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Even though the total damages paid out for sex discrimination claims recently passed the £2m mark, the Work Foundation found that 33% of organisations fail to monitor the diversity of external job applicants - a simple but important procedure that can detect areas of discrimination and save millions of pounds in employment tribunal claims.
The survey of almost 500 employers found 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.
Under UK 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 is not being broken. Monitoring is recommended as a way of identifying possible bias.
The Work Foundation report also highlighted a tendency in many organisations to encourage word-of mouth-job applicants: 27% of respondents said they had a policy of actively encouraging employees to recommend friends and 22% do the same with family members.
Advisory bodies warned that although this may be economical, it is likely to lead to a much smaller pool of 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 warn against word-of-mouth recruitment where the workforce predominantly comprises one gender or racial group.
And despite skills shortages, few organisations target less obvious labour pools. Thirty-three per cent of firms target women returners, but very few firms aim for applicants who are over 50, long-term unemployed, ex-offenders, people with long-term physical or mental health problems, or refugees.
Theo Blackwell, policy specialist at The Work Foundation, said, "Business opportunities as well as the requirements of employment law are pushing diversity up the ladder of workplace issues.
"More practically, companies should 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."