Business – 2.1 HRM – Morale and welfare | e-Consult
2.1 HRM – Morale and welfare (1 questions)
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Short‑term effects often involve direct costs:
- Salary adjustments to achieve equal pay for equal work, which may increase payroll expenses.
- Investment in training programmes, consultancy fees, and the development of monitoring systems.
- Potential temporary productivity dips as staff adapt to new procedures and cultural shifts.
Despite these costs, immediate benefits can offset them:
- Reduced risk of legal claims and associated settlement costs.
- Improved employee morale leading to lower short‑term turnover.
Long‑term effects tend to be financially positive:
- Talent attraction and retention: A reputation for fairness attracts high‑quality candidates, reducing recruitment expenses.
- Enhanced performance: Studies show that gender‑balanced and inclusive teams achieve higher profitability, often measured as a 5‑10% increase in revenue per employee.
- Market expansion: Equality policies can open doors to new customer segments that value corporate responsibility, boosting sales.
- Cost savings from reduced turnover: Lower attrition cuts costs related to hiring, onboarding, and lost productivity.
Overall, while the initial outlay may strain cash flow, the strategic advantages of equality policies typically generate a net positive return on investment over a 3‑5 year horizon.