Business Performance
6.3. F INDINGS FROM THE S URVEY OF C OMPANIES
Evidence from our survey of companies makes a useful contribution to the analysis of the strength and nature of the business case for diversity. First, it provides an insight into why companies in the EU invest in diversity. In other words, it highlights the rationale for investment, as well as the costs and benefits. The nature of the rationale for an investment can help identify the nature of evidence needed to help convince other companies to consider it. Our evidence also provides opinions as to the relative importance of the different types of evidence that constitute the business case.
6.3.1. Reasons for Investing in Workforce Diversity Policies
Our survey identified some of the reasons why companies invest in workplace diversity policies (Exhibit 43). The most important reasons are:
• To comply with regulatory requirements (81%); • To respond to changes in wider social values (80%); • For ethical reasons – it is the right thing to do (80%); • To upgrade the quality of employees (77%).
41 ‘Accounting for People’, consultation paper issued by the UK Task Force on Human Capital Management, 2003. This group is also known as the ‘Kingsmill Task Force’.
Exhibit 43
Three factors stand out from these responses. First, regulatory issues are clearly important. A significant number of companies have introduced some form of diversity initiative in response to regulatory requirements. Ethical factors also appear to play a part although this may reflect the impact on companies of changes in social attitudes. Governments, politicians, and civil society groups have urged companies to become more responsive to the views of citizens about social and environmental practices. The final point confirms this, in part. The behaviour of companies appears to take account of the socio-cultural environment in which they operate. This may be due to factors such as the need to recruit talented staff, the importance of maintaining corporate reputation, and the opportunities to compete in markets dominated by governmental institutions.
0 20 40 60 80 100
To satisfy investor interest in intangible assets and risk management To penetrate new market segments To respond to increasing levels of competition To respond to employees' concerns about equality of opportunity To respond to the need to enhance corporate reputation To overcome recruitment difficulties To upgrade the quality of employees For ethical reasons - it is the right thing to do To respond to changes in wider social values To comply with regulatory requirements
% of companies identifying reason as important
Companies with Active Diversity Policies
Reasons for Introducing
Base: Companies with active diversity policies Source: CSES Survey of Companies
Whilst in overall terms, companies of different types have similar reasons for investing in workplace diversity policies there are some differences of emphasis. Manufacturing companies place greater emphasis on ethical reasons, whilst service sector companies cite increasing levels of competition as an important reason (Exhibit 44).
Exhibit 44
There are also differences between companies of different sizes. Smaller companies stress compliance with regulatory requirements and a desire to satisfy investor interest in intangible assets and risk management to a greater extent than larger companies (Exhibit 45).
0 20 40 60 80 100
To satisfy investor interest in intangible assets and risk management To penetrate new market segments To respond to increasing levels of competition To respond to the need to enhance corporate reputation To respond to employees' concerns about equality of opportunity To overcome recruitment difficulties To upgrade the quality of employees To comply with regulatory requirements To respond to changes in wider social values For ethical reasons - it is the right thing to do
% of companies identifying reason as important
Companies with Active Diversity Policies
Reasons for Introducing – by Sector
Base: Companies with active diversity policies Source: CSES Survey of Companies Manufacturing
Exhibit 45
6.3.2. Evidence Needed to Justify Investment
Our survey also explored the additional evidence that companies believe would be useful for them to justify investment in active workplace diversity policies.
Amongst companies who have already introduced active diversity policies, there is a belief that detailed discussions with other companies who have already invested in such policies, testimonials from other business leaders, and surveys of companies showing costs and benefits would have been most value in helping to justify investment (Exhibit 46).
0 20 40 60 80 100
To satisfy investor interest in intangible assets and risk management
To penetrate new market segments To respond to increasing levels of competition To respond to the need to enhance corporate reputation To respond to employees' concerns about equality of opportunity To overcome recruitment difficulties To upgrade the quality of employees To respond to changes in wider social values To comply with regulatory requirements For ethical reasons - it is the right thing to do
% of companies identifying reason as important
Companies with Active Diversity Policies
Reasons for Introducing – by Size
Base: Companies with active diversity policies Source: CSES Survey of Companies Large (100+ employees)
Exhibit 46
Service sector companies and smaller companies (50-99 employees) would also value detailed case studies about other companies who have invested in active diversity policies.
There are some slight differences of emphasis amongst companies who have yet to introduce active workforce diversity policies. They would place the greatest value on surveys of companies showing costs and benefits and on detailed case studies about other companies who have invested in active diversity policies.