As the UK gradually recovers from the impact of the coronavirus pandemic, firms need to make inclusion part of their future strategy, experts say.
Firms that provide targeted support for ethnic minority groups earn on average 58 per cent more revenue than businesses that do not, a study has found.
A report by Henley Business School, which analysed the earnings of 100 firms in the FTSE 350, found businesses that reported they had targeted racial equity measures in place earned an average of £5.6bn in revenue, compared to just £3.6bn for the firms that did not.
Similarly, the market capitalisation for companies with targeted measures was on average £4.3bn higher than companies that did not.
Only 35% Leaders Acknowledged Racial Discrimination
However, the report, which also polled 505 business leaders, found that just 35 per cent acknowledged racial discrimination was likely to affect them.
White business leaders were also far less likely to have reported seeing discrimination in their organisations when compared to business leaders with ethnic minority backgrounds (30 per cent and 47 per cent respectively).
Dr Naeema Pasha, director of equity, diversity and inclusion at Henley and the report’s lead researcher, said that, as firms looked to rebuild after the impact of coronavirus, it was more important than ever that issues of inclusion and diversity were prioritized by senior leadership teams and embedded in company culture.
She said there was a clear link between staff satisfaction and engagement and creativity, which can all lead to better value.
“When we look at the future of work with the impact of Covid, the impact of Brexit in the UK and the impact of AI and automation, a part of our strategy must be to have a strong EDI strategy because we need good talent. And we need talent from a broad range of areas for us to succeed effectively,” said Pasha.
“Rather than ‘let us do diversity and inclusion and stick it in HR’, it’s really about thinking: what do we need to do in terms of people to be a progressive organisation and reach success? What skills do we need? And how do we move forward?”
Employers Still Have Issues
However, the report found that many employers still had serious issues with racial inequality in the workplace.
The research, which polled more than 1,000 UK workers with different backgrounds, found nearly a fifth of black employees (19 per cent); nearly one in 10 Asian employees (9 per cent); and 8 per cent of mixed ethnic minorities said they had experienced discrimination at work.
The most common form of discrimination was work allocation – for example, being overlooked for projects or promotions – cited by more than two in five (41 per cent) respondents. This was followed by verbal abuse (33 per cent) and the unfair application of workplace rules or policies (29 per cent).
Pasha said visibility for ethnic minorities was key to ensuring minority groups were included in career pathways and talent pipelines and cautioned that the move many employers were making to hybrid working could exacerbate the issue.
“A lot of the discussions around [hybrid working] at the moment are about visibility, connection with our teams and our colleagues,” she said. Inclusion and diversity “is part of that same discussion. So, creating a good place where we all kind of feel a sense of belonging is going to enable us to do one place.”