Boosting Opportunity and Realising Potential
report of the workplace equity commission
Boosting Opportunity and Realising Potential
FOREWORD - Sarah Howard MBE, Chair of BCC and Co-Chair of the Workplace Equity Commission
Access to a skilled, engaged and productive workforce remains a top priority for business.
Recruitment and retention difficulties are holding back firms of all sizes and sectors across the UK. They are also acting as a drag anchor on the economy. At the same time, the skills, experience and potential of many working age people are going untapped. People are struggling to overcome barriers to accessing work and career progression. It’s vital that we address this disconnect. Our goals should be supporting everyone who wants to work to achieve their full potential and enabling employers to embrace talent pools from every part of society.
By changing approaches to recruitment, development and workplace culture, employers can help more people access employment opportunities and contribute to the success of the business.
During the past year, the Workplace Equity Commission has sought to understand the challenges and opportunities for SME employers in creating equitable workplaces. SMEs, in general, are less likely to have introduced or progressed strategies and interventions to break down barriers in the workplace. We have looked for best practice that can be scaled-up across business communities and where additional support and guidance could help to overcome challenges.
Fairer, more inclusive and diverse workplaces benefit individuals, businesses and local economies. Our report reflects on the need for managers and policymakers to create the right conditions to drive change at pace for all talent pools in our workforce.
Thank you to all the businesses, Chambers and organisations who have contributed. Special thanks to my fellow Commissioners from across business and civil society for your support and wise counsel.
We are grateful to our partner, Youth Futures Foundation, who have provided valuable insight on priorities for young people.
We are also thankful to the TUC for their input to the report, sharing the vital work that unions do in delivering equity for workers.
This report is just the start and there is much more for business and government to do. We need to shift the dial on workplace equity and remove barriers for all underrepresented groups in the workforce.
FOREWORD - Barry Fletcher, Chief Executive of Youth Futures Foundation
As the What Works Centre for youth employment, with a specific focus on marginalised young people, we understand the importance of giving the next generation the education, skills and opportunities they need to realise their full potential in the workforce.
The UK has significant labour market challenges and employers tell us they lack the talent and skills they need, with the latest ONS data showing vacancy levels remain high at 884,000. Yet simultaneously, 872,000 16-24-year-olds are not in education, employment or training (NEET), equivalent to 1 in 8 – the highest rate in eight years.
Without decisive action to address this challenge and turn it into opportunity, we are not only letting down a generation of young people, but employers will continue missing out on a talent pool that can deliver future prosperity. If we were ambitious and sought to match the NEET rate of the Netherlands, where only one in 20 young people are not in employment or education, we could add £69 billion to the UK economy over the long term.
To deliver this, we need a gear change from employers and government. With SMEs making up 99% of UK businesses, they are an essential part of the solution, which is why Youth Futures Foundation is delighted to have joined together with the British Chambers of Commerce on the Workplace Equity Commission.
Employers tell us they recognise the importance of building diverse teams and see young people as essential in this but turning intention into reality means doing things differently. Reaching and nurturing diverse talent pools requires new strategies and rethinking recruitment and retention practices for SMEs as well as a supportive and enabling policy environment. There is much to do and learn. The data and evidence will be essential to help small businesses to know how to do this practically and effectively. Only through addressing these challenges can we build the workforce of the future.
executive summary
As firms face persistent challenges with skills shortages, and the UK economy continues to be plagued by weak productivity and unprecedented rates of economic inactivity, the need for businesses to attract, develop and retain the broadest range of talent is clear. The cost of worklessness in the UK is unsustainable and too much talent is going untapped because individuals find themselves excluded from the labour market.
The benefits of workplace equity, diversity and inclusion (EDI) for both business and government are well known. Companies leading their geography and industry for EDI perform better than their market average across a number of metrics. Not only are they more able to engage and retain staff, but evidence shows they are 36% more likely to outperform on profitability and able to achieve a 20% higher rate of innovationiii. The new government is going for growth. More people in employment means increased tax revenues and reduced benefits costs. Take disabilities as an example, if the Disability Employment Gap was halved in the UK, this would unlock an estimated £17bn benefit to HM Treasury.iv
While large companies have the resources and capabilities to make EDI a priority, and should do more to share their learnings, SMEs — which account for 61% of UK employment — continue to face a series of challenges to improve access and opportunity. BCC research revealed that less than half of SMEs have yet introduced any specific policies or programmes for under-represented groups in the workplace.
