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Business management

Inclusion, diversity and equality: what SMEs need to know

It’s a topic that’s on many people’s minds, but how can you ensure a sound approach to inclusion, diversity and equality?

Challenges around remote working in the pandemic and the prominence of Black Lives Matter mean inclusion, diversity and equality are centre stage. Morally, many business leaders think it’s imperative to do everything they can to build best practice into the workplace, and there are business benefits, too. As a business leader, what should you consider and what do you need to know?

Inclusion, diversity and equality explained

They are often used interchangeably. However, although closely linked, each means something slightly different.

  • Diversity refers to the demographic differences of a group. This can often reference protected characteristics in UK law such as age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, and sex and sexual orientation.

  • Equality means equal rights, opportunities and treatment are afforded to all. The 2010 Equality Act in the UK protects employees from being discriminated against for reasons related to protected characteristics. Equity also recognises that treating everyone equally can have shortcomings, when the playing field is not level. An equal approach emphasises that employees should not be treated in the same way on all occasions, but according to their own needs.

  • Inclusion is often defined as the extent to which everyone at work – regardless of their background, identity or circumstance – feels valued, accepted and supported to succeed at work.

Many employers focus on increasing diversity within the workplace. However, focusing on diversity to the expense of inclusion may mean that employees don’t feel comfortable being their true selves in the workplace or feel like their voice is not heard. It’s worth noting that improving diversity is more than a numbers game; rather, it’s about building an inclusive culture and environment.

According to research by the Chartered Institute of Personnel and Development, individual workplace inclusion is associated with positive team outcomes, reduced absenteeism and enhanced job commitment

In the same vein, to build an inclusive culture it’s important to think about equality, making sure all employees have equal rights and opportunities. Getting this wrong risks legal challenges, financial loss and reputational damage.

The benefits of creating a diverse and inclusive workplace
  • More and more employees, customers and investors are looking to business owners to take action to foster diverse, equitable and inclusive work environments. A company’s policies and practices on this can impact their ability to attract talent, customer loyalty and investor decisions.

  • Workplace inclusion is defined in a variety of ways and can be understood from an organisational and individual perspective.

  • At an individual level, workplace inclusion relates to staff feeling a sense of belonging, having a voice and being valued for their unique individual skills and abilities. According to research by the Chartered Institute of Personnel and Development, individual workplace inclusion is associated with positive team outcomes, reduced absenteeism and enhanced job commitment.

  • At an organisational level, workplace inclusion involves valuing difference, allowing all employees the opportunity to develop, participate and use their voice to drive change, irrespective of their background. The CIPD’s research found workplace inclusion at an organisational level links to enhanced team knowledge sharing, innovation and creativity.

  • What happens when it goes wrong? Sadly, there are a number of examples where employers have got things wrong and it’s resulted in both financial loss and reputational damage. There are no financial limits  or minimum length of service requirements in relation to discrimination claims, so getting this wrong is risky business for employers.

Top tips for creating an inclusive and diverse workplace

Create fair policies and practices

Establish clear and inclusive policies and practices that help employees to progress and participate in any decisions/changes that impact them. It’s important that policies are backed up by action and also well and regularly communicated with employees and line managers so all are really clear on their responsibilities.

This could range from diversity and inclusion policies to broader practices such as flexible working. Mentor recommends you review standard practices throughout the employee life cycle, such as recruitment, performance management and training, making sure risks of any unconscious bias are reduced and potential barriers for underrepresented groups are removed.

Educate line managers and employees

Both line managers and employees should have equality, diversity and inclusion training. The training should be regular, relevant and maintained. It’s important the training is robust and complements business policies and practices. There is a need for line managers to be role models for inclusion as their behaviour sets the tone for others. All employees, regardless of seniority, should be made aware of biases: how these can impact decision-making and engagement in the workplace, and of legal requirements under the Equality Act, including an understanding of what constitutes discrimination and harassment. Even seemingly innocent interactions, such as office jokes or banter, can have severe consequences for individuals and businesses.

Provide employees with a platform for their views

Ensuring all employees have a voice is central to inclusion. Create a culture of psychological safety, where employees are comfortable to share their views and put mechanisms in place to encourage this. Think about how your employees tend to express their views. Is it via informal conversations with managers, or more formal routes such as employee councils or trade unions? Employers should also listen to and act on views and feedback, whether this has come from a formal channel or not. Consider inviting different representatives from different levels in the organisation to decision-making forums.

Many companies have also seen the benefits of Employee Led Networks representing different groups, such as gender or disability. These networks play a key role in ensuring voice channels are available to all, without bias. They also provide a safe environment for underrepresented groups to share their views and drive change via education and positive challenge.

Actively engaging with work-life balance programmes

Companies that embrace work-life balance and flexible working generally find this contributes to building an inclusive culture and positively impacts the diversity of the workforce. More and more companies have seen the benefits of different types of flexible working practices as a result of the pandemic and plan to continue to provide more options in the future. Flexible working offers different patterns of working that the traditional full-time, fixed-location model can’t, enabling better inclusion of workers from different backgrounds and circumstances.

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