Workplace diversity and inclusion is important for 75% of SME employees

Published on 15/11/2021 by Sukanya Awasthi

By any measure, the UK is a diverse place to live. According to data from the latest published census in 2011, 13% of the population belong to a non-white ethnic group defined as Black, Asian, Mixed, or Other. But diversity also refers to other characteristics, including gender, gender identity, sexuality, religion, age, class, and physical ability.

Workplace diversity and inclusion for SMEs in UK

The topic has become more prominent in recent years for several reasons, including:

  • Social movements like Black Lives Matter, which have highlighted the inequalities between ethnic groups
  • Awareness campaigns such as #MeToo, which encourage open conversations about issues that affect people differently
  • Legislation, such as gender pay gap reporting, which has meant that employers must be more proactive in identifying and tackling diversity issues

To understand more about how people think about workplace diversity in the UK, we surveyed 1,001 employees between the ages of 18 and 65 about their own attitudes and experiences. Respondents all worked at small to midsize enterprises (SMEs) companies with 250 employees or less. You can find our full methodology at the bottom of this article.

We also recognise that SMEs can struggle to manage diversity, so we have included tips and links to talent management software that may help.

This article is part one of two looking at employee attitudes to diversity and follows on from our previous survey of SME managers.

What is workplace diversity and why does it matter to SMEs?

There is no legal definition of a ‘diverse’ workforce, but there are nine legally protected characteristics in the 2010 Equality Act that employers should know about. These are:

  • Age
  • Disability
  • Gender reassignment
  • Marriage and civil partnership
  • Pregnancy and maternity
  • Race
  • Religion or belief
  • Sex
  • Sexual orientation

A diverse workforce is therefore one that takes these characteristics into account and incorporates a mix of people from different areas of society. For the purpose of our survey, we used the following definition:

Workplace diversity
The collective mixture of employees’ differences and similarities, including individual characteristics, values, beliefs, experiences, backgrounds, preferences, and behaviours.

When we asked our survey participants about which types of diversity are represented within their company, age was the most common, cited by 61%. This was closely followed by gender (53%) and racial/ethnic group (50%).

Types of diversity within company bar chart

The rise to prominence of diversity as a topic has several implications for employers. Firstly, it matters to employees. 75% of the people we surveyed said that diversity in the workplace is important to them compared with 5% who say that it is not. Similarly, 57% say it’s very important to work for a company that supports social movements such as Black Lives Matter and LGBTQ+ rights.

Who is diversity for?

20% said that they are ‘unaffected by [diversity in the workplace]’. This may be due to a perception that because they do not belong to a minority group, that diversity initiatives would bring them no benefits. Studies show that this is not the case.

A more diverse workplace has many benefits for both employers and employees. As noted above, most employees say that diversity is important to them. To attract and retain talent, companies should show that they are being proactive in promoting diversity.

Diverse workforces also bring a broader mix of backgrounds and perspectives. This can help organisations think and act differently, with positive results. Gartner research, for example, found that in a diverse workforce, performance improves by 12% and intent to stay by 20%.

The task for SMEs, therefore, is to understand the case for diversity in the context of their own business and the communities they work with.

Are SMEs acting on diversity?

Diversity in the workplace is not something that happens overnight. In most cases, companies must actively pursue it, which means defining policies and taking specific actions to meet their diversity goals. As in many areas of business, large organisations often have more resources to do this. They have dedicated HR teams, sometimes employees with specific diversity and inclusion remits not to mention the necessary budgets to dedicate.

Nevertheless, more than two-thirds (68%) of the SME employees who responded to our survey say that they feel their company does enough to promote diversity and inclusion in the workplace. The most common diversity policies include ‘actively hiring a more diverse workforce’ (41%) and ‘implementing a culture of collaboration and fairness’ (37%). 

Diversity and inclusion policies in company bar chart

SMEs can use internal communications software to encourage an open and collaborative culture in the workplace. This allows management to share company information with staff, but also allows staff to discreetly communicate with managers about equality and diversity.

When it comes to diversity and inclusion policies:

  • 57% of employees say their company has one in place
  • 27% of employees at SMEs that do have a policy say they do not follow it seriously
  • 11% say their company has no diversity and inclusion policy and no plans to put one in place
  • 24% of SME employees do not know if their company has a diversity and inclusion policy

What is a workplace diversity policy?

A workplace diversity policy sets out an organisation’s goals and standards when it comes to diversity. It also provides some detail about how these can be achieved and maintained, as well as what should be done if they are not.

Advisory, Conciliation and Arbitration Service (Acas), which works with employers and employees to improve workplace relationships, has a diversity policy template that organisations can download and adapt to their own needs.

Given that a quarter of employees in our survey did not know if their company had such a policy, SMEs might consider policy management software, which helps organisations create policies, distribute them, demonstrate employee understanding, and comply with relevant regulations.

The Chartered Institute of Professional Development, which sets professional standards for HR and people practices in the UK, also has a comprehensive and practicable guide to diversity management in the workplace, as well as a report on which the guidance is based.

How do employees rate SMEs for diversity?

Our survey suggests SMEs are performing well when it comes to diversity and inclusion. But they should actively try and improve their policies and actions and not rest on their laurels.

The good news for managers is that 85% of employees in our survey view their company positively when it comes to implementing and promoting diversity and inclusion.

Implementation of diversity and inclusion policies in company pie chart

Open, collaborative workplace cultures that embrace new ways of thinking seem fairly widespread: 59% of SME employees say their company is open to receiving ideas from everyone. However, 29% say only certain ideas are embraced, depending on who suggested them. A small number (12%) said ‘We do not like change in our company culture and structure.’

No organisation is perfect, and there are many systematic inequalities in society that will not go away without serious effort from employers, employees, and legislators. Most of the respondents to our survey (59%) say their company has ‘a lot’ or ‘a bit’ of work to do to improve diversity and inclusion. 

Diversity and inclusion in workplace pie chart

Did you know? Recruitment software can help organisations overcome unconscious bias in their hiring decisions. By removing key data such as applicant name, age, and ethnicity, the software can help companies hire more equitably.

Next time

In the next part of our diversity study, we will look at some specific areas, including the gender pay gap, diversity in leadership, and discrimination in the workplace.

Looking for talent management software? Check out our catalogue!


To collect the data for this report, we conducted an online survey on diversity and inclusion in October 2021. Of the total respondents, we were able to identify 1,001 UK respondents that fit within our criteria:

  • UK resident
  • Over 18 years and under 65 years of age
  • Work in an SME which has up to 250 employees

This article may refer to products, programs or services that are not available in your country, or that may be restricted under the laws or regulations of your country. We suggest that you consult the software provider directly for information regarding product availability and compliance with local laws.

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About the author

Content Analyst for the UK market. Committed to offering insights on technology, emerging trends, and software suggestions to SMBs. Plant lady, café hopper, and dog mom.

Content Analyst for the UK market. Committed to offering insights on technology, emerging trends, and software suggestions to SMBs. Plant lady, café hopper, and dog mom.