Competitive advantage through diversity Introduction

In 1901 county surveyor Thomas Hooley noticed a fallen barrel of tar that had split open in the road. The mess had been covered by waste slag from a nearby ironworks. At once Hooley observed that an excellent patch of road surface had been formed. A year later he had taken out a patent for mixing slag with tar and in 1903 formed the company that became Tarmac. Today Tarmac is still the UK market leader in road surfacing. It is also the country's largest quarrying company and key producer of aggregates (gravel), ready-mixed cement and mortar. Tarmac UK is sub-divided into two separate businesses:

Tarmac Ltd extracts key building aggregates and materials. Tarmac Building Products Ltd focuses on turning raw materials into products useable by the building sector. This case study focuses solely on Tarmac Ltd but will refer to it as Tarmac. Tarmac the company and Tarmac the brand are to be found on major construction projects all over the country. The new Wembley stadium, the M1 widening and London 2012 are high profile examples. It also has operations in the Middle East producing crushed rock, sand and gravel, asphalt and contracting activities.

With sales approaching 2 billion in 2010 Tarmac has just over 5,000 UK employees. As a firm in the heavy building materials industry, the company traditionally had a strong male bias in its workforce, but this is changing. Many posts are now open to men and women across a huge range of job roles. For Tarmac to succeed in a competitive market place, people are a critical resource. This is because the diverse talents of staff make Tarmac distinctive in the marketplace. Technical knowledge, corporate experience and the understanding of customer needs all make a critical difference. Drawing staff from the widest possible pool of talent is key to building and sustaining competitive advantage. This case study demonstrates how Tarmac is benefiting from developing a diverse workforce.

What is diversity and inclusion?

The idea of equal opportunities is concerned with eliminating discrimination. The purpose is to ensure workers have equality of access to recruitment, training and promotion opportunities in the workplace. This increases the pool of potential employees for firms. Recruitment decisions are therefore based on getting the right person for the job. Tarmac has a rigorous policy for equal opportunities. No current or potential employee should experience any discrimination arising from:

background gender ethnic origin age religion sexual orientation political belief disability.

Tarmac has taken this a stage further. It is now building a culture and vision that is known by the term Diversity and Inclusion. In this context, diversity means all the complex ways in which people are different. This includes visible differences such as gender or ethnic origin. The term also captures less obvious differences between people: religious or political beliefs, sexual orientation or education and social background. When a person comes to work, they bring with them their own thinking and learning style, personality type, experience, ambitions even their own sense of humour. A diverse workforce better reflects Tarmacs target market. It can be more adaptable to changes in the market because of the range of skills and experiences to draw from. A greater cultural understanding can also lead to the provision of a better level of service.

Inclusion strategy
To embrace all these differences, Tarmac is pursuing a strategy of inclusion. This means creating a working culture that values the differences between people. It does not try to stifle or devalue the individuality of staff. Such a culture is tolerant but also practical in recognising these differences and enabling every member of a team to exploit their personal strengths. The heavy building materials industry has developed a stereotype of older, male employees. This is not inclusive. To achieve change, effective training and the active example of leadership right up to CEO level are essential. Senior managers aim to provide Diversity and Inclusion support, guidance and resources for employees.

Diversity as a HR strategy

Like any other business, Tarmac has to add value. While Tarmac is highly efficient in controlling its costs, the company's real achievement lies in offering customers something special. This comes through the strength of relationships, the quality of service, the ingenuity of solutions and the reliability of its staff and systems. Recruiting, deploying and retaining the right people who can deliver this 'something special' is the task of the Human Resources (HR) department. Its work involves supplying and managing the human inputs that will fulfil Tarmac's overall mission:

To deliver the highest value from our resources for our customers, communities, employees and investors.
Diversity and inclusion is now an essential part of this strategy.
The firm actively searches for staff in the widest possible labour pool. For example, it advertises job vacancies on the Equality Britain website. Once appointed, keeping staff motivated is the key to quality and productivity. Retaining employees is also important. Low staff turnover can reduce recruitment and training costs, but perhaps more importantly, results in an experienced and skilled workforce. By valuing the distinctive qualities that each worker brings to a job, Tarmac can generate a 'feel good factor' among employees. This gives them the confidence to add that extra value for each customer. Tarmacs stance on diversity also promotes family-friendly working patterns for both male and female employees as well as anti-bullying or harassment policies. This approach is supported by a commitment to training and development. All employees receive core training to do their job effectively and safely. A full annual appraisal identifies personal goals and training needs. Tarmac offers a wide range of internal courses for all levels of staff. There are many opportunities to gain external qualifications including NVQs, BTECs and degrees.

Benefits of a diversity strategy

Diversity and Inclusion is a key dimension to HR management. It is also embedded in Tarmac's overall business strategy. This is driven by a compelling goal: Achieve the Exceptional. This is achieved through diverse talent and leadership within Tarmac.

