Failing to embrace diversity damages bottom line, businesses warned

Jun 29 2005 by Nic Paton Print This Article

Diversity is not simply about being politically correct or trying to reflect society, but is something that can bring clear benefits to a company's bottom line, organisations have been told.

A study by the UK's Race for Opportunity group has found 91 per cent of organisations now say they have a clear business case for diversity, compared with 78 per cent reported last year.

The group chairman, Royal Mail chairman Allan Leighton, urged businesses not to separate issues of race and organisational development.

"Gone are the days when private and public sector organisations could ignore ethnic minorities in this country," he said.

"I challenge all chairs of boards and chief executives to champion for race on behalf of their organisation. UK plc has to reflect the ethnic diversity in this country and this action has to come from the top down," he added.

Yes, diversity was about reflecting contemporary society, but it was also about winning on the bottom line, he stressed.

"The ethnic minority population in the UK has an annual disposable income spending power of £32 billion. Cater effectively to this sector and you will see rewards on the bottom line," he said.

Of 113 private and public sector bodies surveyed, 40 indicated an estimated £13.3 billion in profits could be attributed to the impact of their activities around race.

Its findings echo that of a study by the Chartered Institute of Personnel and Development in May, which argued that a badly managed diversity programme can cause as much damage to a company's business performance as ignoring the issue altogether.

In the UK, the financial sector led the way in terms of action on race and had developed a range of innovative schemes, said Race for Opportunity, including financial programmes that conformed to the requirements of Islamic law.

Lloyds TSB was judged as best performer overall, with West Bromwich Building Society, HSBC Bank, Royal Bank of Scotland and Barclays all featuring in the top ten.

The British army topped the public sector list, with the Royal Air Force, Royal Navy and the West Midlands Police all making it into the public sector top ten.

By the end of this decade ethnic minorities would account for more than half the growth in Britain's working age population, said Race for Opportunity.

Director Sandra Kerr said business attitudes to diversity had changed markedly over the past decade.

"Ten years ago many organisations in both the private and the public sector would ask us why there should be a need for diversity, now newcomers to the network can see the benefits of diversity and are asking how they can improve their performance in this area," she said.