Not only are they held back by a lack of information, resources and the complexity of equalities legislation, the fear of the financial and reputational risk of doing or saying the wrong thing is leading to paralysis – a fear that has been heightened by increased politicisation of EDI. This is having unintended consequences and it’s time to turn down the temperature of the debate.
Removing barriers to access will need to be at the heart of the new government’s economic agenda. But this can’t be about heavy-handed regulation, high-cost initiatives, or gimmicks. Firms, particularly SMEs, need practical ways to support the principles of fairness and equity in the workplace.
The government needs to provide a framework that incentivises and gives confidence to firms to move forward at pace, and help employers tackle these challenges head on. To improve individual’s prospects, boost business success and drive economic growth, we have set out in our report a five-point plan on how the government and employers can take action.
The plan covers:
- Setting out an ambitious and enablingframework for the public and private sector
- Supporting diverse leadership and management
- Improving access to opportunity
- Helping people to stay and progress in work
- Supporting minoritised communities and addressing cross-cutting factors.
Context
The government has set out an ambitious plan for increasing the employment rate to 80%, alongside a series of measures designed to help the economically inactive into stable jobs. This plan to ‘get Britain working again’ is essential to drive forward the government’s key mission — generating economic growth.
The government, like business, knows that the best resource this country has is its people. They are the lifeblood of any successful enterprise, and getting all those who are able into good, well-paid employment will be the foundation of our future prosperity. However, now, more than ever, businesses are facing acute skills shortages and a population that is increasingly likely to face health issues that cause them to drop out of work.
The government’s Plan to Make Work Pay is an ambitious project to reform employment rights for generations to come, updating legislation and embedding best practice across the wider workplace. Its upcoming Employment Rights Bill and Draft Equality (Race and Disability) Bill will be the centrepieces of this programme. Measures like the right to request flexible working, addressing pay gaps, and tackling maternity discrimination will help generate a positive environment for all workers, not just marginalised groups.
Equity in the workplace is at the core of this ambition. It is about enabling simple, practical steps to facilitate access to work for as many people as possible, and it is about doing that in a light-touch way that helps to guide business towards the right outcomes. As the government develops its plans it needs business alongside it on that positive journey, working together towards a common goal of a happier, healthier, and more inclusive workforce. Therefore, it is essential that all reforms are proportionate and developed in partnership with business.
RECOMMENDATIONS
FIVE-POINT PLAN FOR WORKPLACE EQUITY
The Commission has developed a five point plan for workplace equity. We aim to set out simple, practical steps that can be taken by government and SMEs to advance the shared aim of equity in the workplace. This plan follows from our research and evidence-gathering, detailed in the subsequent chapters, and is designed to provide a framework for success across every part of our society.
1. SET OUT AN AMBITIOUS AND ENABLING FRAMEWORK FOR THE PUBLIC AND PRIVATE SECTOR
Government
A. Set High Expectations
Update and streamline equalities legislation, strengthen and underpin the role of the Equality and Human Rights Commission, and increase understanding among employers and their workforce. Extend pay gap reporting for large firms to include ethnicity and disability, supported by robust guidance for employers and the workforce, and with a requirement to cascade best practice through supply chains to support SMEs. Review the effectiveness of pay gap action plans. Deliver the proposed Equality (Race and Disability) Bill in full, to extend equal pay rights to Black, Asian, and minority ethnic and disabled workers, treating equal pay claims based on ethnicity and disability on a par with existing protections for women. Ensure employment best practice is adopted throughout government and the public sector.
B. Review Recommendations
Consider the recommendations of the 2024 Lilac Review on support for disabled entrepreneurs and the Buckland and Autistica Review on autism employment.vi
C. Encourage Local Initiatives and Solutions
Devolve skills budgets to enable funding to be better targeted to local priorities. Create a framework for the sharing of best practice between the UK nations and devolved English regions, and encourage innovative solutions that meet local needs.
