Race in the Workplace: The McGregor-Smith Review

Baroness McGregor-Smith Excerpts

Monday 24th April 2017 Lords Chamber

Asked by

[Baroness McGregor-Smith]

What action they are taking in response to the recommendations made in the report Race in the Workplace: The McGregor-Smith Review, published in February.

[Baroness McGregor-Smith (Con)]

My Lords, I am delighted today that we have time for this debate. Britain has been an extraordinary place to live and grow up in since I arrived aged two as part of a Muslim Asian family, but that is not to say that I did not face my fair share of challenges to achieve what I have in business because of the colour of my skin and my gender. Sadly, I am still considered the exception to the rule, rather than the norm. I find it appalling that, even today, some of these prejudices still exist, holding people from BME backgrounds back from reaching their full potential in the workplace, as my review clearly shows.

While there is a clear moral case for greater diversity, it is also vital for the continuing strength of the UK economy to have the best available talent in the workplace, whatever their background might be. My review puts forward that economic case for change. The boost to the UK economy is £24 billion a year if workers from BME backgrounds participate and progress at the same rate as their white counterparts.

The review finds that workers from a BME background are still being held back by the colour of their skin and are more likely to end up in lower-paid and lower-skilled jobs than white workers. One in eight of the working population today are from a BME background, yet only 10% of the workforce is BME, they hold only 6% of management positions, and rarely can they be seen at the top of any public or private organisation. Not only is this wholly unacceptable, but the public and the private sector are definitely shooting themselves in the foot by failing to help people from BME backgrounds to progress.

The review clearly demonstrates there is a huge economic benefit to both employers and the whole economy for BME workers to reach their full potential. Many employers are doing their best to harness BME talent, and I applaud those who take it so seriously, but many others are not, because they do not know what to do. That is why I have published a list of 26 recommendations, urging larger employers to lead the way in tackling barriers to BME progression.

First, I call on companies with more than 50 employees to publish breakdowns of their workforces by race and pay band, to draw up aspirational diversity targets and to appoint a board-level member to be held accountable for delivering on these. When I wrote to the FTSE 100 asking for race and pay band information, only 74 responded and only half of those had any meaningful data. That is, in itself, a real issue: if everyone does not publish data, the Government should legislate to ensure that they do. We should not hold out a lot of hope for this happening voluntarily. Companies have many priorities in these somewhat difficult times, and we will not get meaningful change unless this is done by all organisations whose employee numbers exceed 50. I urge that we legislate in this area very quickly.

Secondly, I want all organisations to use their purchasing power to ensure that they use suppliers that take this seriously. The public sector has huge spending power and this can be used far more effectively. We do not need another review to do this; we just need to change how organisations pre-qualify for work with the public sector. When taxpayers’ money is used, it should be done in a way that benefits all citizens in the UK. As the Government decide how best to disentangle themselves from a myriad of European rules on procurement, they must develop simpler processes that drive positive change in this area.

Thirdly, I want senior executives to take accountability for all of this and be the key sponsors for improving diversity in their organisations.

Fourthly, all employers must raise awareness of diversity issues by ensuring unconscious bias training is undertaken by their employees. They also need to have inclusive networks and provide mentoring and sponsorship.

Fifthly, all recruitment practices need to be examined. Non-diverse shortlists need to be rejected; diversity needs to be introduced to interview panels. How many BME individuals do we see on interview panels today? Work experience and internships need to be offered to everyone, not just the chosen few.

I also discussed a number of other key recommendations, including developing a simple guide on how to discuss race in the workplace—it is still so difficult for many of us to discuss it and I do not even feel comfortable talking about it today—and an annual list of the best 100 BME employers to celebrate success and promote best practice in the business community.

The Government, who asked me to carry out this review, are clearly taking this issue seriously, and I am encouraged that Margot James has created a new Business Diversity and Inclusion Group to bring together business leaders and organisations to co-ordinate action to tackle exclusion in the workplace. Many businesses also take this seriously and I was impressed by many of the case studies and examples of best practice that I saw.

I would now like everyone to adopt and embrace the recommendations and get on with implementing them. I am not keen for any more reports to be written: we just need to get on and change the outcomes for so many people who have great talent. They deserve to be not ignored in the workplace but supported. Let us help them achieve their aspirations and provide a significant boost to the UK economy.