How to build a people strategy that supports performance

Organisations are under pressure to do more with less. According to CIPD, cost management remains the top priority for 58% of UK employers, while improving productivity was cited as the second biggest priority. At the same time, a third (33%) of employers report hard-to-fill roles, showing that organisations are trying to manage costs while still dealing with skills shortages.

There is pressure around productivity, profitability, retention and skills, but how organisations manage their people can influence their ability to attract, upskill and retain talent, while creating the conditions for high performance. This is where fairness and inclusion need to connect to wider business priorities, moving beyond the traditional business case for diversity. Fairness and inclusion influence the employee experience, and the conditions in which people can contribute effectively and stay with the company.

As Dan Robertson, Managing Director of FAIRER Consulting, explains, “The reason we're talking about inclusion is because some groups are excluded. And then that automatically leads us to question which groups are excluded, which leads to a conversation about diversity.” He points to the tension in separating the two: “There's an irony that we want to talk about inclusion without talking about diversity, and intellectually and strategically, that doesn't make any sense.” The starting point, he argues, is fairness. “We're trying to promote a principle of equity which overrides all of this.”

These are questions we will explore at the FAIRER Conference London, where HR, inclusion, L&D, wellbeing and business leaders will come together to examine what the changing workplace means for people strategy and organisational performance.

The problem: performance depends on the conditions people work in

Historically, organisations have assumed that more diversity equals more profit, but the evidence suggests that high performance is linked to workplace culture, employee experience and leadership capability. For example, Enterprise Research Centre found positive associations between flexible working and product innovation, and also between wellbeing measures and product and process innovation. Organisations need to connect DEI more closely with business strategy, outcomes, leadership and governance, rather than treating it as a standalone agenda.

Leaders therefore need to consider the conditions that allow people to perform well. Management is one of those conditions. Employees who have a positive view of their line manager are more likely to feel competent and effective in their role, less likely to say work negatively affects their health, and less likely to consider leaving their organisation.

AI is also changing what organisations need from their people. A Microsoft survey found that as AI tools take on more work, human judgement is becoming increasingly important, with critical thinking among the top-ranked skills. Organisations will increasingly need people who can exercise judgement, challenge assumptions and work effectively with others. Dan sees this as part of a wider change in the skills organisations will need. “With AI and the future of work and inclusion, we’ve got to make sure that we’re really clued into skills like curiosity, perspective taking, empathy, promoting psychological safety and so on.” 

Psychological safety, a term coined by Harvard Business School professor Amy Edmondson, refers to feeling safe to take interpersonal risks, to speak up, to disagree openly, and to raise concerns without fear of negative repercussions or pressure to sugar coat bad news.

 “If we don't have that psychologically safe environment, how can we innovate as an organisation? If I don't feel that I can speak up or admit to my mistakes, then I'm going to do my very best to avoid making mistakes, which means I'm not being innovative,” says Dan. Inclusion can therefore affect people's willingness to challenge, collaborate, innovate and contribute – a conversation we will be continuing at FAIRER Conference London. 

The context: the employment relationship is changing

The conditions people expect from work are changing too. Flexible working has become an important part of how organisations attract and retain talent. 80% of employees say flexible working has had a positive impact on their quality of life, while 61% of employers say offering flexible working is important for attracting staff and addressing skills and labour shortages, according to the CIPD. Around 1.1 million UK workers also said they had left a job in the previous year because of a lack of flexible working.

Expectations around safety and respect also continue to evolve. From 30 October 2026, employers will have to take “all reasonable steps” to prevent sexual harassment, rather than the current requirement to take “reasonable steps”. Employers can also become liable for third-party harassment, such as harassment from customers or clients.

Organisations need to consider whether people feel safe to raise concerns, whether reporting routes are clear, whether concerns are taken seriously and whether leaders are held accountable. These are practical questions about how people experience fairness and respect at work. A workplace where people cannot safely challenge decisions or raise concerns is unlikely to get the best thinking and performance from its workforce. 

The challenge: we are still managing people issues in silos

Many organisations still manage people issues through separate departments and agenda. “Wellbeing might belong to HR, and inclusion might belong to DEI, but employees actually experience them as one workplace reality,” says Dan. “This situation makes the psychological contract a useful lens.”

The psychological contract, a concept developed by psychologist Denise Rousseau, describes the beliefs employees and employers hold about their reciprocal obligations to one another, beyond the formal employment contract. Because these expectations are subjective, employees form their own perceptions of what the organisation has promised or owes them.

