Philip Whiteley's Blog

January 12, 2011

How equalities law may boost business

Filed under: Uncategorized — felipewh @ 10:16 am

There is probably too much employment law. Tortuous detail on disciplinary procedures, or retained rights when a business changes ownership, can cause overly formal, bureaucratic approaches. Moreover, very strict employment rights can create a moral hazard: a tacit message that treating employees is so bad for business that it must be enforced by law can undermine moves towards better treatment of staff in the workplace.

To be fair to Harriet Harman, however, there is a lot to be said for equalities legislation. It will not have been her intention, but here the legislation actually goes with the grain of business objectives. For the most part, business leaders are pretty good at commercial common sense, but a common blind spot is the tendency to make sweeping generalisations on the basis of gender, age, race and so on. This week I was interviewing a top employment lawyer, Audrey Williams of Eversheds, an expert on equalities rights, for a story in Payroll World. She said that she is often asked by retailers, especially in fashion, computer games and music, if in recruitment they can favour younger staff who reflect the customer demographic. Under anti-age discrimination law, since 2006 in the UK, you cannot. This sounds like too strong a restriction on companies, but the law does allow for a business case. If a firm can produce data showing a strong correlation between younger staff and better sales, they can make a defence.

Moreover, Ms Williams adds, you are more likely to be on the right side of the law if you concentrate on hiring based on the core skills needed for business. It is more important that store staff know the product, treat the customers well and create a welcoming atmosphere, than if they tick the same age box or have the same hairstyle. This is similar to the approach required by employers following the end to the compulsory retirement age: they have to focus on the ability of the people involved, not their age (see blog date 13 August 2010: ‘Managing for performance would be a culture change’).

But shouldn’t businesses always and everywhere be making sure they have the best people, with the right skills, in place to do the job? You would think so. But in more than a decade of writing about employee skills, engagement, and how staff’s contributions can be presented in human capital reports, I have found that it is remarkable how often this apparently obvious priority is regarded as a fringe activity, or unnecessary, or of unproven worth.

So congratulations, Ms Harman. Your efforts to damage business profits with this initiative will very probably fail.

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