative markets or to identify improvements and upgrades to our existing products / services. |
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Evidence: Internal communications, meeting minutes, product reports, product improvement records, marketing plans and strategies, promotions, marketing and promotional materials, etc. |
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Measurement Areas: Expanded market or new markets, increased market share, market niche, development costs, etc. |
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Results in the development of new products, services or markets |
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Policy: We tap into the creative genius of our diversity in order to develop new product ideas |
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Evidence: Product specifications, R&D records, etc. |
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Measurement Areas: New products or services, market niche, etc. |
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Social |
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Our company’s Equality & Diversity policy … |
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Guides our community involvement initiatives |
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Policy: We tap into the diversity of our staff to achieve a greater understanding of the communities our business operates in and supports; to add credibility our work in the local community and to make our community service more effective and generate a greater positive impact. |
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Evidence: Strategic plans, community relations activities and records, local demographics and related statistical information |
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Measurement Areas: Public perception of brand, corporate image in the community, compliance |
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Environmental |
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Our company’s Equality & Diversity policy … |
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Informs our environmental impact policies |
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Policy: We tap into the diversity of our staff to achieve a greater understanding of our environment; to add breadth and perspective to our understanding of the impact of our business on the environment, to understand how issues like climate change, energy consumption and pollution affect different groups and to provide us with a greater awareness of how are efforts are perceived among different sectors of the community. |
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Evidence: Strategic plans, product development records, environmental plans and impact statements, community related communications, publicity, staff suggestions, compliance measurement records |
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Measurement Areas: Public perception of brand, corporate image in the community, compliance |
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| The Business Case for Diversity : Video Links |
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Here are two on-line presentations about diversity that can be quite helpful to employers who are exploring the business case for diversity for themselves. Both of these can be found by 'googling' the 'business case for diversity' or simply by following the embedded links below. Video No. 1 : In this video presenter Ben Stone takes you through a discussion of what he sees as the key benefits of diversity for a business. Point 2, Competitive Advantage is particularly compelling. Video No. 2: In this video Joe Gerstandt discusses the definition of diversity and explains how all business have it and how it can be identified. Seeing the diversity already existing in a business can help open the mind of its leaders to being even more inclusive--particularly in relation to the 9 grounds. |
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The Business Case for Diversity & Inclusion from Ben Stone on Vimeo. |
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This resource was developed as part of the Addressing Institutional Sectarianism and Racism Project supported by the European Union's PEACE III Programme as awarded by Louth Peace and Reconciliation Partnership. |
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