Promoting diversity in the workplace can save businesses thousands, a report from employers’ organisation CBI and the Trades Union Congress (TUC) suggests.

The report claims companies such as the law firm Pinsent Masons saved money by improving staff retention rates when it focussed on gay and lesbian equality.

Its lawyer turnover rate has fallen from 17 per cent to 12 per cent, a substantial saving when losing a solicitor costs a law firm an average of £110,000.

Another case study in the report is recruitment and training provider PPDG, which has diversified its workforce and increased its market share as a result, the research shows.

Richard Lambert, director-general of the CBI, said: “Employers who take steps to encourage a more diverse workforce notice huge benefits from doing so, whether it is hiring skilled staff, understanding their customers’ needs better or more fundamentally through improved morale and productivity.”

TUC general secretary Brendan Barber said: “The need to unlock the talents of all – to create a truly representative workforce – is even more crucial at a time of economic uncertainty. The issue is not whether business can afford to diversify, but whether it can afford not to.”

The report, Talent not Tokenism, shows firms how diversity can be beneficial and gives guidance on how to take positive action – including removing bias against older workers, developing strong links with local communities and offering flexible shift patterns to help working parents – rather than positive discrimination.

Positive discrimination – where members of a particular group are treated more favourably – is illegal, whereas positive action – giving support to certain groups – is encouraged by the government.

The report aims to show companies that promoting diversity need not be expensive, complex or a legal minefield for business.