D. Robust Consultation
Consult and engage with businesses and those with lived experience, both in and out of work, on all proposed changes to employment and equalities legislation. This is important to maximise the benefits and minimise the risk of unintended consequences. It will be particularly important as the government’s Plan to Make Work Pay is implemented over the coming months and years. We must achieve the right balance of rights for employers and individuals and ensure that no person is left behind.
E. Joined Up Policy
Ensure joined up policy and activity across government. The role of the Equalities Minister should include a requirement to promote and support workplace equity in business. It should have clear links to the Department for Business and Trade.
F. Simplify and Streamline
Normalise and simplify the language of equality policy and create a positive atmosphere for conversation and progress. Provide clear guidance. Ensure ACAS has the resources to quickly respond to and support SMEs.
G. Tried and Tested Resources
Use the What Works Networkvii, and other trusted resources, to boost capacity among SMEs. Signpost to relevant and curated information, best practice and toolkits. Help them introduce proportionate and low-cost changes that are proven to work and have a positive impact on individuals and the bottom line.
H. Procurement and Supply Chain
Use public procurement policy to encourage large firms to share best practice on equity with SMEs through supply chains. Incentivise (not penalise) SMEs through the procurement process by ensuring any requirements are proportionate for the size of business.
I. Champion Business Champions
Publicly recognise business champions of workplace equity. Offer match funding to those employers who want to try innovative ways of supporting diverse groups into the workplace. Encourage large firms to maintain momentum in the face of pressure from international stakeholders.
J. Embed Equity in Education and Training
Build workplace equity awareness into the curriculum and all publicly funded post-16 education and training at all skill levels, including management training, apprenticeship standards and technical and vocational qualifications.
K. Accessible Buildings
Help SMEs who feel constrained in rented business premises to remove physical barriers that hold back progress on workplace equity.
L. Improve Careers Information, Advice and Guidance
Invest more in careers information, advice and guidance for all age groups. Raise awareness of employment opportunities in sectors where there are pay gaps for underrepresented groups. Incentivise employers to engage with careers programmes, including in the Special Educational Needs and Disability (SEND) environment.
2. DIVERSE LEADERSHIP AND MANAGEMENT
Employers
A. Lead the Change
Establish and promote the business case for change and invest for the long term. Build workplace equity into business strategy and put in place a plan to diversify at the decision-making level. Monitor diversity statistics in your leadership team and report internally (and publicly where appropriate), putting in place action plans to address any gaps. Take low cost, deliberate steps to create a workplace culture where everyone can achieve their full potential and individuals get the support they need to thrive in the business. Maintain the commitment and engagement of senior managers and ensure that all teams throughout the business are bought in. Make clear that equity isn’t just an HR issue, but a responsibility for all leaders and employees from the moment they become an employee and throughout their career.
B. Trained and Diverse Managers
Train managers to ensure they have the skills, knowledge and confidence to create, engage and effectively manage diverse and hybrid teams. Empower them to identify and introduce the changes needed to give individuals and groups the support they need, tackle discriminatory behaviour and build an inclusive workplace culture. Consciously remove any barriers to progression to ensure you are not overlooking management talent.
C. Measure and Monitor
Adopt workplace practices that boost opportunity for people and deliver a return on investment. Routinely gather data on your workforce and benchmark to assess the impact of interventions and working practices and enable managers to identify and address any issues.
D. Seek Peer Support
Information, toolkits and peer support is available to help employers take the first proactive steps and drive continuous improvement. Engage with Chambers and other business networks to access information, guidance, training and best practice. Use these networks to discuss and address challenges in relation to workplace equity.
3. IMPROVE ACCESS TO OPPORTUNITY
Employers
A. Modernise Recruitment Strategies
Ensure recruitment practices do not inadvertently deter talented individuals from applying for job vacancies or prevent them from performing at their best at interviews. Adopt best practice on interview techniques to attract a diverse range of candidates, widen access for under-represented groups and connect the business to new talent pools. Consider redesign of jobs, flexible working patterns and ways to eliminate bias.