Engage employees

Tarmac recruits in a highly diverse labour market to achieve corresponding diversity in its workforce. By motivating this diverse talent through appropriate training and development, then the exceptional becomes possible.

Develop markets
Tarmac needs the confidence and trust of its customers. A diverse workforce can build the necessary relationships with increasingly diverse customers in both existing and new markets. This can be a source of advantage that is difficult for competitors to copy.

Reduce Costs
Valuing all employees for who they are and what they offer increases motivation and improves retention. These are two powerful ways to reduce costs and raise quality. Differences in experience, attitude and values open new perspectives and breed a creative culture. This is vital since Tarmac is often in the business of finding solutions to client problems.

Manage assets
Diversity builds new networks of communications. Tarmac's quarries, processing plants and highway contracts typically have a high profile within local communities. A diverse workforce is best able to represent the company in gaining contracts and local approval for investment decisions.

Cement kiln at Tunstead

Tarmac has a large cement kiln at Tunstead near Buxton in Derbyshire. In 2009 the company planned a major expansion that would bring new jobs both in the construction phase and in subsequent operation. Before applying for the necessary planning permission, Tarmac ran an extensive consultation with the local community. A village exhibition explained the plans to local people and gave them the chance to discuss the proposal.

Act Responsibly
Tarmac is committed to accepting social responsibility in all its business activities. This means a high level of concern for all of its stakeholders, including the local environment. The diversity and inclusion strategy helps support the development of a workforce that is able to engage with stakeholders more effectively. This often leads to winning an informal 'licence to operate' through local acceptance or even approval of the company.

Quarry at Bayston Hill

Tarmac operates an important gritstone quarry near Shrewsbury in the West Midlands. In 2008 the company wanted to more than double its size. Local people, many of whom worked at the quarry, were consulted at every stage of the planning process. Tarmac used presentations and a video to keep stakeholders informed. Approval for the project was gained with no objections.

Diversity in practice
A diverse workforce will have employees from a variety of backgrounds.

Pedro is a Procurement Contract Data Manager at Tarmac. I'm originally from Columbia with a family background in the construction industry. Good luck took me to Tarmac where my specialism is procurement obtaining the right materials and services at the right time and at the right price. I joined Tarmac in 2008 and gained a place on the Tarmac Managers' Foundation Development Programme. I now lead a team of four staff. We work hard to deliver on our commitments to the business and to achieve the exceptional.
The nature of Tarmacs business means that historically the majority of its employees were male. Even now 86% of the workforce are men, although this is changing as women are being employed in a range of roles at different levels.

Mandy is a Human Resource Project Manager. I graduated from university in 2007 and being keen on people management, took a temporary job with Tarmac as a HR administrator. Thanks to internal management training, I gained my current job as an HR Project Manager in 2010. I'm now responsible for HR management information flows and the development of the HR intranet pages
Tarmac is keen to attract young employees into the workforce as well as more experienced workers.

Luke is a quantity surveyor with the firm.

I wanted to be a Quantity Surveyor and joined Tarmac in 2005 as a management trainee. During my first year I was given a wide range of tasks which included site supervision, estimating and basic quantity surveying. Soon I was involved in high profile projects such as the Liverpool Airport upgrade.
Tarmac is monitoring the progress of its Diversity and Inclusion policy. Some of this evaluation is qualitative and flows through the management structure. The HR department provides regular insight regarding both progress and problems. It also records the 'diversity range' of both external job applicants and internal applicants for training and promotion. In addition, the company carries out an annual diversity survey. This asks all employees (on a voluntary basis) questions about marital status, ethnicity and any disability.

Conclusion
Tarmac is deeply committed to a vision of diversity and inclusion among its staff. However, there are challenges to be addressed. Diversity is dynamic. Tarmac's workforce changes regularly. A diverse staff at one location may become much less diverse through promotions, resignations and retirement. In addition, economic conditions also change. Recruitment unavoidably slowed quite sharply following the recession and the public spending cuts of 2010/2011. There are no simple answers to these problems. Tarmac, however, is a pioneer in making diversity and inclusion central to its HR policy and wider business strategy. The quarrying and heavy building materials industries have been historically dominated by able-bodied men. This makes it a challenging area to develop a diversity policy, yet that only makes the need greater. A very significant part of Tarmac's overall competitive advantage depends on the collective interaction, talent and insight of its workforce. Diversity and Inclusion are not just a set of boxes to be ticked. They are a part of culture that enables Tarmac to stand out from competitors. Question 1: Describe the Diversity and Inclusion policy of Tramac. Question 2: Do you think Tarmac has been able to practice diversity management well? What are advantages that Tarmac has received by practicing diversity management. Question 3: What are challenges that Tarmac will face in its diversity management practices? What suggestions do you propose as an external consultant to Tarmac?
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