Of course small businesses want to encourage fair and equal treatment of their employees, but with many of them already struggling to navigate employment law, the new equality bill could be seen as just adding to the problem.
Most small businesses don't have specialists in employment conditions and when faced with the pressures of managing their business in a tough climate, many owner managers could be forgiven for not taking time out to understand and appreciate the value of equality to their business.
Last month, the government published its proposals for new equality legislation. The equality bill aims to reduce the difference in pay between men and women and help eliminate discrimination against disabled workers, older people and those from ethnic minorities. The bill is expected to come into force from autumn 2010 with gender pay audits mandatory for businesses with more than 250 employees from 2013.
While the law here hasn't actually changed yet, the bill shows that the government is strongly committed to addressing equality and businesses of all sizes would be well advised to make sure they have an equal opportunities policy in place and get any equal pay issues in order if they are to avoid expensive tribunals further down the line.
Why develop an equal opportunities policy?
A formal policy shows that as an employer you are committed to providing genuine equality of opportunity for all employees, regardless of gender, marital status, race, ethnic origin, nationality, national origin, disability, sexual orientation, religion or age. Its remit goes beyond strict compliance with the law and acts as a reference point in the event of any subsequent disputes.
What are the business benefits?
The ability to recruit a diverse workforce that reflects the community you trade in will ensure you understand your customers better. Similarly, as customers place greater value on a business' reputation, they may turn to a competitor if they feel you are indifferent to supporting the needs of a particular sector of people. By recruiting people from under-represented groups, you can avoid alienating customers and also avoid discrimination
What should an equality policy look like?
The policy should highlight your company's commitment to equal opportunities in the areas of recruitment, training, promotion and grievance procedures. The key elements that should be included in the policy are:
- A statement of intent, including the aims and objectives of the policy
- Who the policy applies to
- Outline of specific commitments/actions which will be undertaken
- How the policy will be implemented and who is responsible
- Monitoring and review
- How complaints will be dealt with
Understanding equal pay
Equality at work is also about understanding the legal issues around equal pay. Although the new bill and government calls for gender pay audits are unlikely to impact small businesses, it would be good business practice to make sure you are compliant in this area now in order to avoid disputes and claims later on.
Five tips for managing equal pay
- Make sure your pay system is transparent - this is a legal requirement
- Have one pay system for all employees - it will cut down on administrative costs and will avoid cross-boundary claims
- Keep your pay system simple - it will be easier to understand and administer
- Base your pay structure on an objective evaluation of job demands - and re-evaluate this regularly
- Ensure bonuses still reward what they are intended to reward - they should reward performance, related to objective criteria and be subject to regular monitoring
