Diversity pays

2004

Business leaders who fail to recognise the business case for racial diversity are likely to suffer both commercially and in terms of brand reputation, according to the Race for Opportunity (RfO) fourth annual benchmarking research.

The report reveals that almost eight out of ten (78 per cent) of organisations have a clear business case for race – over double the 38 per cent figure for 2001 and a significant increase on 2003’s 63 per cent.

More than four out of ten (43 per cent) are already reporting a measurable impact on their bottom line and two-thirds say that their work on diversity is good for brand reputation.

The report also revealed that the organisations surveyed (employing 1,614,893 people – approximately 5.7 per cent of the working population) are spending £53 million on race and diversity – an average of £33 per employee.

Allan Leighton, RfO Chairman, warned that organisations that do not embed diversity into their business strategies will lose their competitive edge.

“Companies need to recognise the communities in which they are operating from board level down,” he said. “By failing to do so they are limiting both the talent pool from which they recruit and promote, and the customers they target through their marketing.

“Progress on race is underway but there is no room for complacency. Our report clearly shows that diversity is good for business but organisations must stay focused and continue to measure and evaluate the strategies they are implementing.” Race for Opportunity, a national business network of over 180 private and public sector organisations across the UK, ranks telecoms giant BT as this year’s top performer.

Lloyds TSB Group, the West Bromwich Building Society, the Army and HSBC Bank make up the rest of the top five.

Pearson and the Royal Mail Group are the most improved organisations in the private and public sectors respectively. Yorkshire Water is the best private sector newcomer and the Royal Navy the best newcomer in the public sector.

Of the organisations surveyed, those with sustainable race and diversity strategies all have clear leadership on these issues at senior levels within their organisation.

More than eight out of ten organisations have a Board-level champion, and although there has been a slight decline in the number of organisations obtaining Board-level sign-off for their strategies on race, there are indications that those organisations that do are improving their effectiveness.

Organisations are also increasingly engaging line managers with the race component of their diversity strategy. Almost eight out of ten say their managers understand how the business case relates to their part of the organisation.

Strong policies are underpinning organisations’ strategies on race – almost nine out of ten say that these policies are integral to managing employees and not just driven by human resources. And eight out of ten organisations state that they have a clear action plan on race linked to business objectives, a rise of more than 15 per cent on 2002.

More marked still is the increase in organisations shaping their marketing activities to understand and engage different customers, rising from two-thirds in 2001 to an overwhelming 94 per cent in 2004.

Nine out of ten organisations now regularly review advertising and promotional materials to ensure they reflect their commitment to race equality, both in the content and images used. And eight out of ten say that differences in language and culture are taken into account when targeting customers.

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