Black and Minority Ethnic People: Workplace Issues

Baroness McGregor-Smith Excerpts

Tuesday 3rd May 2016 Lords Chamber

[Baroness McGregor-Smith (Con)]

My Lords, I thank my noble friend Lady Neville-Rolfe for introducing this important debate and for providing me with the opportunity to speak today.

When I was appointed chief executive of Mitie nine years ago, and thus became the first Asian FTSE chief executive, I did not really want to talk about gender or race. I had not even realised that there was anything special about my position. I had not realised that there was anything special about being female, being Asian, being from a Muslim family and looking quite different. More than anything, I just wanted to fit in and to be recognised for my talents. Having started with those intentions, I then began to think about how much these issues really mattered.

Since then, I have chaired the Women’s Business Council and am now hugely honoured to lead an independent review of the obstacles faced by BME individuals in progressing through the labour market. That is quite a departure from how I felt a few years ago, and the reason is that I was mistaken. I imagined a world where it was not news that I was Asian and leading a FTSE 350 company, but, sadly and unfortunately, it is. I imagined a world where only skills and experience were discussed, not ethnicity, gender or any challenges regarding diversity. I guess that I imagined a world that is still a long way off. But at least I think that we now know what success can really look like. I am thinking of a world that moves far beyond identities, with no more talk about quotas and targets, to a position where we start to talk about what people do with their talents. I hope that everyone—male or female, black or white—will one day have access to some of the same schools, the same professions and, more importantly, the same opportunities as everybody else. We are not anywhere near that place yet, but I am honoured to chair this review and to draw on my own experience to help bring about the changes that we need. The challenges that we face are significant.

The latest ONS statistics show that, at 62.7%, the BME employment rate is 13 points below the white employment rate. It is lower still when you look specifically at the Pakistani or Bangladeshi populations. Worse still, the biggest discrepancies exist in youth unemployment. White unemployment among 16 to 24 years-olds is 13%. Asian youth unemployment is 24% and black youth unemployment is higher still, at 27.5%.

As my experience has taught me, getting people into the workplace is not enough. We have to make sure that anyone of any background with the right skills can get into top management positions in business in the public sector. Currently, one in 10 employed people comes from a BME background but only one in 16 fills a top management position. We need to find out why these numbers do not match. We need to find out what the barriers are and break them down. There is very little BME representation at a senior level in business or in any public sector organisation today, and I do not think that that is acceptable.

For me, this is not just about opportunity for individuals; it is about a productivity dividend that will pay out for the whole UK economy. Ethnically diverse companies are higher performing. A 2015 McKinsey study found that firms in the top quartile for diversity were 35% more likely to outperform those in the bottom quartile. More diverse companies are able to win top talent, improve understanding of customers and increase employee satisfaction, all of which lead to increased returns. So whether any of us are interested in social justice and equality of opportunity, economic growth in the UK or just plain old profitability, this debate is seminal. The review that I am leading will look specifically at what employers can do to help and what issues they currently face in developing BME talent.

First, we need to build further the business case for change, asking what benefits the public and private sectors get from accessing the widest pool of talent available. Secondly, we need to be really clear about the obstacles that BME groups can face as they progress through the labour market. Thirdly, we need to ask what impact these obstacles have—why educational attainment does not always match up to executive positions. Fourthly, we need to bring together existing data to illustrate the scale of the issue, and to look at them in more depth. Are things different for different ethnicities, and how much is about economic circumstance as well as where you are from?

Fifthly, we need to look at best practice. Certainly I plan to draw on some of my own experience and that of others to highlight what works—there are some great examples of what can work—and encourage others to do the same. Here, we also need to consider how to replicate the success that many large, well-resourced companies have had in this area and spread this success to our SMEs. At Mitie, for example, we are starting to introduce aspirational, five-year diversity targets for all our businesses across the group. Personally I have been a fan of aspirational targets, as I think that they help to drive change. I am not a fan of quotas. I think that resorting to quotas says that we have failed. Instead, we have to take the actions that we need to take before getting to the challenge of quotas. Lastly, and most importantly, we need to make cost-effective recommendations to advance BME progression in the labour market.

I reassure noble Lords that the talent is out there—this is not just affirmative action—but we just need to go out and meet that talent in the middle. We need careers advisers to open doors to all the professions, and we need mentors to show BME employees that they can climb as high as they want. We need role models who look and feel like BME individuals to help inspire our young people, and we need to deal with the challenges of unconscious bias, which is a huge issue for all organisations.

The individuals whom I have worked for in organisations have always supported and mentored me. They believed in me and encouraged me to get to the top, telling me that I could do so. More and more, people at the top of their organisations need to do the same and understand that that is their role. They have to find the next generation of leaders and take this on as a real personal responsibility. I think that we are moving in the right direction. BME employment is the highest since records began 15 years ago, and we can narrow and close the gap on the challenges that we have. We can reach a world where we talk about our leaders not as black or white but with regard to what they are actually qualified in.

I will finish by referencing what Idris Elba said when he came recently to Parliament. He talked about diversity, specifically diversity of thought, and a casting director called Nina Gold who discovered John Boyega, a British African from Peckham. He said:

“Since when did the lead character in Star Wars come from Peckham? Since a woman with imagination became the casting director”.

I hope that in this place, in this debate, and indeed through my recommendations which will be published later this year, we can inspire everyone to show similar imagination and help Britain reap the benefits of all of its people.