Employer group urges companies to adopt diversity strategies

Responding to the rapid diversification of Ireland’s labour force, the country’s main employer representative, the Irish Business and Employers Confederation (IBEC), launched an initiative in June 2007 to encourage member organisations to adopt a strategic approach to diversity management. A recent IBEC seminar on the issue aimed to place diversity management high on the business agenda and to highlight how it can enhance productivity and innovation.

Approximately 10% of the Irish workforce currently comprises non-nationals; this situation is influenced by the EU membership of the 10 new countries in May 2004 followed by Bulgaria and Romania in January 2007. The influx of non-nationals is widely deemed to have significant economic benefits. Given the rapid diversification of Ireland’s labour force, the Irish Business and Employers Confederation (IBEC) has launched an initiative to encourage its members to adopt a planned approach to diversity management, taking into account and incorporating different nationalities and cultures in the workplace.

The employer diversity initiative was discussed at a recent IBEC seminar in Dublin. The event was arranged this year to mark the European year of equal opportunities for all. The aim of the initiative is to place diversity management firmly on the business agenda. Furthermore, IBEC will offer diversity seminars in five regions around Ireland during 2007 in order to highlight the advantages of diversity for companies, in terms of how it can enhance company performance and profitability.

Diversity management boosts innovation

At the IBEC seminar, Professor Patrick Flood of the University of Limerick (UL) presented the results of a survey examining the relationship between business performance and staff management systems in 132 large Irish companies, conducted by himself and a team of researchers at UL. The project was funded by the National Centre for Partnership and Performance (NCPP). Their research questions centred on whether, when combined with high performance work systems as part of a solid human resources (HR) strategy, diversity management could add to overall productivity and performance. The research concluded that diversity management does add to business success, particularly when problem-solving skills are required. The study also reveals that the impact of diversity proved to be positive, in terms of reducing staff turnover and improving productivity and innovation.

About 40% of the companies surveyed have designated a senior manager to take charge of diversity and equality issues. Overall, 40% of the companies have a policy document on diversity and equality; 25.3% of employees receive diversity and equality training; and 20.8% of companies monitor the recruitment and selection of employees based on sex and age, among other criteria. In addition, 13.1% of companies monitor promotion from a gender perspective, and 3.9% on the grounds of ethnic background, disability and age; 3.4% of companies monitor pay rates by sex, ethnic background, disability and age.

‘Our research shows that formal equality and diversity strategies have direct benefits for both employers and employees,’ Professor Flood stated, adding ‘that companies reap financial rewards when a diverse workforce is managed well.’

Proactive strategies essential

In contrast to the UL research, previous studies on diverse workforces have not demonstrated a clear impact on business objectives. However, the UL study implies that the key to benefiting from diversity is to manage it proactively over the long term. It cannot be used as a short-term measure for a particular purpose only. One drawback of the UL study is that it is not reflective of the whole economy. It only covers large companies, which are more likely to have diversity strategies in place than are smaller companies.

IBEC Executive Finola McDonnell acknowledged the central role that businesses must play in promoting equality and diversity. ‘Ireland’s workforce is becoming more diverse, most obviously through the increased numbers of non-Irish nationals now working here,’ she remarked. Ms McDonnell commented,

diversity management is about tapping the talent and potential of all employees, including women, older workers and those with disabilities. IBEC is encouraging its members to take a proactive approach to diversity management that will ultimately benefit their bottom line, as well as ensuring equality of opportunity for employees.

According to Ms McDonnell, while the legal framework is in place in Ireland, notably with the Employment Equality Act 1998, ‘building an integrated, cohesive and diverse society requires much more than compliance with legislation’. She continued:

Having large numbers of employees and customers with different cultures, languages, educational backgrounds and experiences poses a challenge to business. Creating a non-discriminatory workplace and offering equal employment opportunities is no longer enough to meet this challenge. Proactive, planned and effective strategies to foster integration, promote understanding and ultimately reap the business benefits of diversity are now essential.

Tony Dobbins, IRN Publishing