Employers that fail to manage diversity effectively will experience a host of organisational difficulties and run the risk of unlimited awards at employment tribunals, according to HR experts.
The Chartered Institute of Personnel and Development (CIPD) has warned that poor diversity management not only attracts the well-publicised risk of discrimination claims, but can also lead to poor performance, lack of motivation and recruitment difficulties.
At a time when the majority of employers are struggling to recruit the right candidates from an exceptionally tight labour market, organisations which don't have robust diversity policies are making the situation more difficult.
A new CIPD guide claims firms must consider diversity more holistically, so it covers every strand of the business including the relationships with employees, customers and clients. Just sticking to legal compliance is no longer perceived enough, because diversity plays an essential role in tackling skills shortages, retaining knowledge, widening the recruitment pool and even on bottom line results.
Dianah Worman, CIPD's diversity adviser, said poorly managed diversity can also have a negative impact on employees, leading to tension between individuals and organisational performance being hampered.
"Managing diversity is central to good people management and it is relevant in all sorts of ways to the way organisations do business. The challenge is to create a culture in which everyone feels valued so they give their best in their jobs.
"Recent CIPD research found more than half of UK organisations are facing recruitment difficulties and more organisations are addressing diversity to be more successful at recruiting and retaining the skills they need. Organisations that don't will risk losing out in the contin-uing war for talent," she added.