For example, an employee may believe that consistently strong performance will lead to opportunities for progression. If that opportunity does not materialise, they may perceive a breach of the psychological contract. This makes it a useful lens for understanding why fairness and consistency matter throughout the employee lifecycle, and why organisations need to examine how decisions are made, not simply the intentions behind them.

Instead of simply reporting that attrition has increased, for example, employers need to ask whether particular groups are leaving at higher rates, whether people feel they have access to progression, whether they feel a sense of belonging or whether they believe they are being treated fairly. The same applies to engagement, conflict, innovation and psychological safety.

Despite the importance of collecting such data, only 53% of FTSE 100 companies have a dedicated people section in their annual report, while reporting on areas such as training, skills and turnover remained limited. As Dan explains, “We need clearer workforce data linked to business strategy and outcomes. Data – whether it’s qualitative or quantitative – should be your best friend as a DEI professional. It ultimately results in organisational trends and patterns.”

The solution: a joined-up, evidence-led people strategy

To promote corporate cohesion and reduce siloed working within the workplace, organisations need to develop a more connected way of understanding the employee experience and the conditions that shape it. That means bringing HR, L&D, wellbeing and inclusion closer together around the organisational problems they are trying to solve. It also means recognising that fairness does not necessarily mean treating everyone identically. Fairness is about whether people have equitable access to opportunity and whether decisions and processes produce outcomes that people experience as fair.

At FAIRER, we work with organisations to identify barriers across the employee experience and turn those insights into practical changes. HaysMac is one example of this approach in practice. We worked with the firm to audit its approach to inclusion and identify opportunities to embed it more deeply across leadership, recruitment, talent development and learning. This led to an increase in its employee inclusion score, with the work later extending into leadership and culture.

 Our approach is grounded in the principles behind the FAIRER name: Fairness, Accessibility, Inclusion, Respect, Equality and Representation. Together, these principles provide a practical lens for considering how people experience work, where barriers may exist and where organisations can take targeted action. They also reinforce the idea that inclusion cannot be considered in isolation from the wider employee experience. 

The FAIRER Framework

Together, these principles provide a practical lens for understanding the conditions behind people's experiences and identifying where targeted action is needed.

A joined-up approach requires organisations to measure more than activity. Representation remains important, but it does not tell you how people are experiencing work. Organisations should combine workforce data with employee feedback and lived experience to understand what is happening beneath the headline numbers.

As Dan puts it, “Culture is not found in a survey score alone; it lives in the everyday conversations, behaviours and emotions of humans who shape and are shaped by their physical and mental work spaces.” Where possible, data should be disaggregated so overall averages do not hide differences between groups.

Five takeaways for HR, inclusion, L&D and wellbeing practitioners

1. Connect inclusion to business priorities. Start with your organisation's strategic priorities. What workforce or business problem are you trying to influence? Understanding the specific business drivers gives organisations a stronger basis for conversations with leaders and helps move inclusion from a standalone agenda into organisational change.

2. Look beyond representation. “Representation tells you who is in the organisation, but you need to turn your percentages into people,” advises Dan. Representation does not tell you who is progressing, who is staying, who is leaving or who feels able to contribute and speak up. Combine workforce data with employee feedback and lived experience to understand what is happening beneath the headline numbers.

3. Build capability through managers. Inclusive cultures are shaped through everyday leadership behaviours. Managers need the skills to create psychological safety, have difficult conversations, recognise different needs, challenge bias and give people opportunities to contribute.

4. Bring people agendas together. Employees experience inclusion, wellbeing, learning, leadership and performance as one workplace reality. Practitioners should look for connections between these agendas rather than developing separate interventions that address the same underlying issues.

5. Measure what matters.  Don't measure activity simply because it is easy to measure. Connect people measures to the outcomes that matter to your organisation, such as retention, progression, absence, engagement, workforce capability and productivity. 

Continue the conversation with us

Explore our Inclusive Leadership programme, designed to build managers’ competence and confidence to lead inclusively, or discover more about our bespoke DEI audits, which help organisations identify barriers, understand their people experience and take targeted action.

Join us at FAIRER Conference London

Want to hear more on this topic? Join us at FAIRER Conference London, where HR, inclusion, L&D, wellbeing and business leaders will come together to consider how organisations can connect people strategy with business priorities and respond to the commercial pressures they face.