By Ben Willmott, Head of Public Policy at the CIPD and Abdul Wahab, Inclusion and Diversity Adviser at the CIPD. 

The Commission's conclusions fail to reflect the evidence and undermine efforts to tackle racism and discrimination in the UK.

• Examination of data in the report shows institutional racism remains a significant problem when it comes to employment and progression at work
• CIPD calls for UK Government to push ahead with introduction of mandatory ethnicity pay reporting
• An in-depth examination of the recent report by the Commission on Race and Ethnic Disparities shows flaws in its conclusions and makes clear that its recommendations fall short of what is required to tackle racial inequality at work.

 Outright and persistent racism

The Commission’s 257-page report has provoked much debate, including over its questioning of whether institutional racism exists in the UK. However, an evaluation of the report shows that ingrained disadvantage continues to exist for many ethnic minority groups in terms of employment outcomes and progression at work. What is also very clear is that much more action needs to be taken to address discrimination and tackle the outright and persistent racism that the report acknowledges continues to exist in the UK today.

The Commission’s own accepted, broad definition of institutional racism, first used by Sir William MacPherson, cited in the report, is:

“The collective failure of an organisation to provide an appropriate and professional service to people because of their colour, culture, or ethnic origin. It can be seen or detected in processes, attitudes and behaviour which amount to discrimination through unwitting prejudice, ignorance, thoughtlessness and racist stereotyping which disadvantage minority ethnic people.”

And, according to the findings set out in the report, this definition encompasses the experience of many people from ethnic minority backgrounds in relation to employment outcomes or progression at work.

Employment outcomes

It is true that employment outcomes for most ethnic minority groups have improved since 2013 as the labour market expanded and overall employment rates reached record levels before the pandemic. However, they continue to lag behind those of White British people. While the pre-pandemic employment rate of 76% for the Indian ethnic group was only just below the White British average of 77%, employment rates for most other minority groups were significantly lower: 69% for Black people, 65% for the Asian ethnic minority group and 56% for people in the combined Pakistani/Bangladeshi ethnic group.

There is also no guarantee of a continued positive trajectory in terms of closing the ethnic minority employment gap. As the report acknowledges: ‘historically, employment rates of ethnic minority groups have gone down more than overall employment rates during economic downturns in the UK’.

There are also different outcomes in terms of unemployment rates between White British people and most ethnic minority groups. For example, in 2019 just 4% of economically active White British people were unemployed compared to 6% for Mixed ethnic minority people, 8% for Black people and 8% for Pakistani/Bangladeshi people.

The report acknowledges that discrimination is likely to be a part of the reason behind the negative employment outcomes experienced by many people from ethnic minority groups and highlights research which shows people with minority sounding names are disadvantaged in the recruitment process

Pay disparities and progression

The data on pay disparities and progression is, if anything, more negative than that on employment and unemployment, despite the reduction in the overall ethnicity pay gap to 2.3%.

The report makes clear that this headline figure glosses over very significant differences in outcomes for different groups. For example, on average the pay gap for Pakistani people averages 15.5% lower compared with White British people, while for Bangladeshi people it is 15.3% and for Black Africans, 7.9%. The report also observes that the pay gap varies when adjusted for factors like age, qualifications and region. At the same time, the overall adjusted pay gap figures for UK and non-UK born ethnic minorities is not published.

When considering the issue of bias in detail, the report suggests that ‘bias and discrimination at work’ are hard to ‘pin down’. But it does then accept that the field experiments with imaginary CVs ‘provide conclusive evidence that bias at least in hiring, does exist’. The report then goes on to caveat this conclusion by stating that although ‘we know discrimination occurs’ the experiments ‘cannot be relied upon to provide clarity on the extent to which it happens in everyday life’. This is true yet, combined with the other data in the report, the overall evidence suggests discrimination continues to prevent people from many ethnic minority groups from accessing and progressing at work.

Now, let us go back to the question of institutional racism. Organisational systems, processes, structures, rules, customs and practices are influenced and determined by an organisation’s leadership, who in most organisations are from the dominant social identity group. The report cites Green Park’s Colour of Power project which found that only 52 of 1099 ‘most powerful jobs’ were held by ethnic minorities, with 2021 data revealing that there are now no black leaders at the head of FTSE 100 companies.

