Minority report: companies wake up to the benefits of diversity

Until five years ago, Amir Kabel says it was hard to get companies fired up about ethnic diversity. Many employers simply wanted to ensure they complied with anti-discrimination laws and leave it at that.

“They would often just revert to [doing] the minimum,” says Mr Kabel, head of diversity and inclusion at Green Park, a UK-based executive search firm. “But the conversation is changing. Now, people view it as an opportunity.”

From established accounting firms to tech start-ups, companies are starting to take supporting minorities more seriously, diversity experts say.

One reason is that recent reports, including 2014 research by McKinsey, the consulting firm, have argued that diverse companies are more likely to be innovative and have higher returns. The public is also becoming more vocal, often using social media to rail against sectors that lack diversity — this year’s #OscarsSoWhite hashtag is an example.

Mr Kabel says that, for many employers, a starting point is to collect and analyse ethnicity data. This helps pinpoint the root of a diversity deficit, be it in recruitment, retention or promotion. He points to Transport for London (TfL), which runs the capital’s public transport network, as an example of good practice. TfL publishes annual data on how under-represented groups fare in terms of job applications, job leavers, promotions and pay.

People from ethnic minorities hold only one in 16 senior management roles in the UK, although they account for one in eight of the working age population, according to a 2015 study by Business in the Community, which advises public and private sector bodies on diversity. Just three chief executives of FTSE 100 companies are not white.

Some employers use targets to focus their efforts. Channel 4, the UK broadcaster, launched a diversity plan last year that aims to increase ethnic minority employees from 15 to 20 per cent within five years. Another goal is to raise the proportion of such staff in leadership roles from 8 to 15 per cent. The targets are above the national average partly because the broadcaster is based in multiracial London.

“Having targets . . . is an important part of galvanising people to act,” says Dan Brooke, Channel 4’s board member in charge of diversity and its chief marketing and communications officer.

For example, the broadcaster now holds open days across the UK, tells external headhunters that it cares about supporting minorities, has compulsory diversity training for all staff and publicises its diversity push on social media.

Mr Brooke says the latter has been particularly helpful: “When you start to get it out there on Facebook, for example, we know from what people say when they apply for jobs here that it is having quite a significant impact.”

The proportion of Channel 4 staff from ethnic minorities has risen from 15 per cent to almost 18 per cent since the diversity plan was launched in January 2015. In senior roles, it is up slightly from 8 per cent to just over 9 per cent.

In Silicon Valley, the challenge is to attract and foster employees from specific minorities. Google, Microsoft and Facebook all have a US workforce that is 55-60 per cent white, roughly in line with 2014 figures for the country’s population. However, among remaining staff, Asians are over-represented while Hispanic and Latino and black groups are under-represented.

Slack, a workplace chat app that was launched in 2013 and employs more than 450 people, is faring slightly better than bigger, older peers in terms of African-American employees — 4.4 per cent of its US workforce, below the figure of 13 per cent for the population as a whole but above many other tech businesses.

The company started thinking about diversity at an early stage, says Anne Toth, Slack’s head of people and policy. “It’s almost silly not to do this early if you can,” she says.

Because Slack tried to hire from under-represented groups when it had just 85 staff at the start of 2015, it now has employees who it hopes will encourage people in their networks to apply for vacancies. The company plans to double its headcount by this time next year.

Ms Toth says she still has much to do, especially in terms of hiring Latinos, the biggest ethnic group in California. Slack plans to launch a graduate recruitment drive this year that will include visits to local universities.

For many companies, the toughest challenge is to retain and promote staff from minorities once they have been hired. One solution is diversity training, teaching team leaders to ask open questions, rather than make assumptions about their staff. Another tool is unconscious bias training, in which managers often take an online quiz to find out if they favour certain groups without realising.

For minority employees, in-house networks can create a “safe space” to find mentors and talk openly. EY, the professional services firm, runs a support scheme in the US for young recruits from minorities that includes an annual networking event.

Slack has staff groups for people of colour and LGBT employees that provide informal feedback on the company’s diversity projects.

Diversity advocates welcome growing interest in supporting minorities but say there is some way to go and that in many companies ethnic diversity is a lower priority than gender diversity.

“Many of the men who I think have spearheaded things [on gender diversity] have daughters . . . it becomes personal, they think ‘I don’t want my daughter to put up with this stuff’,” says Sandra Kerr, race equality director at Business in the Community. “But for ethnic minorities, if they don’t have powerful leaders in those positions, where’s that personal link?”