The economic and social challenges that the UK faces have been thrown into sharp relief by Brexit, in particular around issues like productivity, inclusion and opportunity. As businesses, it is up to us to seize the opportunities that exist to make some positive changes, becoming firms that will be competitive into the middle of the 21st Century. If we get it right, business growth and greater opportunity will go hand in hand.

CBI believes that inclusive businesses will deliver better economically as well as socially. People are at the heart if this. It is often said that the workforce is a business' greatest asset, but we are missing an opportunity if our actions – how we lead, manage, support and develop people – don't back this up, and if we lack the focus needed to help every person reach their best.

An inclusive workplace encourages diversity and empowers everyone to perform at their best

An inclusive workplace is one in which diversity – the differences of gender, sexuality, race, age, social background, physical and mental ability, and even differences of thought and experience – are welcomed because they improve the performance of a team and, ultimately, a business' results. It's where leaders, managers and employees are clear about the role that they play in fostering it.

Inclusion is an approach to running organisations which focuses on ensuring that every aspect of the business – from its leadership and management, to its workplace policies – contributes to helping employees perform at their best. It means more than eliminating direct discrimination that is already illegal. An inclusive workplace is one in which action is taken to ensure that practice and culture does not indirectly disadvantage any group and encourages all.

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Increasing female employment and productivity to the levels of men...is estimated to be worth 35% of GDP.

There is a strong business case for inclusion…

The business case for inclusion isn't new. It is eight years since the CBI, the TUC and the EHRC published Talent not tokenism , highlighting the tangible business benefits of diversity. It included case studies showing that diversity increases employee satisfaction, helps to retain existing and attracts new staff, reduces recruitment costs and increases productivity. It shows that it helps companies to understand how their customers think and what drives their spending habits, and how to access markets that they had not previously been able to tap into so effectively. It also shows that it helps firms to find workers to fill skills gaps in areas with tight labour markets, where there are not enough 'obvious candidates' for the vacancies they have. [1] Since then, having the right people, in the right place, at the right time, has only become more important. Just one in four businesses are confident that they will be able to access the highly-skilled employees they will need in the future, and drawing on a diverse pool of talent will be key to addressing the shortfall. [2]

And this case is getting stronger. Research suggests that increasing female employment and productivity to the levels of men would have a greater impact in the UK that in all but three EU countries. It is estimated to be worth 35% of GDP. [3] Business performance would improve too. Firms with the highest levels of gender and ethnic diversity are 15% and 35% more likely to outperform their rivals. [4] In part, this is explained by the impact of diversity and inclusion on employees and the teams in which they work. Workplaces that are both diverse and inclusive are associated with higher individual performance because employees are better able to innovate (+83%) and more engaged (+101%). [5] It's also associated with higher collective performance because a diversity of thought and experience leads to better decision making owing to more careful processing of information than in homogenous groups. [6]

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Employees say they’re 83% more likely to innovate and more than twice as engaged in workplaces that are both diverse and inclusive.


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…and it is the right thing to do

Business and society do not operate in isolation. Each relies on the other to be successful. Businesses of all sizes and in all parts of the country are the drivers of prosperity. Where this works well it creates a positive cycle in which society supports business success, and businesses create the jobs and deliver the pay rises that lift living standards. The problem at the moment is that this cycle isn't always working well. Business can make a real difference by taking actions that make their workplace more inclusive.

Sharing ideas and experiences between businesses is crucial to progress this agenda

Employers need to take the lead in building inclusive workplaces by implementing solutions that support both business needs and employee needs. But efforts to improve social mobility and diversity in business are most likely to succeed if complemented by government action. Coherent strategies addressing factors like careers advice and school performance are essential because they can be significant obstacles to an individual's chance of getting a job or having their pay rise over time. Even here though, employers can play their part rather than leaving it to the government to come up with solutions. Businesses working with schools to challenge misperceptions that lead to poor study or careers choices is a critical factor.

Each business faces its own mix of strengths and challenges, so there is no one-size-fits-all plan for becoming more inclusive. Each business must first identify the challenges facing their organisation. Then implement the solutions that will be most effective. Businesses sharing their ideas and experiences – what they tried that worked, and what didn't – can help to accelerate the progress of others.

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There is no one-size-fits-all plan for becoming more inclusive… Businesses sharing their ideas and experiences…can help to accelerate the progress of others.

That's why this report is designed for business to learn from one another. It highlights approaches that have helped businesses make progress in order to offer practical suggestions that can help others follow in their footsteps. We take a thematic approach to showcasing actions that can be applied across a range of strands of diversity. We will discuss the importance of people, effective leadership and inclusive workplace practices in creating economically and socially sustainable businesses. Most importantly, we focus on how a whole workforce approach will help to change culture, expectations and practices – giving a particular boost to those who need it most.


NEXT – Chapter 1: A renewed focus on people is needed to boost productivity and inclusion.



References

[1] CBI/TUC, Talent not tokenism, 2008

[2] CBI/Pearson, The right combination: education and skills survey 2016, 2016

[3] Löfström, Å., Gender equality, economic growth and employment, Department of Economics, Umeå University, 2009

[4] McKinsey, Diversity Matters, 2015

[5] Deloitte, Waiter, is that inclusion in my soup?, 2013

[6] Phillips, K. Liljenquist, K., and Neale, M. Is the pain worth the gain? The advantages and liabilities of agreeing with socially distinct newcomers, Personality and Social Psychology Bulletin 35: 336-350, 2009

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