Inclusion is the productivity engine of our nation

In the wake of the productivity roundtable, the question is not just what reforms will follow, but whether we have the courage to confront the bigger issue.

Productivity is not only about tax, trade, or technology. It is about people. And at a time when polarised public discourse is leaving many people in Australia feeling less safe and less included, workplaces cannot afford to mirror that exclusion. Too many leave workplaces because they feel they don’t belong. Too many skills remain sidelined by bias. Until inclusion sits at the heart of our productivity agenda, Australia will continue to waste the very resource that could most powerfully reshape our economy.

Perhaps it is no coincidence that Australia’s productivity has stagnated during an era marked by growing division, polarisation and declining trust. If we are to rebuild our economy, we must first ask: how are we enabling workers to contribute at their best?

The evidence is clear. Diversity Council Australia’s research consistently shows employees in inclusive teams are three times less likely to leave their organisation. This is a critical lever when churn typically costs employers around 30% of salary for every replacement. Inclusive teams are also ten times more likely to be innovative; eight times more likely to collaborate effectively; and four times more likely to deliver excellent customer service.

These are not “soft” benefits. They are hard productivity drivers. In an economy where 13% of new hires leave before probation finishes, and it takes an average of 35 days for employees to reach full productivity, inclusion is a direct antidote to wasted investment and stalled growth.

This is not new. When we look back at the reforming spirit of the 1980s, we recall the headline acts: floating the dollar, cutting tariffs, deregulating markets, opening the economy. Less often remembered is that the Federal government of the day also understood productivity was not just about capital flows. The Sex Discrimination Act 1984, the Affirmative Action pilot program, and the establishment of the Council for Equal Opportunity in Employment were part of that reforming spirit.

In a landmark speech to Parliament in 1984, Prime Minister Bob Hawke said: “Women should now assume the place of their choice in our society. Affirmative action is the way to achieve it. Only if we utilise all available skills and resources will we have any hope of maintaining our standard of living.”

Just as he enshrined green and gold as our national colours and nudged Advance Australia Fair into becoming our anthem, Hawke knew inclusion was as much a statement of identity as it was a lever of reform.

The Affirmative Action pilot, championed by Senator Susan Ryan, brought together 28 companies and three universities to test strategies in recruitment, retention and progression. The goal was simple but profound: to prove equality at work was both socially just and economically smart.

In Hawke’s words “Our approach is not one which relies on the experience of other countries… we have developed a set of proposals which are appropriate for the Australian environment. They are the product of our unique industrial relations and business practice traditions.”

It was Australia doing it our way.

Industry stepped up. The newly formed Business Council of Australia partnered with the Confederation of Australian Industry, now the Australian Chamber of Commerce and Industry, in 1985 to establish the Council for Equal Opportunity in Employment. Its founding members included ANZ, AMP, AXA, BHP, Boral, Coles, IBM, Myer, Orica, Rio and Westpac.

What was intended as a five-year initiative became permanent. As the stubbornness of inequality endured, demand for expertise grew. By 2005, the Council formally became Diversity Council Australia, expanding its remit beyond gender to the full spectrum of diversity: race, culture, disability, sexuality, age, social class, and more. Today, DCA stands as the nation’s leading independent peak body for diversity and inclusion, serving over 1,300 member organisations, including some of Australia’s largest employers.

Forty years ago, inclusion was central to national economic prosperity.  In 2025, as DCA marks its 40^th anniversary, productivity is once again the defining challenge of our economy – we must see it the same way.  Inclusion remains the unfinished business of the 1980s reform agenda and business must continue to play its part.

As we rebuild our economy, let us recall the spirit that eleven founding members embraced to create DCA: a dramatic, positive self-regulation initiative – a private sector commitment to affirmative action.

Inclusion is the productivity engine of our nation. As business leaders, let us continuously ask: how are we enabling workforce capability, all of us, to contribute at our best? It’s not whether we can afford to invest in diversity and inclusion, but whether we can afford not to.