11 April 2008 – Publication of DWP Research Report 483: The Business Case for Equal Opportunities: An econometric investigation

Research published today by the DWP shows that Equal Opportunities policies and practices do not overall have a negative impact on business performance. Even though the relationship is not simple, the research helps allay fears that Equal Opportunities mean large, extra costs for business. The research used the 2004 Workplace Employment Relations Survey to assess the effect of Equal Opportunities policies and practices on profits and productivity in the private sector.

The main findings are:

• Equal Opportunities policies and practices do not place disproportionate burdens on business. In other words, it does not appear, on average, to cost the private sector profits;
• There is some, but limited evidence that some family friendly policies may have productivity gains for smaller establishments and profit gains for larger establishments;
• However, the relationship between Equal Opportunity policies and practices and business performance is complex – the analysis did not conclude that there were large and widespread causal business benefits from the existence and implementation of Equal Opportunities policies.

Notes to editors

1. The DWP research report: The Business Case for Equal Opportunities: An economic investigation is published on 11 April 2008.
2. The Workplace Employment Relations Survey 2004 (WERS 2004), is the latest in a series of matched employer/employee datasets. The WERS series (and data linked to these) is the only British dataset which provides the necessary data on Equal Opportunities policies and practices, other management practices, productivity and profitability.
3. The study examined a range of Equal Opportunities policies and practices: formal, written Equal Opportunities policies (not informal); monitoring and reviewing practices; flexible working arrangements; and leave (above the statutory minimum) for family responsibilities. Full analysis of the business benefits of Equal Opportunities policies and practices was confined to seven policies and practices. The selection meant that the study covered practices directed at race and gender equality in more detail, although the study does relate to all equality groups.
4. The findings refer to averages across the dataset. As such, while there was no evidence that Equal Opportunities policies and practices result in a net cost (or benefit) to employers in aggregate (i.e. on average), it is likely that some employers will derive net benefits from implementing Equal Opportunities policies and practices and others will see a net cost.
5. The analysis was undertaken by the National Institute of Social and Economic Research.  The report’s authors are Rebecca Riley, Hilary Metcalf and John Forth.

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Prepared by: Department for Work and Pensions Welfare to Work Directorate