An independent report for the government, led by Baroness Ruby McGregor-Smith, has argued a target based framework for erasing racial inequality in the workplace could save the economy upwards of £24bn a year.
However, in this blog WBS academics Dulini Fernando and Shainaz Firfiray argue companies need to look beyond simple quotas and box ticking.
Will quotas on diversity help BMEs?
The career trajectories of people with minority ethnic backgrounds vary significantly from those of white counterparts with similar profiles.
This is often attributed to minority groups’ lack of control over critical organisational resources, negative stereotypes about their competence or performance and lower access to professional support networks.
Reporting race-related pay data might help identify existing discrimination against ethnic minorities, recognise barriers that prevent the ascension of these groups, and prompt debates around supporting them.
Such a move may gradually help in overcoming the structural impediments faced by these groups in reaching top-management positions.
Broadening the composition of corporate boards can serve business interests as it helps in expanding perspectives at the top and recognising the needs of diverse stakeholders.
The report suggests the UK is missing out on 1.3 per cent annual growth with those from black and minority-ethnic backgrounds (BMEs) facing fewer opportunities for career and pay progression than their white colleagues.
What negative effects will quotas on diversity have for BMEs?
However, the idea that diversity must reflect in companies pay and employment statistics has the word quota written all over it. When quotas are imposed, you always get a backlash and face unintended consequences.
The idea that minorities are entitled to special privileges due to their minority status is very dangerous. It has significant potential to increase prejudice towards minority groups at the workplace.
While the report suggests only six per cent of people from BME backgrounds have reached top level management positions, it also points out their employment rates were 12 per cent lower. Is the right approach to this to set targets to ensure diversity is achieved, however? I don't think it is.
Diversity at the top should focus not on meeting the numbers, by making the numbers count – corporations need to create the right environment to really reap the benefits of a diverse board.
Do BMEs want to be classified in terms of their cultural background?
I interviewed several ethnic minority professionals of South Asian origin in the finance and IT industry two years ago. The individuals I interviewed were firmly against being classified in terms of their cultural backgrounds.
Instead, they sought assimilation, highlighting their British identity. My research on professional women in male-dominated occupations, similarly indicated that women are completely against any form of gender-based targets.
They believed that such measures would worsen their career prospects, positioning them as individuals who require special privileges and inviting resentment from the majority group. In my view, if the government intends to promote ethnic diversity within companies, this should happen at the grass root level.
How should organisations help encourage diversity?
Organisations should take a bottom-up approach to raise awareness of explicit and implicit ethnicity based prejudices and barriers. They should encourage individuals, team members and line managers to be open and reflexive about these.
I've found that a great majority of people are in denial about gender and ethnicity based disadvantage in the workplace. In particular, organisations which have sophisticated HR functions, a number of people believe that the disadvantages encountered by minorities are a thing of the past.
In my view, line managers and colleagues acknowledging the distinct challenges encountered by minority groups and responding to them at an individual/group level is a first step towards building a more equitable workplace.
Blog by Dulini Fernando and Shainaz Firfiray.
Dulini Fernando is an Associate Professor and teaches Organisational Behaviour on the Distance learning MBA and Full-time MBA. She also teaches Research Methodology on the MSc Business suite of Postgraduate Programmes and Business Studies I, Equality and Diversity and Management, Organisation and Society on a number of Undergraduate Programmes.
Shainaz Firfiray is an Associate Professor and teaches Organisational Behvaiour on the Distance learning MBA and Human Resource Management on the Full-time MBA. She also teaches Managing Human Resources on the MSc Human Resource Management & Employment Relations.