The Cost of Getting It Wrong – The Business Impact of Non-Inclusive Hiring

An inclusive hiring process isn’t just a "nice to have" - it’s a business necessity. Companies that fail to embed equity, diversity, and inclusion (EDI) best practices into their hiring processes risk legal penalties, reputational damage, and financial losses.

At Inclusive Hiring Works, we help organisations identify and eliminate barriers in their recruitment processes to avoid costly mistakes. Here’s why getting hiring wrong can be an expensive mistake.

The Financial Cost – Legal Risks & Employment Tribunals

Hiring discrimination isn’t just ethically wrong - it can result in costly legal consequences.

Discrimination claims can lead to:

• Employment tribunals that drain financial and internal resources.
• Compensation payouts for unlawful hiring decisions.
• Legal fees that can cost organisations thousands of pounds.

Case Study – Mr James vs Coedffranc Community Council (2018)

Mr James, a 67-year-old job applicant, took legal action after being asked age-related and health-related questions during the recruitment process.

Tribunal Findings:

• The hiring panel was not trained in inclusive hiring, unconscious bias, or protected characteristics.
• The Council was found to have discriminated, leading to a settlement of up to £60,000, covering compensation for loss of earnings, Injury to feelings and legal costs.

For most businesses, the impact of employment tribunals goes far beyond compensation payouts - it includes:

• Legal representation fees – Estimated between £8,000 - £30,000 per case.
• Lost productivity – HR teams and leadership involved in litigation instead of business growth.
• Increased insurance premiums – Higher legal protection costs for future disputes.

A proactive inclusive hiring strategy can help businesses avoid these financial risks.

The Hidden Costs – Reputation, Talent, and Customers

Beyond legal fees, a non-inclusive hiring process can damage a company’s brand, workforce, and customer relationships.

1. Reputational Damage

Discrimination cases make headlines. Employers involved in hiring-related legal disputes risk long-term brand damage, especially as job seekers increasingly use platforms like:

• Glassdoor – Candidate reviews influence future job applications.
• LinkedIn & Social Media – Negative hiring experiences spread fast.
• News & PR Coverage – Public tribunal outcomes can impact a company’s credibility.

A single lawsuit can make it significantly harder to attract top talent.

2. Loss of Future Diverse Candidates

Candidates talk. If job seekers experience bias, inaccessibility, or discrimination, they warn others.

Data shows that:

• 67% of job seekers say a company’s diversity and inclusion policies impact their decision to apply.
• Underrepresented candidates are less likely to apply if they see repeated failures in equitable hiring practices.

Failing to attract diverse talent means missing out on the best candidates.

3. Potential Customer Loss

Your job applicants are also potential customers - a bad hiring experience can lead them to take their business elsewhere.

Research reveals:

• 58% of consumers say a company’s commitment to diversity influences their purchasing decisions.
• Brands that are seen as non-inclusive risk losing key customer demographics, leading to revenue loss in both B2C and B2B markets.

Inclusive hiring isn’t just about recruitment - it’s about brand loyalty.

Need help with EDI hiring in your organisation?

Implementing inclusive hiring practices can help remove barriers, attract diverse talent, and build a workforce that thrives.

At Inclusive Hiring Works, we provide:

• Inclusive Hiring Health Checks – Comprehensive audits of hiring processes
• Workshops & Training for Talent Acquisition Teams – Practical skills to drive inclusivity
• Inclusive Hiring Training for Hiring Managers – Ensuring equitable hiring decisions

Want to make inclusive hiring the norm in your organisation? Read more about our services.

Book your Free Discovery Call to learn how we can support your business!