New report, The Everyone Economy, shows why inclusivity is critical to economic success and effective public services
- CMI publishes a new report outlining how Equality, Diversity and Inclusion (EDI) are necessary to support growth of the UK economy.
- Conclusions are stark: unless UK employers raise their game, the public will pay the price in terms of lost growth, productivity, innovation and quality of public services.
The report, launched as part of CMI’s 75th anniversary, argues we are wasting a huge amount of talent just when we need it most. Employers and managers across UK organisations need to take urgent action if the UK is to reach its economic and social potential. The inclusivity agenda should not be marginalised, it needs to be a central element of UK business, public services, and Government strategies for growth and success.
The report argues that:
1. We’re wasting talent just when we need it most.
- CMI’s analysis shows there are 560,000 missing female managers in the UK right now, and to equal the proportion of females in the UK population by 2026 an additional 800,000 female managers will be needed - an increase of 24% from 2021.
- CMI’s analysis shows that the UK has 420,000 missing managers from lower socio-economic backgrounds.
- There is an almost 30 percentage point difference between the working age employment rate (81%) and the disability employment rate (57.2%). At management level, CMI’s analysis shows there are 290,000 missing disabled managers.
2. Stellar talent is overlooked across the economy.
- 41% of employees said they had witnessed colleagues being negatively affected by their background at work.
- Over half (52%) of employees said they had at some point in their career been overlooked for a workplace opportunity because of their identity.
- Reports of discrimination were particularly high from those identifying as LGBTQ+ (64%) and those from Black backgrounds (63%).
3. We are too much say and not enough do.
- Over 80% of managers claimed their organisations were inclusive regardless of background or protected characteristics.
- Yet, when it came to action including data collection and putting in place training and action plans, all of which are known to have an impact, only a minority of employers were following through. For example, 80% of respondents said their employers either did not capture the socio-economic background data of applicants during the recruitment process, or they did not know if their organisation collected this data.
- Male managers (33%) were more than twice as likely as female managers (13%) to say that too much effort in UK organisations is being focused on ensuring a gender balanced workplace is achieved.
4. Government needs to lead by example.
- Given the proven benefits of inclusivity for growth and organisational success, the Government can afford to pursue a more ambitious approach to policy in order to support EDI across the economy and our public services, and better data is key to this.
- For example, the Government needs to commit to a more permanent and compulsory form of pay gap reporting and mandatory action plans in order to encourage firms to move the dial on all areas of inclusivity.
The report is an action plan for managers and Government to enable the UK to get EDI right and support growth and organisational success. The recommendations are below.
‘The Everyone Economy’ will be launched online at 6.30pm on Thursday 23rd June and will be hosted by Sir Trevor Phillips, Lord Mark Price CVO and CMI’s CEO Ann Francke OBE. There is a link to the Eventbrite for attendees here.
CMI has produced a series of lived experience documentaries - interviewees are available for interviews upon request.
Ann Francke OBE, CEO of CMI said: “This report is a wake up call for companies to drive change, and invest deeply in all aspects of diversity, equality, and inclusion. A lack of diversity in the leadership of an organisation will only hamper business and public services. We now need all employers and the Government to step up and accelerate the pace of change especially as growth is faltering and thousands of employers see skills shortages.”
CMI President, Lord Mark Price, said: "Throughout its 75 year history, CMI has sought to push the frontiers of effective management and leadership. Nothing is more pressing than creating genuinely inclusive organisations. And as the Everyone Economy shows, it turns out that it's vital for economic success too. We need the Government as well as employers to get behind this essential plan."
Adam Marshall CBE, former Director General of the British Chambers of Commerce and CMI 75th Council member, said: “This is a call to action for businesses that simply cannot be ignored. The gap between what we say and what we do when it comes to making the most of the UK’s diverse talent is still far, far too large. CMI has set out a route map that any company or organisation, whatever its size, can follow. Those that do will reap the benefits of better decision-making, higher productivity and a stronger future.
“As an LGBT+ business person myself, I can relate to many of the experiences that were uncovered by the survey work for this landmark report. We can, and must do better at using all of the talent we have in the UK, and I am proud to see CMI leading the way to make it happen.”
Lord Shinkwin, long standing disability equality campaigner, said: ‘It was a privilege to be asked to serve on the CMI’s 75th Anniversary Advisory Council. As someone who lives with a severe disability, I’m very grateful to the CMI for shining a light on the need for the economy to work for everyone and for everyone to have the equal opportunity, on merit, to contribute to the economy.
