A growing number of East Midlands firms are creating inclusive workplace policies, new research has found – as they identified a range of business-critical benefits including higher productivity and lower staff turnover rates.

A study from East Midlands Chamber in partnership with emh group found the proportion of firms in Derbyshire, Leicestershire and Nottinghamshire with a specific equality, diversity and inclusion (EDI)-related policy increased from 48% in 2022 to 54% this year. There was also a 3% drop to 37% of firms saying they had no such policy.

Some 56% of respondents said EDI formed part of strategic discussions at leadership or board level, with 15% believing this was to “a great extent” – although the same proportion said there was no focus on EDI at all – in figures similar to 12 months ago.

The biggest benefit attributed to having an engaged approach to EDI was its ability to create an inclusive working environment, which was cited by 65% of respondents.

Other popular reasons included the role it plays in supporting diversity of thought in decision-making (58%), staff recruitment and retention (52%), and better representing customers and clients (44%).

An average score of five out of 10 was given to the importance of EDI engagement to the success of an organisation. This was down from 5.6 a year earlier, while it also falls behind corporate social responsibility, which was awarded a score of 5.7 in a separate survey.

East Midlands Chamber director of policy and insight Chris Hobson chaired a roundtable with business leaders at the East Midlands People and Skills Summit recently to discuss the findings and recommendations for future business support tools.

He said: “EDI is about having a focus to create an inclusive workplace environment in which people feel they ‘belong’, in order to bring their best selves to work and support a business to realise its growth ambitions.

“Our research shows that while EDI has slipped slightly down the agenda – perhaps due to the persistent pressures on firms caused by a cost-of-doing-business crisis that has occupied leaders’ minds over the past 18 months – it remains an important consideration for many businesses in the East Midlands.

“Those engaged cite benefits such as supporting innovation, staff recruitment and retention, and better representing customers – all business-critical issues at a time when firms are looking for new ways to improve productivity and plug persistent skills gaps, with our research also showing 73% of firms that try to recruit will struggle to fill roles.

“While there are still barriers to adoption, including a lack of understanding among leadership teams and a fear about getting it wrong, we know that providing businesses with the support they need to implement inclusive policies can lead to greater adoption – and ultimately support business success.”

The research was carried out within East Midlands Chamber’s Quarterly Economic Survey – which gathers intelligence on how businesses are faring in areas such as sales, cashflow and recruitment – for Q1 2023, with 320 responses. Other key findings included:

• There was a relatively even split in EDI policy adoption between services-based businesses (55%) and manufacturers (52%) – with a significant growth in engagement among manufacturers after 43% had a policy a year earlier
• EDI adoption reduces the further down we descend in the business size spectrum – from 90% of large firms having a dedicated policy, this reduces to 68% of medium businesses, 57% of small companies and 37% of microbusinesses
• Barriers to having an effective EDI policy included it not being viewed as a priority (cited by 42% of respondents), concerns about getting it wrong and causing inadvertent upset (30%), the time it takes to develop a policy (28%), ensuring buy-in from staff (24%), a lack of understanding among the leadership team (22%) and a perception it isn’t needed in their workplace (22%).

The research will be used to create a series of recommendations for further business support and policy activity around how Government can collaborate with employer representative bodies to advocate for EDI and support further engagement.

This was the second instalment of EDI research as part of a strategic partnership between East Midlands Chamber and emh group, an affordable housing, care and support provider based in Leicestershire.

Chan Kataria OBE, chief executive of emh group, added: “I’m encouraged that the second year of our strategic partnership research has seen a positive shift in some areas of engagement among members of the business community.

“This demonstrates a strong commitment to equality, diversity and inclusion, as well as acknowledgement of its contribution to business success.

“A key aspect of this research was to explore the barriers to engagement on EDI. The results strongly indicate an appetite for support, and increased engagement on the broader spectrum of EDI.

“The findings also provide a platform to explore opportunities to share good practice and collaborate for better business outcomes.

“EDI is at the heart of what we at emh do, and I look forward to our continued work with the Chamber and its members to help deliver the actions that will make a real difference.

“I’m proud that the diversity of our communities is one of the biggest unique selling points of the East Midlands, and a key factor in its economic success.”