Diversity Policies Can Help Business Says Report for Commission
Date: 12-11-2003
Companies who implement diversity policies - that is policies that seeks to encourage a mix of races, sexual orientations, religions, physical disabilities, ages and sexes within the workplace - can expect benefits in the short and long term. These are the results of a new report, carried out for the European Commission. "The Costs and Benefits of Diversity" report points to short and medium term benefits, such as improved cash flow through resolving labour shortages, opening up new markets, reducing costs and improving performance in existing markets, as well as long term benefits, including building a differentiated reputation with key stakeholders and customers and improving the quality of human capital.
"This study shows that introducing legislation on non-discrimination within Europe is not just a question of principle but is good for business as well" said Anna Diamantopoulou, Commissioner for Employment and Social Affairs. "I hope that companies will take this on board and that Member States will do their part in adopting national legislation to implement the two European Directives on non-discrimination as soon as possible."
Some 69 percent of companies interviewed for the report said that diversity policies had enhanced their corporate reputation. And 62 percent said that these policies had played a part in helping to attract and retain highly talented personnel. Just under 60 percent said that diversity in action had improved motivation and efficiency (58 percent), increased innovation (57 percent), enhanced service levels and customer satisfaction (57 percent), and helped overcome labour shortages (57percent).
The report recognises that making the case for the positive impact of diversity for business is still in its early stages, due to the limited numbers of what the report calls 'pioneering' companies who have taken up this practice. The measurement of the impact of diversity policies in the workplace is still not refined and definitions of 'a diverse workplace' remain difficult to pinpoint. Nonetheless, it states that there is already "an emerging business case for diversity".
The motivation for introducing diversity policies is clear, according to the report. There have been major changes in product, labour and capital markets, meaning changes in the attitudes of customers, personnel and investors. In addition, government influence, in the form of legislation, and wider social values, in the form of citizens' expectations of companies, are also changing.
Two major 'internal' obstacles (for example within the company) that limit investment in diversity were identified by the report: difficulties in changing the culture of a business and a lack of awareness of workforce diversity policies. The report concludes that public resources and programmes can help to address the second difficulty, but can have little impact on the first.
The Commission intends to address this 'awareness gap' in many EU companies, particularly small and medium sized enterprises, through a variety of initiatives such as the 'For diversity - against discrimination' programme launched by Commissioner Diamantopoulou earlier this year. A list of good practices will also be drawn up by the Commission in 2004.
'External' obstacles also remain, according to the report, including legal restrictions on holding and processing sensitive information on individuals and social groups in areas such as ethnic origin, religion and sexual orientation.
The report was based on a survey of 200 companies in four European Union countries, the results of eight case studies of diversity promotion programmes in six EU countries, 48 interviews with directly related organisations such as trade unions, businesses, national governments, equality agencies and non-governmental organisations.
Two Directives on non-discrimination were adopted in 2000 - on racial and ethnic equality and equality in the workplace. For the first, only 7 Member States implemented the Directive fully by the 19 July deadline and the Commission is in the early stages of launching infringement procedures against the rest. For the second, although there are still some weeks to the deadline (2 December 2003), it is the Commission's understanding that only two Member States have legislation in place at this time.
For more information on the 'For Diversity - Against Discrimination' campaign, go to http://www.stop-discrimination.info/
The text of the study is available on: http://europa.eu.int/comm/employment_social/fundamental_rights/prog/studies_en.htm