How can we close the disability employment gap?
Business leaders have a crucial part to play in reducing the disability employment gap. Improving the corporate approach to equality is not only be the right thing to do from a social justice perspective, but ultimately creates a more effective, profitable organisation, writes Kim Hoque, Professor of Human Resource Management at Warwick Business School.
“Doing good to do well” has been a popular refrain among business leaders over the past decade.
The power of social media and the Occupy movement following the financial crash alerted executives that keeping shareholders happy with an annual profit is no longer sufficient.
Consumers and employees want to see organisations doing more than concentrate on profit generation, hence we have seen the ushering in of the triple-bottom line, and a plethora of research showing how purpose-led businesses outperform their rivals.
But one purpose that has been perennially overlooked is the plight of disabled people, who continue to struggle to get into and remain in work.
This is demonstrated by the size of the disability employment gap, which is larger than for all other protected groups. It has remained stubbornly high in the UK at around 30 percentage points, with only 52 per cent of working-age disabled employees currently being in work in comparison with about 82 per cent of the non-disabled working age population.
This does not compare well with other EU countries. Across the EU as a whole, the disability employment gap is around 20 per cent. Finland, France, Latvia and Sweden have gaps of around 10 per cent, while in Luxembourg it is less than three per cent.
In addition, disabled people are over-represented in low-skilled and low-status jobs, are more likely to work in jobs for which they are overqualified, suffer a significant pay gap and have poorer access to career progression and training opportunities.
They also report lower work-related well-being and job satisfaction than their non-disabled counterparts. This is worrying given around a fifth of the working age population is living with a health condition or disability.
Why might (and should) business leaders be interested in addressing these issues? The first reason is a straightforward moral argument. Disability equality, as with all equalities issues, is a matter of social justice, hence it is something that all progressive, socially responsible employers should seek to promote.
This affects not only job seekers, but also the organisation’s existing workforce, given that most disabilities develop in adulthood once individuals are already in employment.
Business leaders, therefore, have a duty of care towards their employees as they age, enabling those who develop disabilities to stay in work. This requires significant and increased investment in occupational health services to help make adjustments and facilitate reintegration after the onset of long-term health problems or permanent disability.
A second reason relates to the shifting focus of UK Government policy. Until recently, this has focused largely on supply-side labour market activation aimed at getting disabled people off benefits and into job-seeking activity (via Work Capability Assessments, for example).
The effectiveness of these policies has proved limited, as the persistently high disability employment gap demonstrates, hence Government attention is now turning increasingly to the demand side, and on the role employers need to play in increasing disability employment.
One example of this is the recent introduction of voluntary reporting on disability employment. In November of last year, Sarah Newton, Minister for Disabled People, called on large companies to reveal the numbers of disabled people they employ, as part of a drive to build a more inclusive society.
Why closing the disability employment gap is in firms' interest
It is in business leaders’ interests to heed this call, as the clamours for mandatory reporting (as has been introduced for gender pay gap reporting, for example) are likely to increase should they fail to do so.
However, heeding this call will be far from straightforward, given that remarkably few employers collect accurate data on the number of disabled people they employ. Employers typically collect information on employees’ disability status when they apply for jobs.
However, this does not provide a reliable estimate of their total number of disabled employees, as it does not account for fluctuating conditions or for the emergence of disability once people are in employment. In addition, disabled people are often unwilling to disclose their disability status to their employer given they fear that doing so will lead to discrimination.
While better data can be collected via periodic anonymous staff surveys, even here assurances need to be given that the data will be treated entirely anonymously, and the purpose of the data collection exercise needs to be made clear in order to allay fears surrounding disclosure.
A further example of the UK Government’s increasing focus on the role of employers is recent changes regarding the Social Value Act. Last year, David Lidington, Minister for the Cabinet Office, announced that all Government departments must take social value into account within procurement decisions.
One of the ways companies bidding for contracts will be able to demonstrate social value is via the positive treatment of disabled employees and job seekers.
This could provide strong encouragement to business leaders to engage with the disability employment agenda, given that public procurement contracts are worth in the region of £242 billion per year in the UK. Winning a share of this business may, in future, be dependent on the manner in which they treat disabled employees and jobseekers.
Beyond this, the Government’s main initiative to encourage employers to improve their treatment of disabled people - the Disability Confident campaign - may undergo change in future. Disability Confident was launched in 2016 as the successor to the Two Ticks ‘Positive About Disabled People’ scheme.