‘The Everyone Economy maps out a practicable and ambitious path forward in this increasingly important area of business – important to customers, clients and careers. The fact is managers make change happen. Without diversity of lived experience in management, especially at the top, there will be no genuine or sustainable progress for people currently excluded from the economy. I hope managers everywhere and at every level will feel galvanised into action by this thoughtful and challenging paper.’
Sir Trevor Phillips said: "Most managers have got the message - that inclusion is good for them and good for their organisations. What isn’t so obvious is how to fight your way through the mountain of excuses for inertia and inaction. The guidance here is both strategic and tactical - that is to say, the smart boss can see where he or she needs to get to, and what they need to do right now to get started on the journey.”
Prof David Grayson CBE, chair of the Institute of Business Ethics and chair of Leonard Cheshire said: “organisations need to make the most of diversity of thought and experiences and become genuinely inclusive. This new CMI report should encourage organisations to ask themselves what they need to do, in order to maximise the talent available to them. This is not just the ethical thing to do, it is the smart thing to do!”
Dr Alice Maynard CBE, said: “Great leaders and managers want to create environments where people thrive. It's not just about the bottom line, it's about an economy that works for everyone. The work that CMI has been doing over the past year gives us a strong, evidence-based foundation on which to build that economy. I commend the report to everyone interested in making a contribution to the everyone economy – let's build together!”
CMI is urging the government to lead by example in the following areas;
- Recognise that effective EDI is key to unlocking UK productivity and economic effectiveness rather than just see it through the lens of regulatory burden - ‘red tape’ in the political jargon.
- Recognise that the ‘Everyone Economy’ shares the same fundamental principle that sits under the ‘Levelling Up’ agenda - that we as a nation will be more prosperous when opportunity is shared more widely and more fairly across all of the UK’s communities. We need to ‘level up’ across people, not just places.
- Better data is key to this: The Government needs to commit to wider pay gap reporting and mandatory action plans in order to move the dial on all areas of diversity.
- Beyond this, the Government should move beyond a narrow legalistic and regulatory approach, to shine a light on good and bad practice and to use the persuasive power of policy and regulation to encourage innovation.
- This means, choosing not to award lucrative contracts to companies that consistently fail to diversify their leadership teams or to demonstrate their commitment to recognising talent in all its forms including through equal pay; to ensure everyone can benefit from access to flexible working; boost effective management practice; and to hold leaders and companies to account when they fail to act on diversity and inclusion in all its forms.
Furthermore, CMI recommends that managers and leaders:
- Ask challenging questions and pay attention to the answers. Don’t gloss over difficult facts and conversations.
- Plan and track their progress. Study their data, improve it, share it, and hold themselves accountable.
- Embrace flexible working. Even small degrees of flexibility increase your chances of attracting and retaining a diverse talent pool.
- Recognise the central role of all managers, not just EDI specialists. Each and every manager should be aware, trained, and practise inclusive leadership every single day.
- Be story-tellers and role models. Share their experiences of work and their own challenges. Say why diversity, inclusion and fairness matters to their organisations. Give practical reasons linked to better outcomes and ethical reasons too.
About the Chartered Management Institute (CMI)
The Chartered Management Institute (CMI) is the Chartered professional body for Management and Leadership, counting over 180,000 managers and leaders in its membership community. There are currently over 14,000 Chartered Managers and growing. Backed by a unique Royal Charter, CMI is the only organisation able to award Chartered Manager status – the ultimate management accolade, which is proven to boost individuals’ career prospects, management capability, and impact in the workplace.
About the CMI 75th Advisory Council
CMI has undertaken a large programme of research, deliberation and engagement in EDI in the workplace as part of its 75th anniversary programme. The programme has been developed with an advisory council including Lord Mark Price (Chair), Monica Chadha, Sherry Coutu CBE, Baroness Falkner of Margravine, Adam Marshall CBE, David Grayson CBE, Jeannette Lichner, Euan Blair MBE, Dr Alice Maynard CBE, Angela Noon, Teddy Nyahasha, Sir Trevor Phillips, Lord Shinkwin, Jackie Stevenson, Dame Julia Unwin DBE, Elizabeth Uviebinené, Avivah Wittenberg-Cox and Ann Francke OBE. The full report is available here.