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New research explores racial equity in UK businesses

Placeholder Equity Effect

The aim of the research was to understand the reasons racial inequity still exists in the workplace, and what the barriers and challenges are to overcoming it.

It revealed that businesses which actively confront inequity and racism with practical measures, can expect to see an improvement in their employees’ job satisfaction, loyalty, creativity and, ultimately, value, recording an average revenue 58% higher across three years than those which did not.

Racial equity means all employees are valued and treated fairly (even if this means being treated differently) irrespective of their race and culture, under the belief that strength comes through diversity. This includes the elimination of policies, practices, attitudes and cultural messages that foster racial discrimination and providing additional support and services to balance out inequities.

The research included a survey of over 500 business leaders and 1,000 employees, asking questions about their experiences of race and racism in their workplaces and the measures their companies have in place.

It found that factors such as perceived cultural differences (cited by 56% of employees and 52% of business leaders) and a lack of diversity in leadership (33% of employees) are driving racial inequity and systemic racism within UK businesses.

As many as 22% of employees say they have personally experienced or seen discrimination of some sort in their workplace, with many citing race as the primary pretext (55%).

The research showed there are still fundamental issues to address in eliminating racism in the workplace and Black employees remain the worst off. They are more than twice as likely to experience racial discrimination compared to Asians and mixed ethnic minorities (19% v 9% and 8%).

When it comes to recognising the racial inequity, White business leaders are significantly less likely to have seen discrimination in their organisation in comparison to those from an ethnic minority background (30% v 47%).

The research was led by Dr Naeema Pasha, Director of Equity, Diversity and Inclusion at Henley Business School. She said:

“Racial equity and business success should not be separate conversations. It is critical to any organisation wanting to achieve its aims and ambitions in this challenging world of work. Of course, we all want to say that racism has no place in business, education or society. But the experience of the pandemic and social movements like Black Lives Matter have shown us that we need to shift our organisational, cultural thinking to ensure we work on racial equity – not just because it is a good thing or seen as worthy, but because it is valuable and essential to organisational success.”

In addition to the surveys, 22 business leaders and employees from a broad range of industries were interviewed to discuss their experiences in further depth. Further research was conducted to gather specific business performance and diversity data points from companies listed on the FTSE 350.

Henley academics from a range of research specialisms including HR, leadership, ethics, and organisational behaviour, have analysed the findings and shared their thoughts throughout the report.

Published 7 June 2021
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