Green Park’s executive briefing: The Mcgregor-Smith review

SUMMARY

In February 2016, the then Business Secretary asked Baroness McGregor-Smith, former CEO of Mitie plc, to undertake a review of the issues faced by businesses in developing black and minority ethnic (BME) talent from recruitment through to executive level. For the first time, the review won’t just be about board diversity or board pipelining, the McGregor-Smith review is a holistic review of the U.K. workforce’s opportunities for BMEs and the break points at which bias or prejudice can be free to reign.

The government invited Baroness McGregor-Smith to investigate this critical issue as for years, consecutive governments and employers had stated their commitment to combating racial equality and improving social mobility across the UK, yet vast inequality continues to exist. With 14% of the working age population coming from a BME background and the clear dividends diversity pays out to business, the report suggests that it’s time for employers to start making the most of the great talent that’s out there, whatever their background.

The report exposes that much of the bias is structural and a result of a system that benefits a certain group of people and discriminates against almost all others. It suggests that amending this breakdown will involve a critical examination of every stage of the process from how individuals are recruited, to how BMEs are supported to progress and fulfil their potential and what data is captured at each of these critical stages for BME equality at work.

WHAT DO THE FINDINGS SAY?

• BME people are faced with a distinct lack of representation across business
• BME people are more likely to perceive the workplace as hostile
• BME people are less likely to apply for and be given promotions and they are more likely to be disciplined or judged harshly
• BME individuals in the UK are both less likely to participate in and then less likely to progress through the workplace, when compared with White individuals
• All BME groups are more likely to be overqualified than White ethnic groups but White employees are more likely to be promoted than all other groups.
• We must open the dialogue about race and ethnicity in the workplace
• We must focus on collecting data and eradicating breakpoints with the findings in order to create truly inclusive environment where everybody can bring their whole self to work
• Employers must publish their aspirational targets, be transparent about their progress and be accountable for delivering them
• The Government must legislate to make larger businesses publish their ethnicity data by salary band to show progress
• Any organisation that is publicly funded must set and publish targets to ensure they are representative of the taxpayers they deliver for
• Companies should look at the make-up of the area in which they are recruiting to establish the right target

THE NUMBERS

• 1 in 8 of the working population come from a BME background
• There are now more Indians in Britain’s Top 10% of earners than Whites.
• The employment rate for collective ethnic minorities is only 62.8% in comparison to White workers who have an employment rate of 75.6%
• Employment rates are even worse for Pakistani and Bangladeshi communities, who are at only 54.9%
• The underemployment rate of people from a BME background is 15.3% compared to 11.5% for White workers
• If BME talent is fully utilised, the economy could receive a £24 billion per annum, which equates to 1.3% of GDP

WHY IS THIS REVIEW IMPORTANT FOR YOU?

We are facing more and more pressure to ensure our business are not just inclusive but have auditable staff equality measures in place. This is not going to go away. The McGregor- Smith review paints a picture with 26 recommendations and lays out a practical implementation plan for businesses, large or small, to start the long journey on tackling racial prejudice in the workplace to reach its objective goal of 14% ethnic minority representation in business. We have summarised these pointers for you below;

• Gather data from the three pillars of employee engagement 

Setting targets only works if you have robust data to both establish the baseline and measure the impact of positive action. It is safe to say ‘Big Data’ is making its way into our HR systems but big data is not enough. Without a better and more sustainable approach to monitoring and measuring trust and purpose across your current employees, potential employees and exited employees, efforts will remain in vain.

• Analyse results and take responsibility for the outcomes 

Given the impact ethnic diversity can have on organisational success, it should be given the same prominence as other key performance indicators. To do this, organisations need to establish a baseline picture of where they stand today, set targets for what they expect their organisations to look like in five years’ time, and measure progress against those targets annually. What is more, they must be open with their staff about what they are trying to achieve and how they are performing.

• Raise Awareness 

Communication in your efforts is key and nothing builds trust like owning up to your mistakes and pledging to do better. All employers should consider taking positive action to improve reporting rates amongst their workforce by opening up communication channels and empowering stories of success and difference throughout the organisation. This should include clearly explaining how supplying data will assist the company in increasing diversity overall.

• Examine your recruitment and talent management processes, including your supply chain

From initial recruitment, to the support an individual gets and their progression opportunities, processes need to be transparent and fair. In many organisations, the well-established processes in place can act as a barrier to ethnic minorities and hinder their progress through an organisation. This includes rejecting non-diverse shortlists, challenging school and university bias, conducting language audits throughout your processes, ensuring panel interviews are diverse and that reward and recognition is transparent and fair.

• Optimise all breakpoints with your newly learned experience

It will require concerted and sustained effort from all of us but the solutions are already there, if we only choose to apply them. The report states that the business case is clear but providing equal opportunities to people of all backgrounds is also, quite simply, the right thing to do. By implementing these recommendations, we have a huge opportunity to both raise the aspirations and achievements of so many talented individuals, and to deliver a potentially enormous boost to the long-term economic position of the UK.

• Embrace trust and challenge your culture

Improving diversity across an organisation takes time. Aspirational targets provide an essential catalyst for change, but to achieve lasting results, the culture of an organisation has to change. Those from BME backgrounds need to have confidence and trust in the fact that they have access to the same opportunities, and feel able to speak up if they find themselves subject to direct or indirect discrimination or bias.

Most organisations haven’t yet worked out how to effectively and sustainably deliver the above recommendations in a cost-effective manner that embraces difference whilst also achieving meaningful goals. DRIVE, our not-for-profit was formed to help businesses do just this.

For more information on how to begin adapting your organisation based on the reviews recommendations, or to start optimising your findings to deliver better results, please get in touch.

Raj Tulsiani, CEO- Green Park: Raj.tulsiani@green-park.co.uk

Joseph Williams, Director- DRIVE: Joseph.Williams@drive.exchange