THE COSTS OF INEQUALITY

Organisations in general seem reluctant to be pro-active about equality for various reasons. However, when inequality strikes, and an employee makes a complaint or grievance, then everything changes. Due to the strict employment laws in the UK, such matters have to be dealt with carefully otherwise they can escalate. A lot of management time and effort is involved in dealing with such grievances, with consequent financial loss, not to mention the stress of it all. Organisations often get tempted to victimise the complainant or bully them, but they really need to be very careful about this behaviour, because it again is illegal. In a recent case in Yorkshire involving the NHS, an award of £3mn was made to a victimised former Doctor, and the whole case had been handled very badly by the employer.

When it comes to pro-active diversity work, budgets also tend to be very limited, but in the case of a grievance, budgets appear to be unlimited. Not only are there the direct costs, but there are also indirect costs like loss of reputation, which often happens where cases attract publicity. Someone suggested to me that this money comes out of a different pot, related to legal costs, or it comes out of an insurance claim made by the employer. Whatever the source, the costs are very significant and should not be treated lightly.

When a court examines such a case, it looks for mitigating evidence - has the employer been fair to other similar minority employees, is there evidence of management training about the law on equality, what are the company policies and practices. This makes a case for more pro-active work around equality and diversity, rather than brushing it under the carpet until problems emerge.

As we have argued consistently in this blog, a much more sustainable way of approaching equality is to understand its potential and benefits, and then follow its spirit, rather then do a cosmetic exercise. Here the entire corporate philosophy would change to embed equality as a core asset of the organisation, and see its strengths and benefits to creativity, efficiency and productivity. In my experience, very few organisations operate at this level, to their considerable loss and disadvantage. And there are huge bottom line benefits of this - in terms of increasing revenues and reducing costs.

Article added on 7th February 2012 at 11:10am