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The business benefits of diversity CURRICULUM TOPICS

• Business environment
• Business strategy
Introduction • People in organisations
• Communication
Diversity describes people’s differences. Differences can come from individual characteristics
and life experiences, such as where you went to school or where you live. Being married or in
a civil partnership, being a parent, your political affiliation, career path or level of
income can also influence your personal perspectives. These factors make us react, approach
challenges and solve problems differently.
When people refer to ‘diversity’, especially in a business context, they often focus on a
particular set of key characteristics or differences. These are: Political affiliation:
• gender belonging to a political
• ethnicity (which refers to colour, race and national origin) party or sharing the views
• religion of a political party.
• disability
Gender: the physical
• age and/or social condition of
• sexual orientation. being male or female.
These differences are protected by law. This means staff and customers have the legal right to
be treated fairly and equally in relation to these characteristics. Ethnicity: belonging to a
national or racial group of
Diversity brings real benefits to society and businesses. For society, diversity brings richness and people.
variety. There are always new and interesting things to be learnt from each other. For a business,
Ethnic minorities:
employing a diverse workforce enables it to use a wider range of talents and skills. These lead to
national or racial groups
creativity and innovation. Businesses need to mirror the communities and cultures they work in so living in a country or area
they can understand and anticipate the diverse needs of their customers. which contains a larger
group of people of a
In order to get the best from staff and meet the varying needs of their diverse customers, it is different race or nationality.
very important for businesses to ‘manage diversity’ in a positive way. They need to recognise,
respect and value people’s differences.

Gender Religion or belief

Things that
make us different

Age Sexual orientation


The following facts help to show how diverse society is becoming:

• Ethnic minorities make up 8% of the external labour market (4.6 million people).
• The UK population is becoming older. By 2016 there will be more adults aged 45-59 than
in any other age group.

• 6% of the adult population is estimated to be lesbian, gay, or bisexual (3.5 million people).
• 11% of the UK working age population is estimated to have a disability.
• Women currently account for 51% of the working population.
• By 2011, it is estimated that only 20% of the UK workforce will be white, non-disabled men
aged under 45.

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This case study shows how Lloyds TSB has created an environment in which different
characteristics are positively welcomed and valued. It specifically focuses on how the bank has
developed and is using a sexual orientation strategy to improve its business performance.
The business case for diversity
Lloyds TSB believes that its diversity programme is essential to keeping its position as a
GLOSSARY leading-edge employer. The programme helps Lloyds TSB maintain its first-class brand
reputation and the opportunity to maximise its market share.
Strategy: long-term
business plan of an
Lloyds TSB’s business case for diversity focuses on 4 key areas:

Market share: the

Employer of choice Meeting the needs of our diverse customers
percentage of sales within
a market that is held by • Lloyds TSB needs to appeal to the widest • Lloyds TSB needs its staff to understand
one brand or company. possible number of people to fulfil its and mirror the different needs of its
recruitment needs and attract the skills it customers.
Culture: the typical requires. • Over 50% of all new Lloyds TSB current
pattern of doing things in • Lloyds TSB needs to be able to manage accounts are for customers who are new
an organisation.
a labour force that is becoming to the UK. It is important to develop new
Competitive increasingly diverse. Creating a culture products and services to support these
advantage: a strategic of inclusion is essential to build a customers and grow the business.
element that enables an sustainable business for the future. • With new products for diverse markets,
organisation to compete • Employees who feel valued and like the Islamic Financial Service and
more effectively than its
respected are more likely to be highly India Banking Service, Lloyds TSB has
motivated and committed to the the opportunity to gain competitive
Asset: something that is organisation. This means they are more advantage.
of worth to an organisation likely to perform better and make a
e.g. people, cash, financial bigger contribution to Lloyds TSB.
claims on others, • People are Lloyds TSB’s number one
machinery, buildings.
asset, so it wants to keep their valuable
Comply: acting according skills and talent.
to an order, set of rules or • A mix of people with different talents,
request. skills, and perspectives allows creativity
and innovation to develop.
Brand: a name, symbol
or design used to identify a
specific product and to Compliance Corporate reputation and community profile
differentiate it from its
• Lloyds TSB needs to comply with • Having a strong brand profile is
anti-discrimination legislation. fundamental to Lloyds TSB’s success.
Stakeholders: Diversity is a key component of this.
individuals or groups with • Winning and retaining the trust and
an interest in the decisions commitment of local stakeholders is
made by an organisation. essential to success.

Discriminate: to treat an
individual or group less
favourably than others.
Employment legislation and diversity
Gender reassignment:
a process, undertaken Over the years, the government has created laws to provide a framework between employers
under medical supervision and employees. A number of these laws relate to diversity in the workplace. These are
for the purpose of
designed to make sure everyone has the same opportunities. These laws set the minimum
reassigning a person’s sex
by changing physiological standards that businesses must comply with.
or other characteristics
of sex. Some laws are created at national level by UK Parliament. For example, the Sex
Discrimination Act 1975 (SDA) makes it illegal to discriminate because of an individual’s
sex, gender reassignment, being married or in a civil partnership. It covers many areas
including employment, vocational training, education, the provision and sale of goods,
facilities and services, and premises.

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Harassment Training

The employment aspects

of anti-discrimination
legislation relate to: GLOSSARY
Recruitment Dismissal
European Union:
European governments
who choose to be
Access to work-related
Promotion benefits, facilities members make decisions
and services: and agree on shared
action in social and
economic matters.
Businesses must also comply with the Civil Partnership Act (2004) which came into force on
5th December 2005. Civil partnership is a new legal relationship. It can be registered by two Role models: persons
people of the same sex who are over 16 years of age. It means same sex couples can obtain who someone admires and
whose behaviour they may
legal recognition for their relationship and gives them the right to be treated in the same way
as married couples. This covers a wide range of legal matters including:
• next-of-kin rights, including benefiting under a partner’s will without having to pay
inheritance tax
• assessment for tax purposes, child support or income-related benefits
• employment and pension benefits
• recognition for immigration and nationality purposes.

