Published: 06/10/2005 Volume 115 No. 5976 Page 32

HSJ's workforce expert on the price of equality

Back in the early days of the internal market, as a junior clinical services manager, I was confronted with the urgent need to price cataract surgery. Staring at a blank spreadsheet, with time and lack of knowledge against us, the ophthalmology directorate accountant and I turned to the nearest telephone and added a zero to the extension number. We had a price.

Months later it turned out to be pretty close.

Now, the business case for diversity is seen as benefiting the balance sheet. This approach has captured the campaigning hearts of the commercial sector, as well as those running public sector organisations.

The Cabinet Office has recently launched just such a case through the Public Services Forum, a body that unites national trade union and public sector leaders with senior officials from government departments.

This business-like argument supplements the more traditional moral and social case, which argues that all staff should be treated fairly and equally, whatever their background, but has never actually been priced. The argument is that services and products will be high quality and produce a better return. However, the economic campaigning mantra has not led to a specific calculation of what a poor-performing employer in this area would incur to its bottom line. This I will now attempt.

Take a classic NHS employer, with 3,000 staff and a turnover of£150m, treating one way or another 500,000 patients each year. Assume it is lower quartile in the way it tackles and promotes diversity and equality.

With a reputation that discourages applicants and a work experience that means staff leave at a rate faster than elsewhere in its local labour market, high turnover and recruitment difficulties are costing it£1m in lost productivity, extra advertising and agency costs. Legal action taken by staff who have evidence of discrimination adds£300,000 to legal fees and compensation payments.

There is a direct impact on the quality of patient services when diversity is low down the agenda. Patients find services less accessible; faulty communication produces inaccurate diagnoses. As patients choose other providers, revenue drops and mistakes need rectifying, adding unnecessary costs. All in, if this affects 5 per cent of patients, this means another financial blow of£2m.

When talented staff do not get promoted, it weakens leadership and decision-making. Teams that value diversity are more productive and better places to work. Lack of teamwork is inefficient and increases unit labour costs. Another£5m. At this unsuspecting trust, the business case for equality and diversity would save it£3.8m each year.

David Amos is director of workforce at University College London Hospitals foundation trust and is former DoH deputy director of human resources.