#Diversity and #Inclusion – and meddling bureaucrats


It is a requirement of Australian law that all employers that employ more than 100 employees must report to a Government department the breakdown of the employees by various characteristics such as gender, race, age and so on. ‘What for?’, I hear you ask. And that is a good question, one with no good answer that I can find.

I do not expect that anyone would seriously argue against diversity and inclusion in the workplace. The opposite would be homogeneity and exclusion and no business leader would nominate that as a way to improve the share price.

Diversity of people, ideas, motivations and personalities is good for group effectiveness. Inclusion of all people, rather than exclusion, means getting the best out of them. It is a no-brainer. So I do not think we have a problem.

Yet, business is obliged to report to meddling bureaucrats about the numbers of people with certain characteristics in the different jobs throughout the company. The next step is depressingly obvious: the profile is compared against the profile of the country’s population and if they do not match (in broad terms) the employer is at risk of being accused of not applying diversity and inclusion.

Hmmm, 51% of the population is female yet less than 10% of Company CEOs are female. Some people will say that is evidence of discrimination against women. Those that say that are wrong. That comparison by itself does not prove (or disprove) anything about discrimination.

This attitude is a problem for two reasons: 1) the additional costs of red-tape mindless bureaucracy, and 2) because it leads to Government restrictions on how business is allowed to hire and fire workers.

The key error made in comparing an employer’s employee profile against the population profile is that employers do not hire from the population as a group. They hire from a subset of the population. That subset must meet certain criteria – they must have the right skills, education, experience, attitude, energy, desire, willingness and ability to do the job. For virtually all employers, that subset of the population will not be characteristic of the general population. It is a serious flaw to draw conclusions of any sort just by comparing the profile of the employee group against the population. The right benchmark to compare against would be that subset of the population willing and able to do the job. But that is hard to measure – it is much easier to compare against the population, draw the erroneous conclusions and meddle in business without justification.

Business knows what is good for business. Business will hire anyone with the ability, skills, willingness and availability to improve shareholders’ returns. It does not matter if that person is male or female, gay or straight, their nationality and race is irrelevant. Houston, we do not have a problem. But Canberra does.

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