Discrimination payouts could rise unless employers change their recruitment practices

UK organisations could be leaving themselves open to discrimination payouts of millions of pounds from job seekers, according to new figures on the jobs' market published today by The Work Foundation.

Even though sex discrimination payouts have recently passed the 2 million mark, The Work Foundation found that one third of responding organisations were failing to monitor the diversity of external job applicants - a simple but important procedure that can spotlight areas of discrimination, and save recruiters millions in tribunal claims.

The survey - Recruitment and Selection - of almost 500 employers, shows that they are also failing to monitor the diversity of internal applicants - 38% do not monitor at all, and 28% do not know if their organisation monitors internal job applicants for race, sex and age.

According to employment law, it is illegal for employers to discriminate against applicants on the basis of sex, disability or race. It will soon become illegal to discriminate on the grounds of age, sexual orientation and religion or belief. It is the employer's responsibility to make sure the law isn't being broken. Monitoring is recommended as a way of identifying possible bias.

The Work Foundation report also highlights the tendency amongst many organisations to encourage word of mouth job applicants. Just over a quarter (27%) of respondents say they have a policy of actively encouraging employees to recommend friends and just under a quarter (22%) do the same with family members.

Advisory bodies warn that although this may be economical, it is likely to lead to a much smaller pool of suitable applicants and does not normally satisfy equal opportunities requirements because it tends to perpetuate any imbalance in the workforce. The Commission for Racial Equality and the Equal Opportunities Commission both warn against word of mouth recruitment where the workforce is predominantly one sex or racial group.

And despite skills shortages, few organisations target less obvious labour pools. Thirty-three percent of firms target women returners, but very few firms aim for applicants from among the over 50s, the long-term unemployed, ex-offenders, people with long-term health problems, people who have had mental health problems and refugees.

Theo Blackwell, policy specialist at The Work Foundation, says: Business opportunities as well as the requirements of employment law are pushing diversity up the ladder of workplace issues. More practically, companies should also recognise the benefits of widening their choice of job applicants, and the business opportunities that recruiting from the widest possible pool of talent can bring.

Key survey findings:

The local press is the favourite way of attracting external applicants: 85% advertise in the local press, 75% use recruitment agencies, 68% use the national press, 63% job centres, 56% the trade press and 55% the internet. Radio, community letters and community groups are the least popular at 11%, 10% and 9% respectively.
41% of organisations advertise all vacancies internally first.
Almost half (47%) of the organisations accepting word of mouth recommendations do not monitor for race, sex or age.
Organisations are more likely to monitor for race and sex than they are for age.
34% or companies target women-returners, 23% target job-sharers, 18% mature, recently qualified graduates, 17% target the over-fifties. Few encourage applications from ex-offenders (5%), people with long-term health problems (4%) or refugees (3%).
Few job ads give information about the employer's ethical stance. Only 24% of companies include this.
Applicants are fairly likely to have their appearance and body language assessed. 40% of companies ask interviewers to assess appearance and 32% ask interviewers to assess nerves.
Psychometric testing remains popular with 54% of organisations.