Business benefits of ethnic diversity

17 March 2023

Why Anti-Racist Employment Strategy is a good move

Harriet Gray is an Employment Associate and works in the People, Reward and Mobility team at Dentons UK and Middle East LLP, based in Scotland.

DESPITE an increase in awareness of the issues ethnic minority groups face generally, racial inequality in the workplace continues.

Research has found that people from ethnic minority groups are more likely to work in lower-paid or precarious jobs and are underrepresented in senior roles.

Aside from the unacceptable social and economic impact this has on the communities affected, Scotland’s economy also suffers as a result.

By excluding people from ethnic minority groups, employers are missing out on the benefits of cultural diversity, which has been shown to spark better innovation, collaboration and expand client and customer bases.

To tackle this issue, the Scottish Government has introduced a new Anti-Racist Employment Strategy aimed at closing the employment and pay gap for all ethnicities and eliminating racial inequality in the workplace.

Data shows that the employment rate for ethnic minorities aged 16 to 64 was 62.1% in 2021, compared to 73.9% for white workers, resulting in an employment rate gap of 11.7%.

The gap is also worse for certain racially minoritised groups including African, Gypsy/Traveller, Arab and Caribbean or Black ethnic groups.

The Government’s strategy will aim to address the issues and disadvantages experienced by ethnic minority workers in Scotland and will form part of the refreshed Fair Work Action Plan, which brings together the Scottish Government’s plans for Fair Work, Gender Pay Gap, and Disabled People’s Status. The ultimate goal is for Scotland to become a leading Fair Work Nation by 2025.

The strategy takes both an anti-racist and intersectional approach to addressing the systemic and structural issues that underpin racial inequality in the workplace. An anti-racist approach is one that challenges organisational structures, policies, practices and attitudes to proactively address racism in both people and organisations.

An intersectional approach is one that demonstrates that racism does not sit in isolation and that other inequalities can exist which make entering and progressing in the workplace more difficult.

The strategy outlines actions for the Scottish Government and explains how it will work with employers to increase diversity, fairness and inclusion in Scotland’s workplaces.

Namely, employers will be supported to collect workforce data and report on the pay gap, take an anti-racist approach to removing barriers in recruitment, retention and progression and drive cultural, attitudinal and organisational change.

Employers will also receive practical steps, guidance and resources to proactively address racial inequality. This will include improving understanding of institutional racism, and improving awareness of how organisational processes and practices can lead to race-based unfair treatment.

Research already shows that companies with ethnically diverse executive teams are 33% more likely to have higher profitability and reduced economic losses due to better staff retention and engagement.

It is socially and legally important for businesses to promote fairness and inclusivity in the workplace.

In becoming a leading Fair Work Nation that offers all individuals an effective voice, opportunity, security, fulfilment and respect, Scotland will need to not only have employers that take forward fair working practices in terms of pay and job security, but will also have to have workplaces that are truly inclusive and reflective of Scotland’s population.