It has three levels ranging from ‘committed’ (level one), ‘employer’ (level two) to ‘leader’ (level three). Employers signing up to the campaign are expected to make commitments regarding how they recruit, support and retain disabled people, with the commitments they are expected to fulfil increasing at higher levels. At level three, for example, employers are expected to encourage and mentor firms in their supply chain to become Disability Confident.
However, the UK Government is increasingly aware, given the process-oriented nature of the scheme, that it is possible for employers, even at level three, to secure accreditation without employing a single disabled person.
Indeed, our own research suggests that neither disability employment rates nor disabled people’s experiences of work are likely to be better in organisations that sign up than in those that do not, suggesting Disability Confident is largely toothless in encouraging employers to raise their game. As such, it would be no surprise to see the introduction of a level four in the future that includes objective targets for the number of disabled people employed, and more stringent monitoring and enforcement of those targets.
The signs are that the UK Government’s recent focus on the role of employers in increasing employment of disabled people is set to continue for some time to come. The Cabinet Office, in collaboration with the Number 10 Policy Unit, has recently launched a consultation on disability employment.
This is encouraging as it suggests disability employment policy is increasingly being viewed as a cross-departmental responsibility rather than solely the responsibility of the Department of Work and Pensions, but also as it suggests a greater willingness on the part of Government to explore the development of new policy initiatives.
It is therefore in business leaders’ own self-interest to identify ways in which they can engage with the disability employment agenda in anticipation of further Government initiatives, not least as this will mean they are better placed to influence and help shape these initiatives before they are implemented.
On their own, these are important reasons for business leaders to increase their focus on the employment of disabled people, but they are not the only reasons. Employers’ bodies, including the Confederation for British Industry, the Federation of Small Businesses and the Institute of Directors, have unanimously expressed alarm that the Government’s post-Brexit immigration plans and the curtailment of the free movement of people will exacerbate labour supply and skills shortages, which in turn will damage business growth.
However, one way in which these labour supply problems might be addressed is if employers are willing to think creatively about how to make their workplaces more accommodating to disabled people, thus enabling them to draw on the large pool of disabled people who are willing to work but are currently not in employment.
This is no doubt one reason why the Government is taking the disability employment agenda more seriously. It is becoming increasingly aware that unless solutions to labour supply problems can be found in the post-Brexit era, the economic consequences will be dire.
This in turn raises the question of what business leaders need to do to make their workplaces more accommodating to disabled people. Employers often express the fear that making the necessary adjustments will be dauntingly expensive and that they lack the necessary expertise, although the Government’s Access to Work scheme offers advice and financial assistance where necessary.
In reality, many of the adjustments disabled people often need are relatively low cost or cost-neutral, and are also increasingly viewed as good employment practices that employers should apply not just to disabled people, but to their whole workforce.
How to help disabled people back into work
This includes: time off for medical appointments; greater flexibility in working patterns; opportunities to telework; flexibility regarding the start and end time to the working day; and, on occasion, additional flexibility in the design of jobs to enable impairment-related restrictions to be accommodated.
Should employers implement such practices, they would likely gain not only from having fewer unfilled vacancies and happier disabled employees (as studies from the US demonstrate), but also from happier non-disabled employees, not least those with caring responsibilities. This in turn would lead to greater employee retention (of both disabled and non-disabled people) and a more motivated and productive workforce.
However, while these may seem like good ideas in terms of ways employers might be able to promote the employment of disabled people, it is unlikely they will gain much traction in the absence of leadership at the very top of the organisation.
There is now considerable research showing that where corporate approaches to equality are led from, and championed by, the boardroom, this provides the necessary impetus to cast equality as a sufficiently high priority for genuine action to be taken across the organisation.
It is incumbent on business leaders, therefore, to seek to develop a new culture in which disabled people are viewed as an asset to the organisation and their contribution is genuinely valued, thus enabling them to thrive.
This will not only be the right thing to do from a social justice perspective, but businesses may well gain from greater employee retention, smaller skills gaps, a more motivated workforce and ultimately a more effective, profitable organisation.
2 May 2019
Kim Hoque is Professor of Human Resource Management and teaches Equality and Diversity at Warwick Business School. His recent research has focused on: new forms of union representation (union learning reps, equality reps and union disability champions); government policy with regard to systems of vocational education and training; equal opportunities; employment relations and training in the SME sector; agency working in the public sector.
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