What is the business case for diversity in the built environment?

There are a number of reasons why considering diversity is good for your business these include:

• To prevent legislative costs,

• To reap the benefits of employing a diverse team,

• To increase success on public sector tenders,

• To create a more supportive working environment.

When considering the business case you really need to think about what area of the business you are focusing on and what the business case means to you for example do you value the bottom line, employee retention or productivity as a priority?

The research is stronger in some areas than others for example women on strategic boards is an area currently receiving a lot of attention due to the Davies report and the direction France, Spain and Norway have taken with regards to quotas. The wonderful catalyst has also been doing great work for 50 years this year looking at the benefits of gender equality.

Yet diversity isn’t all about gender, what about people from different ethnic and religious communities or those who for some other reason experience life in a different way to the majority? In construction there hasn’t been too much research looking at a tangible business argument though there is research from outside of the sector.

The current research suggests that there is an argument for diversity when it is well managed and understood. Unfortunately a badly thought through strategy can have a negative impact on your business which is why I would always advise clients to avoid undertaking a tick box approach – it’s likely to cost you more in the long run.

The idea behind the business model is that you should be attracting a diverse workforce not to predominantly “do the right thing” or “ensure fairness for all” but in fact to strengthen your productivity and bottom line. Here are some examples of how diversity can be a positive to your organisation.

Become an employer of choice.

For minorities in construction, the support they will receive from their employer is an important factor in choosing who they will work for. It therefore stands to reason that if you can promote high retention rates and support services, you will find more interest from not only minorities but the top end of the workforce in general. A series of surveys by Target Jobs in 2008 into construction found work life balance and development opportunities to be the most important factors in deciding upon an employer.

Improve business performance

Here it’s important to note that the research suggests that a well-managed group of diverse employees will improve your productivity and profit in a number of ways which include mirroring your client base, having a wider pool of experience and creativity and being able to tap into more networks. But if the group is not well managed, the same cannot be said.

Change appears to happen at strategic level when there are more than three women on a board; in fact a US study of fortune 500 companies found that those with 3+ women on the board all reported significantly stronger than average profits.

At tactical level research has found that diverse groups outperform more capably homogeneous groups, which backs up the theory that different experiences provide us with different viewpoints and solutions.

Retain knowledge and experience

Research into diversity in construction suggests that more could have been done to stop the majority of women leaving the construction industry. What’s more compelling is the amount of money that could have been saved if we had. A 2009 government report “Engaging for success: enhancing performance through employee engagement.” put the cost of replacing an employee roughly equivalent to their salary, once training, corporate knowledge and intellectual capita are considered. The same report found that committed employees are 87% less likely to leave their organisations than those less engaged; they also perform 20% better. Instead of thinking can we afford to support our staff? Isn’t it time we started to question if we can afford not to?

Skills Shortage

The latest skills survey from the CIOB finds 72% of respondents felt there was still a skills shortage. Without recruiting from the entire selection pool we are not only failing to meet demand for numbers but also failing to find the best candidates for the roles available. Increasingly a number of smaller studies have found that young men are also avoiding construction due to its macho image and male dominance. In short, to ensure that we encourage the best recruits, we need to offer the most appealing, diverse and professional environment.

Meet procurement standards and stakeholder requirements

Public authorities need to meet the equality duties of The Equality Act 2010 and more importantly, so do their subcontractors. With 60% of current work coming from this sector that’s big news for contractors. By being able to align your organisation to the needs of your client you are putting yourself in a solid position to win more work.

With a large percentage of women and minorities now making procurement decisions for public sector work they want to see themselves represented in your workforce, so if all you have to offer is middle aged white men, it might not be enough.

Happy building, Chrissi

For all things construction and equality, get yourself over to the Constructing Equality Ltd. website.