The CIPD’s submission to the Commission found that ‘routes to securing employment in professional and managerial roles often disadvantage ethnic minorities’. Ethnic minorities are often unable to take up summer placements and unpaid internships, traditional routes into many legal, professional, and financial services roles. The CIPD’s recent Race Inclusion Reports , which we referenced in our submission, found that less than half of ethnic minority respondents felt there was equal access to development and career progression opportunities for everybody.

Taken together, the evidence shows that institutional racism is still very much in play in the UK when it comes to employment outcomes and workplace progression. As the saying goes if it looks like a duck, swims like a duck and quacks like a duck it probably is a duck.

Consequently, the CIPD’s view is that much stronger action is needed to catalyse change and build on progress where it has occurred than the measures suggested by the Commission.

Mandatory ethnicity pay reporting

In particular, there is a need for the UK Government to make ethnicity pay reporting mandatory rather than rely on the voluntary approach recommended by the Commission, as evidence from previous initiatives suggest far too few companies will initiate this unless they are compelled to. For example, before mandatory gender pay gap reporting was introduced in April 2017, there was a Government-supported campaign called Think, Act, Report designed to encourage firms to voluntarily report on their gender pay gap. However, by the third year only about 260 firms were reporting, which suggests that a voluntary approach to ethnicity pay reporting is also highly unlikely to bring about the widescale changes to employer practice that are needed.

The challenges of ethnicity pay reporting are well documented and are cited as reasons why the Commission has opted against making ethnicity pay reporting mandatory. However, in its submission to the consultation run by the Department for Business, Energy & Industrial Strategy in January 2019 – which we still await a response to – the CIPD laid out a clear methodology on which to base ethnicity pay reporting.

The Commission’s report also raises the issues of demographic differences between different regions, with some having a much smaller ethnic minority talent pool. However, a narrative report can provide an explanation of the geographic context. Despite the obstacles this can pose, some businesses have aggregated data where sample sizes are too small for the purpose of reporting. It is more complex than perhaps, Gender Pay Gap reporting, but this can provide useful data in identifying disparities in the employment and progression opportunities of ethnic minorities and highlight where action needs to be taken. The publication of a clear action plan should also be a compulsory requirement of mandatory ethnicity pay reporting, setting out the changes that employers plan to make in terms of recruitment, people management and development practices in response to their data.

Guidance/Skills development

We support the Commission’s recommendation for the development of more resources and evidence-based approaches to promoting fairness in the workplace. We note the report’s conclusion about unconscious bias training (UBT) and agree that UBT alone, without other complementary interventions to improve racial equality, is likely to be ineffective. CIPD is committed to championing evidence-based HR and we will continue to use this basis to develop understanding of the practices that meaningfully improve inclusion and diversity in the workplace, and will seek to work with the Government to promote their wider dissemination and adoption.

However, it must be recognised that guidance on best practice is more likely to be used by progressive organisations already taking action to try and improve racial equality than those employers in most need of making changes to practices.

We welcome the Commission’s call for more training and skills support for employees on the development of core ‘soft’ employability skills, which is an issue CIPD has been championing through the work of the Essential Skills Taskforce.

Much more ambition and investment is needed from the Government in adult skills and lifelong learning, though, to ensure that ethnic minorities and other disadvantaged groups can access the training and support they need to develop both the technical and soft skills they need to reach their potential.

Finally, we agree with the Commission’s conclusion that the issue of racial equality and discrimination is complex and that factors such as geography, family influence, socio-economic background, culture and religion also affect people’s life chances in different ways.

There should be a concerted effort to address regional inequality and to improve social mobility, and CIPD is committed to supporting and where necessary challenging government in addressing these issues. For example, we are working with the Social Mobility Commission to help develop guidance and tools on supporting social mobility in the workplace.

However, there must also be parallel commitments and action to tackle institutional racism wherever it exists. The conviction this week of a former police officer for the murder of George Floyd, which sparked the widespread Black Lives Matter protests nearly a year ago, is a reminder of the need to recognise the inequalities and racial discrimination faced by many people in our societies and businesses.

We must keep this conversation going, but more importantly, we must see action

This must come from government, from businesses, from communities and from each of us recognising the barriers to change and doing our part in breaking them down. The CIPD is committed to being part of this change and supporting the HR profession to create better, more inclusive workplaces.