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Race at work: how hard are companies really trying?

Race at work: how hard are companies really trying?

Every person should be able to reach their full potential at work, regardless of race or background. Employers will increase their talent pool and address skill shortages by taking steps to support equal advancement and participation in the workplace across ethnicities.

The situation

Compared to their white British peers, a disproportionate number of people from ethnic minorities still experience discrimination and disadvantage in the UK when trying to enter and advance in the workforce.

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

Although people from ethnic minorities hold 10% of the workforce and 6% of top management positions, this group makes up about 1 in 8 of the working-age population. Only 85 of the 1,050 director positions in the FTSE 100, according to the Parker Review (2016) of the ethnic composition of UK boards, are held by directors of color.

Not only does solving this problem involve combating discrimination, but it also involves improving business performance. According to estimates, full ethnic representation and advancement in the workforce would benefit the economy by an additional £24 billion.

Use of the terms ‘BME’, ‘BAME’ and ‘ethnic minorities'

We are aware that not everyone will connect with a particular term. As a result, we advise employers to use sensitive language and terminology when discussing racial and ethnic diversity. They should also make sure to consult with both internal staff members and outside experts. Here, we adhere to the advice of the Race Disparity Audit and use the term "ethnic minorities" rather than the terms "BME" or "BAME," which highlight some groups while leaving out others. However, when referring to ethnic minority groups in the UK, government agencies, nonprofit organizations, the media, and other groups frequently use the terms BME and BAME. Therefore, we only make reference to BME and BAME in the context of research that has already 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-recognized but inaction on the need to foster more diverse and inclusive workplaces.

According to CIPD research, there is a serious lack of racial diversity at the top of UK organizations. Employees from ethnic minorities are more likely than those from white British backgrounds to report experiencing discrimination, believing that their career advancement has fallen short of expectations, and feeling the need to alter certain aspects of their behaviour to "fit" into the workplace.

In addition to the financial cost to individuals of passing up job opportunities due to prejudice or bias, employers who do nothing will have a smaller talent pool, and unequal advancement opportunities mean that people's skills will be underutilised.

One of the most comprehensive studies on racial equality in the UK, the Race Inclusion Reports, was just released by the CIPD. The reports demonstrate the need for increased employee involvement in discussions about racial equality, improved data collection, and equitable and open career advancement opportunities.

While there has been some shift in board composition, it has not been to the extent or at the pace required. It is important to build on the success of campaigns that have increased female representation at the top of organisations to make significant strides with ethnic diversity.

Actions for Government

  • Establish mandatory reporting on ethnicity pay using the same quartiles as the gender pay gap for large companies with more than 250 employees. The average hourly earnings of employees from ethnic minorities should be compared to those of white employees in a single pay gap figure.

  • As part of ethnicity pay reporting, mandate that organisations create a narrative and action plan based on government guidance. Subsequent reports should include updates on the action plan's implementation in order to promote real change in the hiring, supervision, training, and advancement of workers of all ethnicities.

  • Identify a timeframe for reviewing the effects of ethnicity pay reporting, and ask employers if it would be appropriate to provide more specific information based on standardised categories of ethnicity.

  • Encourage and support improved human resource management. According to CIPD research, poor people management practises exist across all racial and ethnic groups.

  • Develop guidance for employer action. There is a clear need for practical guidance and case study examples to kick-start and maintain the actions called for in the McGregor-Smith Review, as well as developing better quality workforce data.

Recommendations for employers

  • Develop the business case for increasing diversity and inclusion by creating a workforce that is more representative of the organization's clientele and the larger society in order to attract a wider, more diverse talent pool, boost innovation, and improve customer service.

  • Using HR data, determine the extent of ethnic diversity, and then use this benchmark to investigate any structural and cultural impediments that are preserving workplace disparities.

  • Review hiring procedures to get rid of prejudice and discrimination. This may include the methods and locations used by employers to hire new employees, the inclusiveness of the images and language used in recruitment materials, the techniques used during line manager interviews, and the methods used by recruiters working on behalf of employers.

  • Reexamine hiring procedures to preserve diversity. Address obstacles to career advancement and "cliff edges" where employees leave. Additionally, take into account intersectionalities, such as the combined impact of race and gender, and look at development from various perspectives.

  • Build an inclusive culture. Explore whether policies and practices are underpinned by principles that actively celebrate and encourage difference. Identify whether there are mechanisms in place to enable employees to voice issues about inequality and need for change. Take steps to understand how inclusive the workplace currently is, and what could be done to improve inclusivity.