Businesses could benefit by taking more account of the religious needs of their workers, according to a new paper by the Institute of Business Ethics.

It says that sensitivity to the religious practices and ethos of the workforce can improve morale and lead to higher retention of staff.

One senior manager in a large multinational is quoted in Religious Practices in the Workplace as saying: "My experience is that employees that have appeared 'more religious' than others, are, for the most part, some of the company's most productive workers." The paper contains examples of companies that have policies on religious dress, time off for worship or celebration and other issues of observance.

"Allegations of discrimination on the grounds of religion are increasing," the IBE says. "Merely to include a clause in the corporate code of ethics that this will not be tolerated is insufficient."

But it also notes research shows that active members of religions are more likely to be trustful and engage in volunteering. "This perhaps suggests that those who practise a religion are more likely to have a sense of community - a quality valued in any workforce."