A diverse workforce, with a balance of white and ethnic, male and female, able and disabled, is not just tedious political correctness. It is essential to vibrant business performance, says Duncan Brown

Have a look at the people with whom you work. How many are of the opposite sex and from different racial and cultural backgrounds? How many are disabled? What’s the mix in terms of age and domestic circumstances?
In too many organisations there is far less diversity than is the case outside, in society and among their potential customer base. Unemployment among ethnic minorities is two and a half times that of the UK white population and there are a million disabled people who want to work.
Females remain concentrated in lower-paid occupations and roles such as nursing and checkout operators, with a stubborn persistence of an average pay gap with men of almost 20%.
Just 6% of the workforce in engineering and technology is female, while there are more ‘Lords’ and ‘Sirs’ than women on the boards of our largest quoted companies.
Yet we have had equal pay legislation, race and sex equality laws since the 1970s, which have been extended to cover disability, religion and sexual orientation, with age discrimination legislation coming in next year.
By the late 1990s, two-thirds of employers had an equal opportunities policy to ensure adherence to these laws.
So what’s gone wrong? Why the persistence of these inequalities?
Some believe the answer lies in more powerful enforcement, and a new integrated Commission for Equality and Human Rights is in the process of being formed.
Yet the CIPD’s research, Discrimination and the Law, indicates that there are limits to what legislation and corporate policy can achieve when discrimination is ultimately about our individual attitudes and behaviour.
We need to move away from an approach that tries to enforce equality from the outside to one that recognises, values and promotes diversity and difference at work.
Oh, “here we go again”, I hear you say. The politically correct, jargon-obsessed do-gooders in HR coming up with another new initiative with no relevance to the performance of the organisation. Well no, actually, the shift under way towards a diversity approach in some of our leading employers is all about delivering real change and business benefits.
According to Gill Dawson, group diversity manager at HBOS: “We’re confident that through diversity we make a difference to the way we do business and our employer proposition”. While Ford believes that “any company that wants to be successful needs to understand the diverse society in which it operates and must develop its own diverse talent”.
So how does diversity make a difference to the bottom line? Our research highlights three main ways. First, diverse teams are more creative and innovative, a vital requirement in our fast-changing times, when today’s Tesco can rapidly become tomorrow’s Morrisons.
Second, with almost 90% of employers reporting recruitment difficulties in the CIPD’s latest survey, and some major retailers apparently leafleting competitors’ employees, firms simply have to develop new sources of labour and talent. By 2010,
only 20% of the UK’s workforce will be white, male, able-bodied and under 45.
B&Q’s well-publicised success in employing older workers may be helping to solve the nation’s pensions crisis, but has also proved hugely beneficial in cutting vacancies and employee turnover costs. Ditto Asda’s numerous flexible working initiatives, which have saved it an estimated £4m.
Third, as customers we all like to be treated as individuals by employees who understand our needs. Retailers are finding that a more diverse workforce is more effective at opening up and servicing key segments of the market.
There are nine million disabled people in the UK, for example, with a spending power of £80bn. Marks and Spencer has worked with charity DisabledGo to increase both its employment of disabled workers, and to better service this market. The information for disabled customers on its web site now receives 250,000 visits a month.
So what’s the potential return on diversity in your organisation, and what are you doing to deliver it?
n Duncan Brown is assistant director general, Chartered Institute of Personnel and Development