If British companies recruited people from black and minority ethnic (BME) communities evenly across all sections of their business, the economy would receive a £24bn boost, says a report published by the Department for Business, Energy and Industrial Strategy.
Written by Baroness McGregor-Smith, until recently the chief executive of outsourcing giant Mitie, where she was the only Asian-origin head of a FTSE 250 company, the report highlights how the employment rate for BMEs stands at just under 63%, whilst for white workers the figure is just short of 76%.
Racial bias is something we associate with skinhead thugs, not something endemic in our boardrooms which allows the culture of ignoring our lack of diversity to permeate throughout our organisations.
The McGregor-Smith Review brings back painful memories of the eight years I served as the chair of the Department for Work and Pensions Ethnic Minority Advisory Group (Emag). We were charged with making policy recommendations to ministers to reduce the employment rate gap, one that a liberal democracy like ours should find unacceptable.
The problem is huge. BMEs currently constitute a rising part of the British working population. One in eight of the working age population (aged 15-64) are from a BME background, yet only one in ten are in the workplace and only one in 16 top management positions are held by an ethnic minority person.
BME communities, of course, tend to live in our most deprived areas and are therefore much less likely to have access to decent education to compete for jobs. Schools and universities, as well as their governing bodies, have been active in levelling out the playing field.
The talk of fairness and the moral case for diversity is well entrenched in much of the public sector. The arguments and principles are often not contested – it's just that government, not just this one but governments historically, have done next to nothing about it. The problem of racial inequality has got no better since groups like Emag came about.
One of the major problems we encountered with the three governments I served under (Labour, coalition and Conservative) was that, in my tenure, there were over a dozen different ministers in the DWP who inherited this brief as part of their portfolio. Race always got shuffled to the bottom of the pile.
That it is written by someone who has led a major plc brings extra clout to McGregor-Smith's report because businesses cannot retaliate by saying her proposals are impractical to execute, such as one that calls for companies with more than 50 employees to be required to state the ethnic representation at all tiers, as well state clearly how those figures will be improved upon, and then report back on their success or otherwise.
Many enlightened large companies already do this, if for no other reason than that the business case for diversity is clear. Accounting giant EY, for example, has an Inclusive Leadership Programme tasked with seeing 10% BME representation at partner level. When the project was started in 2012, the figure stood at 3%. It is now 8%.
Indeed, there is a business case for making the business case – EY invested heavily in a programme called the National Equality Standard offering clients a diagnostic toolkit to ensure they have a properly diverse workforce, and has companies queuing up to use it.
But when it comes to looking at the ethnic composition of their workforces, enlightened companies are still too few in number. Tackling gender diversity has had greater buy-in.
And we shouldn't just be looking at the private sector. Most government departments not only have 'bottom heavy' BME worker representation, but they also have a crucial tool at their disposal that historically they have been too scared to use.
Civil servants spend billions with the private sector every year – buying everything from paper clips to tanks. What do we know about the ethnic diversity of the businesses the public purse engages with? Nothing is the pathetic answer. If private sector suppliers to the state were to have to compete on quality, equality and price, and not just the first and last, rapid changes would ensue. Those who currently fall short would be given the tools to fix that to become eligible for future trade.
Politicians are so removed from the world of commerce. When I first proposed this, we were told they didn't want to be seen as anti-business. What ministers failed to comprehend, invariably because they got reshuffled before I had enough time to engage them, was that if you say to a business that they need to tweak their practices, they won't moan about more paperwork, they will go out and fix what needs to be done to earn further.
I hope Ruby McGregor-Smith's calls for action get taken up. One promising thing in her favour is that Theresa May is a passionate believer in racial equality and has been for many years. If the prime minister backs the calls in the report, we might finally be part of a fairer – and better performing – economy.
Restaurateur Iqbal Wahhab OBE is the chair of Bounce Back and mentors ex-offenders wishing to start up their own businesses.