At a higher level, laws are created by the European Union for all member countries. For
example, the European Union Equal Treatment Directive makes it unlawful to discriminate on
grounds of sexual orientation and religion or other belief. Sexual orientation is an orientation
towards persons of the same sex (lesbians or gay men), towards a person of the opposite sex
(heterosexual) or towards persons of the same sex and the opposite sex (bisexual). The Sexual
Orientation Regulations provide protection from discrimination based on an individual’s sexual
orientation. An individual who has been treated less favourably than another because of their
sexual orientation has the right to make a legal complaint.

Good employers obey the law. The best employers go further than this and recognise how
diversity can benefit the business.

Lloyds TSB’s sexual orientation strategy

Lloyds TSB takes diversity very seriously. The Group’s Deputy Group Chief Executive has
overall responsibility for its diversity strategy. This includes seven main strands: gender, race
and religion or belief, disability, sexual orientation, age and work-life balance. Lloyds TSB
believes diversity is important because employing and managing diverse people makes it
more well-rounded and balanced. It enables Lloyds TSB to be more adaptable to new

Sexual orientation is the most recent of these diversity strands. Lloyds TSB launched its sexual
orientation strategy in 2005. This was done after research to help the organisation
understand attitudes within Lloyds TSB towards sexual orientation at work. A survey was
conducted with over 850 staff. The research revealed that lesbian, gay and bisexual (LGB)
staff can sometimes feel isolated. This occurs where they are unable to see other people like
themselves, either within their immediate work environment or in management positions, who
can act as role models.

Lloyds TSB is committed to making sure that employees who are LGB can be comfortable

being open about their sexual orientation at work. This is important because research shows
that people are likely to perform better when they can be themselves. Following the research,
the Group’s Equality & Diversity department set up a working group of LGB staff, who have
helped to develop the company’s sexual orientation strategy. This has led to a programme of
activities to provide the right support and culture so LGB staff can reach their full potential.

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The strategy includes a very active network for LGB staff, called Spectrum. The network is run
by volunteers and provides LGB staff with the opportunity to:
• meet and talk with others from similar backgrounds/circumstances • share experiences and issues in a supportive environment
• focus on their own development
• find role models and mentors (from similar backgrounds to themselves) who may not
always be visible in the workplace.
In addition to Spectrum, Lloyds TSB has put in place a number of other measures to support LGB
staff, including a mentoring database. This allows staff to search for a mentor who is of the
Mentor: a senior or
established employee who same sexual orientation or who has an interest in LGB issues. Mentoring is an important part of
will support the Lloyds TSB’s strategy for developing employees in the workplace. It involves an employee being
development of their teamed up with a more experienced employee. This practice is widely used in businesses. The
mentee. ‘mentor’ acts as a role model, guide and supporter for the ‘mentee’. The ‘mentee’ is given
advice and help about work-related issues and wider concerns by the ‘mentor’.
Mentee: an employee
who is being coached or
mentored by another
How does Lloyds TSB communicate its diversity
employee. strategy?
Lloyds TSB believes that staff perform best in an environment that is inclusive, open, flexible and
fair. Lloyds TSB has put in place support measures to help LGB staff reach their full potential. It
has also focused on creating an environment which respects and values difference. Lloyds TSB
has developed a detailed communications programme to ensure that sexual orientation becomes
a visible and high profile part of the Group’s wider Equality & Diversity Strategy. A news feature
about a relevant aspect of the Group’s sexual orientation strategy is published most months.
These are often introduced by Lloyds TSB’s most senior managers. This ensures sexual orientation
is treated as a serious business issue and opportunity. Lloyds TSB also sponsors external LGB
initiatives to raise the organisation’s profile with the LGB community. This positions the Group as
the bank and employer of choice for LGB people.

Lloyds TSB also provides a range of training courses and development tools to ensure staff
understand diversity and why it is essential for the company’s success. This helps raise
awareness at every level of the organisation. All Lloyds TSB staff are expected to complete a
multi-media training package called ‘Diversity – Achieving Success Through Valuing
Difference’. This is provided online or as a CD-Rom. The package describes what sexual
orientation is and highlights its relevance to staff and customers. The Equality and Diversity
Team also offers two intensive face-to-face management training programmes to raise
awareness and understanding of diversity and the benefits of adopting a progressive diversity
strategy as both an employer and service provider. These give senior and middle managers
The Times Newspaper Limited and ©MBA Publishing Ltd 2007. Whilst every effort has been made to ensure accuracy

the opportunity to identify and practice the skills needed to positively manage difference.
of information, neither the publisher nor the client can be held responsible for errors of omission or commission.

Equality and diversity are not just legal issues or something which is socially desirable, they are
essential to competitive advantage. In an ever-tightening employment market, companies need to
differentiate themselves as an employer of choice to ensure that they attract and keep the best
cross-section of talent. Lloyds TSB is also keen to get closer to its customers, to understand their
needs better and provide them with the right products and services. The Group believes that with
a diverse workforce it will be better placed to understand the needs of all its customers. It will be
able to explore the opportunities available across diverse communities.

1. What do you understand by the term a ‘diverse workforce’?

2. What is Lloyds TSB doing to create a diverse workforce?

3. What do you think will be the benefits to Lloyds

TSB of taking such an approach? What do you
think will be the benefits to Lloyds TSB employees?

4. How might the approach that Lloyds TSB is

taking help it to gain a competitive edge over
rival financial institutions?