Is social segregation a business issue?

Jon Yates, co-founder of The Challenge, explores the relationship between a lack of integration and the strength of the UK's economy. This article has also been published on CBI's Great Business Debate website.

It might seem obvious that a lack of integration between people from different ethnic and age groups and socio-economic backgrounds could have serious implications for the future of British society, but have you considered that it might also have a big impact on the strength of our economy? 

In fact, new research indicates that social segregation costs the country’s coffers billions of pounds every year.

The thinking is actually pretty straightforward. In order for businesses and the British public to benefit from the highest levels of economic productivity, people with the right skills have to be able to find their way into the right jobs.

At present, however, a lack of mixing amongst different groups of people is preventing companies from recruiting individuals with the know-how needed to get the job they need doing done — dragging down those companies’ chances of success and denting the UK’s overall economic performance.

Too often, when it comes to recruiting new staff, exclusive and informal networks based along the lines of social grade, geographical location and ethnicity limit the talent pool available to employers. One in four CEOs say that they have been unable to pursue a market opportunity or have had to cancel or delay a strategic initiative because they were unable to recruit staff with appropriate skills or experiences.

Recent research indicates that this problem costs the UK economy an estimated £700 million annually. The big question facing business leaders, then, is how we might go about opening up these networks.

Research carried out by The Social Integration Commission — an independent inquiry into the extent of integration in the UK, chaired by CEO of the Royal Society of the Arts Matthew Taylor – is helping business leaders to understand how more social mixing would help to grow our economy.

The Commission estimates, for example, that the low levels of interaction between those who are employed and those who aren’t subtracts approximately £1.4 billion from the country’s balance book each year through stretching out periods of joblessness.

Having just one additional employed friend makes it 13 per cent more likely that someone who is unemployed will find a job, but the out of work are amongst the most socially segregated groups in our society. It’s clear that the company we keep is having a big impact on the health of our companies!

By taking measures to open up their professional networks and recruiting from different talent pools, business leaders could not only strengthen our society, but also boost their own company’s productivity and make Britain a more competitive and dynamic force within the world market. This spring, the Social Integration Commission will publish a series of recommendations as to how both large and small businesses could do just that.

No single recruitment initiative or policy idea will suit every company, but by recognising the importance of this challenge and doing what they do best - figuring out what works and innovating - British businesses could make huge strides towards promoting integration inside and outside the workplace. 



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