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Race at work: how hard are companies really trying?

Race at work: how hard are companies really trying?

Regardless of race or background, everyone at work should be able to realise his/her full potential. Steps that support equal advancement and participation in the workplace across ethnicities will be an enhancement to employers’ talent pools as well as address skills shortages.

The situation

Unlike their white British counterparts, a disproportionate number of ethnic minorities still face discrimination and disadvantage when trying to access and progress through employment in the UK.

Black and minority ethnic (BME) groups have only 62.8% employment rate compared to 75.6% for White workers according to McGregor-Smith Review (2017). For some ethnic groups, this disparity is even more pronounced; for example, people with Pakistani or Bangladeshi heritage had an employment rate of just 54.9%.

This group represents approximately one in eight people of working age but accounts for roughly 10% of the labor force, including just 6% out of top management posts. According to the Parker Review (2016) on Ethnic Diversity of FTSE Boards, there are only 85 Directors from ethnic backgrounds among a total of 1,050 directors in FTSE100 companies.

This problem involves not only fighting discrimination but also improving business performance as well. The economy would gain an extra £24 billion if there were full representation and progression by ethnicity within the labour market.

Usefulness of ‘BME’, ‘BAME’ and ‘ethnic minorities’

We understand that not every person would connect with a particular term. Therefore we advise employers to use sensitive language when discussing racial or ethnic diversity at workplaces and also seek advice from internal employees as well as external experts on how best they can do it. We adhere here to the guidance given by the Race Disparity Audit using "ethnic minorities" instead of "BME" or "BAME," both terms highlight certain groups while ignoring others. Government departments, NGOs, media organisations and other bodies frequently use BME and BAME when talking about ethnic minority groups in the UK. It is for this reason that we only include BME and BAME where research has been done using these terms.

The CIPD thinks that institutional racism is still a serious issue when it comes to employment and career advancement. We have examined the Government's most recent report on racial and ethnic disparities, and in a blog post titled "The Race Commission's conclusions fail to reflect the evidence and undermine efforts to tackle racism and discrimination in the UK," we have explained why we are disappointed by many of the findings.

Every person should be able to reach their full potential at work, regardless of race or background. Ethnicity pay reporting can act as a catalyst to spur action on the long-recognised but inaction on the need to foster more diverse and inclusive workplaces.

A new CIPD research highlights a lack of racial diversity at senior levels in organisations across UK. Employees from non-white British backgrounds are more likely than those from white British backgrounds to say they have experienced discrimination, think that their careers have not progressed as far as they expected them to go, or believe they must change part of themselves “to fit in” at work.

Besides individuals who lose job opportunities due to discrimination or bias, there is a smaller talent pool available for employers who do nothing about it and their career development will be uneven leading to underutilisation of human capital.

The CIPD has just released one of the most comprehensive studies on racial equality in the UK, known as the Race Inclusion Reports. These reports show that employee engagement in conversations about race equality needs to increase, that improved data gathering is needed and equal open career progression chances should be provided.

While there have been some changes in board composition, they are not sufficient nor fast enough. Ethnic diversity will make significant strides when built upon campaigns that have seen more women rise to the top of organisations.

Actions for Government

  • Create mandatory reporting on ethnicity pay gap using same quartiles as gender pay gap at large firms with over 250 employees.
  • Provide a single pay gap figure by comparing average hourly earnings for ethnic minority employees against those for white workers.
  • Ethnicity Pay Reporting requires organisations to include a narrative and action plan according to government guidelines.
  • The following account must update how much of this action plan has been carried out so far – moving towards real change in recruitment at all levels, array supervision training and promotion by ethnic group.
  • Choose a timeframe for reviewing the impact of ethnicity pay reporting and ask employers if they would like further information based on standardised ethnic categories.
  • Improve and support better HR management. Across all races and ethnicities poor people management practices prevail according to CIPD research findings.
  • Guidance for employer action: There is a clear need for practical guidance and case study examples to kick-start (and maintain) actions called for by both McGregor Smith Review while also developing better quality workforce data.

Recommendations For Employers

  • Increase organisational representation through diversifying workforce so they become more similar representationally than before relative to customers & wider society thereby attaining diversity pool that is more diverse and innovative customers service improved.
  • Determine the extent of ethnic diversity through HR data, then use this as a yardstick to examine structural and cultural impediments that maintain workplace disparities.
  • Auditing Hiring Practices to Eliminate Bias. This can include where employers source candidates from, how inclusive recruiters are in their recruitment materials, how line managers interview applicants and how employers’ agents carry out pre-employment screening procedures.
  • Revisit hiring practices for the purpose of maintaining diversity. Challenge barriers to career advancement and “cliff edges” whereby employees leave the workforce. Also consider intersectionality for instance race and gender on some issues discussed here.
  • Create an Inclusive Culture. Are policy/practice principles actively celebrating/encouraging difference? Are there complaints mechanisms for employees regarding inequality or calls to action? Understand your current “inclusive” workplace, what would make it more inclusive?