B. Proactively Seek Out Diverse Talent
Work with Job Centres, local and national charities, specialist recruitment businesses and other sources of advice and support across communities. Use social media and other avenues where appropriate. Promote your training and employment opportunities to candidates who might otherwise not see themselves fitting into your business or sector.
C. Make a Statement
Publicly demonstrate commitment to workplace equity, for example by becoming a Disability Confident employer and displaying the ‘Happy To Talk Flexible Working’ in your job advertisements.
Government
D. Skills England
Through the work of Skills Englandviii, build principles of fairness and equity into the new national framework for skills, education and employment.
E. Digital Exclusion
To help SMEs reach diverse talent pools, develop a targeted programme to enhance access to job advertisements and applications for individuals experiencing digital poverty or with digital access needs. Explore social tariffs for lower income areas, to enable more people to access broadband services, improve access to technology, and enable access to flexible working.
4. HELP PEOPLE STAY AND PROGRESS IN WORK
Government
A. Promote Workplace Health
Remove the tax on private medical insurance and health cash schemes. This will help SMEs maintain good health for everyone in the workplace and support people with ill health to access jobs.
B. Funding for Adaptations
Boost resources and capacity for the Access to Work scheme to support individuals and SME employers. This will help ensure people get the support they need more quickly for adjustments that help them to access, remain and progress in work.
C. Access To Childcare
Undertake a root and branch review of childcare provision to reduce barriers to childcare for working families in all parts of the UK. Ensure parents can access, remain and progress in employment. Ensure the policy to extend early years childcare provision is properly funded. Address issues in the sector, including staff pay and recruitment, training, progression and retention. Expand subsidised wraparound childcare support. Raise awareness of childcare support available on Universal Credit to help people make informed choices related to their careers. Consider the introduction of a new payment system to replace the upfront payment process and reduce the immediate outlay costs for working parents on universal credit. Launch a review of paternity leave so more men can pick up childcare duties without a financial penalty.
Employers
D. Flexible Workplaces
Provide the broadest range of flexible working solutions, wherever possible, to help employees balance work and learning with health, caring responsibilities and other commitments.
E. Retaining Skills
To retain skills, understand what is driving the behaviour of underrepresented groups in your workplace. Assess and gather data on the drivers of employee turnover, including employee benefits, development opportunities and progression.
5. THE FUTURE WORKFORCE
Government
A. Preparing People For The World Of Work
Ensure access to high quality careers information, advice and guidance for young people in education and adults looking to enter, remain and progress in work.
Use the curriculum review to ensure careers IAG is a mainstream priority for every school, college and university, embedded in school life. Provide practical support for SMEs to help them engage with schools and provide work experience opportunities.
Integrate adult employment support and careers IAG through job centres and place-based initiatives.
B. Progression Pathways
Ensure education providers are required and supported to promote technical and vocational routes on a par with traditional academic routes to employment.
The remit of Skills England should include a requirement to ensure there are progression pathways, supported by evidence, from level 2 to level 5 and above and including apprenticeships. These pathways must be available to people in local communities in all parts of the country. This will help learners of underrepresented groups to gain the skills they need to progress in work, whatever their life experience and circumstances.
C. Adoption of New Technologies
Technology has the potential to dismantle workplace barriers and create better opportunities for all employees. Appoint an AI Champion to help businesses understand how they can adopt new technologies such as artificial intelligence to create better outcomes, including for workplace equity. As the growth of digital technologies and AI continues to transform the workplace, support all individuals and employees to continuously upskill or retrain to adapt to these changes and thrive in work.
D. Business Support
Provide practical support for SME employers to redesign jobs to support individuals. This will enable more people to utilise their skills and experience, access and remain in work, and achieve their potential.
Employers
E. Provide Experience and Opportunities
Engage early with schools and education providers to raise young people’s awareness of, and aspiration for, careers in your business and sector.
Support new and diverse talent of all ages to join your business. Provide structured work experience and extended industry placements. Offer paid and supported internships, apprenticeships and other ‘earn while you learn’ opportunities. Use training and job redesign to support people in underrepresented groups to access your employment opportunities, keep developing their careers, and fulfil their potential.