Plans to impose diversity quotas on companies seeking public sector work could be a major mistake.
For many businesses focusing on surviving the current recession, winning public sector contracts is almost imperative.
Yet, against this background comes the bombshell this month from equalities minister Harriet Harman that she intends to impose diversity quotas that organisations must meet if they are to secure these lucrative public service contracts.
Although this can be seen as another burden for business, the more controversial question is whether diversity quotas actually work.
There is a risk that imposing them may fuel animosity towards minority groups, where the perception might arise that those from minority groups have only been awarded jobs to fill diversity quotas – not because they are qualified and equipped to do the job. This could seriously disrupt workplace harmony, which could, in turn, increase grievances and divert management time from focusing on the business.
Businesses may also be forced into recruiting less able or qualified candidates because they happen to fit diversity quota profiles. Putting people into roles before they are ready may undermine that person's confidence and actually hinder their career progression in the long term.
Some of those who could benefit from quotas have recognised this: when David Cameron sought to impose diversity quotas on his shadow Cabinet, it was female politicians who felt uncomfortable about potentially being appointed to fill the quota rather than on their own ability, even if this was only partially the case.
European governments that have sought to impose diversity quotas have met with huge opposition. Nevertheless, Norway took the controversial step six years ago of introducing diversity quotas on companies listed on the Oslo Stock Exchange. They were told they had to achieve a representation of women at board level of no less than 40%. Listed companies had five years in which to comply, after which they would be prosecuted and fined for non-compliance.
The general feeling in Norway is that this has not had the detrimental impact on business that was initially predicted. However, these quotas rel