Leadership is needed to make diversity a top priority
There has never been a more important time to talk about inclusion and diversity. The CBI believes this remains one of the defining issues of our age. How we make ours an economy for everyone and use this as a source of advantage for the UK. Of course, this is about fairness, a very important word in today’s environment. But it’s also about hard-nosed competitiveness.
We have Justin Trudeau, Canada’s prime minister, describing diversity as Canada’s number-one competitive advantage in the coming years. It should also be ours. It should be up in lights in the new Industrial Strategy and we have said so in the CBI’s response last week to Greg Clark.
The business case for diversity and inclusion is rock-solid. Firms with the highest levels of gender diversity are 15% more likely to outperform their rivals, while those with the highest levels of ethnic diversity are 35% more likely to do so.
But it’s time for a reality check. Progress towards inclusive workplaces is still just too slow. And we’re not just talking about gender, it’s every kind of diversity – including ethnicity, social background disability, sexual orientation and age. In 2015, one in eight of the working-age population were from a BME background yet BME individuals make up just 10% of the workforce and hold just 6% of top management positions in the FTSE 100.
At 25, people from low-income families will earn on average just under £2 less per hour than their peers from wealthier backgrounds.
And despite the fact that one in five of us are likely to develop a disability while of working age, the percentage of disabled people in work is 34 percentage points below that for non-disabled people.
And less than 5% of FTSE 350 CEOs are women.
We need to use what we know works and make it the norm in all our businesses. Not as a footnote to other priorities, but as a top strategic priority for our country.
Today we’re heading into a perfect storm of three seismic changes in demographics and technology that will make talent the number-one worry for our firms. For many, of course, it already is. Whatever the impact of leaving the EU, there are likely to be fewer EU migrants coming to work in the UK than in the past. At the same time the UK’s domestic labour force is shrinking as the baby boomers retire. And third, we need new skills in our economy as the next digital technology wave of AI and automation gets under way. The sum total is a challenge and an opportunity that we need to seize and address with both arms.
A large part of the answer lies in reaching deeper into the talent pools of our country, expanding the inclusiveness of our workplaces. Government has a role, but this is mostly down to us.
Since last year, there have been three outstanding reports, led by four outstanding business leaders, on what needs to change. The CBI supports all the business-facing recommendations in these reports and will back them fully. And we call on all CBI members and all businesses in the UK adopt them. It’s not easy, it’s hard graft and the CBI can help.
It isn’t a question of only changing the picture on boards or of a focus on one group. It’s about building inclusive workplaces that harness the best innovation and productivity the British workforce can offer because people feel accepted, supported and have opportunities to thrive.
We of course know that real change will take more than stated commitment. Leadership is the key. It is the constant action, worrying, questioning, suggesting, frankly nagging, of leaders that makes the biggest difference.
It’s because progress is about no one thing, no silver bullet. It’s about questioning an all-white shortlist, the exit interview with the young gay man who says he felt he didn’t belong, the introduction of nameneutral CV filtering. No one thing. It takes leadership, constant and unflinching.
And here we have a worry. At times of great change – and we are most certainly in one as we face Brexit, technological upheaval, political instability – priorities compete and things can go backwards. It can be too easy to let things slip down a list, perhaps even to seek comfort in the familiar, people like you and not different from you.
In tougher times, a search for experience might well end up being a search in a traditional pool, closing the door to greater inclusion. Only committed leadership can win against this and is why it matters so much.
There are so many great examples of how to do this.
The consultancy Mercer, for example, has established a Diversity and Inclusion Council which meets separately to give inclusion the attention it deserves.
Dwr Cymru/Welsh Water worked with Stonewall on how they could change the image of the water sector to attract and retain more LGBT colleagues.
Fujitsu have made inclusion part of their training for new managers, while Pets at Home redesigned store manager roles as part-time or job share positions to help more talented women move up the ranks.
And EY have removed academic criteria from its graduate and schoolleaver programmes and instead assess potential hires on their strengths and competencies.
These are simple changes with big effects. For the CBI, we will continue to make this one of most our important priorities. We urge all leaders, in all parts of business, to do the same. And make sure we go forwards in this next period of change, as I know we can.
Ian Price Wales. is director of CBI