Diversity and inclusivity - smaller business guide

Diversity in business can be vital to innovative thinking and marketing to a wider audience.

According to Forbes, a diverse set of experiences, perspectives, and backgrounds is crucial to innovation and the development of new ideas.

However, many smaller businesses have yet to take advantage of the benefits a more diverse workforce could bring.

Since 2013, the UK disability employment gap has slowly begun to narrow, however the gap is still large with over 8 in 10 (81%) non-disabled people in employment, compared with just over half of disabled people (52.7%).

Ethnicity also affects employment.

In 2019, 77% of white people were employed compared to 66% from all other ethnic groups combined.

Stonewall found that 35% of staff who are LGBT hid that they are LGBT (2018) through fear of discrimination, while young LGBT people face being “shut out” of work.

What are diversity and inclusion?

Diversity and inclusion don’t mean the same, nor are they legal definitions.

So, what’s the difference?

Diversity recognises the varying needs of individuals from different cultural, economic, ethnic, social, and religious backgrounds.

It also recognises the needs of disabled people, all gender identities, and sexual orientations.

Inclusion provides a culture that enables a diverse workforce to thrive.

In an inclusive environment, people or groups feel “welcomed, heard, respected, supported, valued and able to reach their full potential,” said Teresa Loftus, assessment team manager at the pan-disability charity, AbilityNet, which consults on D&I in the workplace.

Diversity means recognising difference and inclusion welcoming it.

Best practice in implementing the Equality Act 2010

The Equality Act 2010 “legally protects people from discrimination in the workplace and in wider society.”

This makes it illegal to discriminate against someone on the grounds of a protected characteristic: age, being married or in a civil partnership, disability, gender reassignment, being pregnant or on maternity leave, race, religion or belief, sex, and sexual orientation.

The Equality Act applies in the workplace, at provision of services, and at every stage of employment.

Employers have a legal duty to give individuals with protected characteristics an equal chance to:

The Act covers direct and indirect discrimination.

Direct discrimination means treating an individual with a protected characteristic less favourably than others.

To discriminate indirectly is to have universal rules that may put someone with a protected characteristic at a disadvantage.

Employers are required to make reasonable adjustments to any elements of the job, which place a disabled person at a substantial disadvantage compared to non-disabled people.

The Equality Act also lists harassment and victimisation as forms of discrimination.

The Act protects against discrimination by association which occurs when a person is treated less favourably because they are linked or associated with a protected characteristic, despite not possessing that characteristic themselves.

The same is true if a person is discriminated against because they are thought to have a particular protected characteristic, this is discrimination by perception and prevented by the Equality Act.

Employers’ responsibilities under the Equality Act 2010

As an employer, it’s your legal responsibility to ensure equality throughout an employee’s journey, beginning with advertising a job and the recruitment process.

Equality at pre-interview and interview stages

When recruiting, you must not state or imply discrimination against potential candidates.

It is worth considering where you advertise: a woman’s only magazine could imply bias, and there have been high profile examples where algorithms were accused of discrimination.

Employers can ask if job applicants need “reasonable adjustments” to participate in the recruitment process.

These could involve ensuring a disabled applicant can access the interview location or giving clear instructions to a neurodiverse applicant, but you can't use that information for any other purpose in the recruitment process.

Making reasonable adjustments in the workplace

Once you employ someone, you may be required to make reasonable adjustments under the act.

The Equality Act’s code of practice gives example of adjustments that may be required as "reasonable adjustments, which include:

  • acquiring or modifying equipment (a screen reader for a blind person, for example)
  • adjusting your premises
  • altering working hours
  • allowing absence for rehabilitation or treatment
  • arranging or giving additional training
  • modifying instructions or reference manuals
  • providing a reader or interpreter
  • providing supervision.

There are online tools that can help you identify the need for reasonable adjustments, such as Clear Talents On Demand.

Equity of employment also relates to pay, promotion, access to training, and working conditions.

The Equality Act gives women and men the right to equal pay for equal work, with women and men being legally entitled to be paid at the same rate for like work, work rated as equivalent, and work of equal value.

Employers must not dismiss an employee on grounds that are discriminatory.

Embracing diversity and inclusion in the workplace

Employers who don’t embrace a diverse workforce are missing out. Research shows that diverse organisations have better financial revenue, profits, and net income.

Going beyond legal compliance can encourage a culture of diversity, drive innovation and boost brand reputation.

Employers looking to embrace diversity could, for example, join the Disability Confident Scheme, which offers three Levels: Disability Confident Committed, Disability Confident Employer and Disability Confident Leader.

Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.

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