Over the last few years, a spotlight has been shone over many organisations for their lack of racial diversity, particularly at senior level. This spotlight has only intensified following a wave of protests this year that have forced businesses worldwide to take a long, hard look at themselves and simply do better when it comes to ethnic minority representation.
According to the Office for National Statistics, Black people across the UK have the lowest percentage of workers in ‘manager, director or senior official’ roles, at just 5%. It is becoming increasingly clear that not enough work is being done to break the ethnic glass ceiling.
Actively improving ethnic representation in business, paired with creating a safe working environment for such individuals, is the way forward if you are genuinely committed to racial diversity. One cannot work without the other.
We spoke to Justin Carty, Senior Director, CBRE UK Capital Advisors, about addressing racial inequality in business and as a senior Black leader in his firm, he’s keen to facilitate change.
Why is diversity essential in business?
On an ethical level, the case for racial diversity is evident, why wouldn’t you want it? However, in business terms, there is a clear correlation between diversity and financial performance.
In McKinsey’s 2015 ‘Diversity Matters’ report, the global firm found that companies in the top quartile for racial diversity are 35% more likely to have financial returns above their respective national industry medians.
McKinsey states: “While correlation does not equal causation, the correlation does indicate that when companies commit themselves to diverse leadership, they are more successful.
“More diverse companies, we believe, are better able to win top talent and improve their customer orientation, employee satisfaction, and decision making, and all that leads to a virtuous cycle of increasing returns.”
Chika Aghadiuno, Group Enterprise & Operational Risk Director and Executive co-sponsor for the BAME network at Aviva, says one of the most significant risks associated with your employees is not having the right people for the role.
“By the ‘right’ people, that does not necessarily mean you’ve the ‘wrong’ people,” Aghadiuno says.
“But you’re not tapping into the full spectrum of talent that you could be in order to maximise your business or avoid tripping over in a more significant way and we've seen lots of examples in the headlines where that can happen.
“Often you can point to the fact that [you’re] not understanding your customer because you're not reflective of your customers. This is as much about missed opportunities as well as the inherent risks.”
Set your targets and act
Acknowledging the advantages of a diverse workforce is one thing, but McKinsey has also taken the necessary steps to actively pursue racial justice, including its commitment to doubling its Black leadership and recruitment of Black colleagues in its firm over the next four years and contributing $2m (£1.5m) to a global youth employment programme to train and place Black learners in SME Black-owned businesses.
While not every business will have the capacity to implement such initiatives, Justin Carty has some ideas.
Carty leads real estate advisory firm, CBRE UK’s Race Taskforce, which has been set-up to devise a strategy for ethnic inclusion.
He suggests that companies should start with their data.
“Understand where your company is now and where you want to get to,” Carty says.
“Make sure you understand the fabric of your organisation and what you’re working with, I would do an equal pay audit. [Then], have targets, and be ambitious and bold when trying to achieve them.”
As a result, CBRE UK voluntarily published their ethnicity pay gap this year and are also implementing an equal pay audit to discover whether there are discrepancies at each level that they need to address.
By 2025, CBRE UK want to have 25% of their staff at Associate Director (AD) and below from BAME backgrounds and 10% in roles above AD. Additionally, whenever there’s a promotion happening in the business, they’re aiming for at least 15% of the people being considered for promotion, for roles of director or above, to be from BAME backgrounds.
Follow existing methods
For businesses that are seeking detailed guidance on improving ethnic representation, Carty encourages following the 'Investing in Ethnicity: Maturity Matrix', a guide created by D&I company, SPM Group to “equip and encourage businesses to make more progress” with race – divided into board and allies, policy and data, employee lifecycle and culture and inclusion.
Alternatively, the Race in Work charter, launched by the UK government in partnership with Business in the Community two years ago, contains measures to help tackle ethnic disparities within the workplace, including appointing an executive sponsor for race.
“We’re not all working to a uniform framework and that means things could be lost from one organisation to another, so if there's a standardised approach to how we go about doing this, then I think life would become a lot easier,” Carty says.
Take your time to make a difference
Authentic change that sees an increase in ethnic minorities in senior positions will require time, dedication, and resources, therefore set realistic targets.
Additionally, don’t be too hard on yourself if the penny has only recently dropped and you’ve suddenly realised just how much change is required internally to improve representation in your business.
CBRE UK set up its ethnicity network (now called the REACH network) in 2015 before signing the Race in Work charter and setting their targets at the end of 2019. It is never too late to commit to and implement change across an organisation.