Firms failing to hire diverse leaders despite pledges, study shows

Three years on from the murder of George Floyd, companies are failing to hire and promote enough senior business leaders from ethnically diverse backgrounds. That is the finding of a poll of 2,000 professional office workers commissioned by executive search firm Zyna. It shows that almost 70% of office workers feel their employers have not increased the number of Black leaders despite countless pledges made after Floyd’s death in May 2020 and the rise of the Black Lives Matter movement.

Personnel Today reports on this highlighting how most companies had ‘begun work’ to address racism in their organisations, yet 57% of Black staff felt they had been passed over for promotion, compared to 34% of white staff. Almost six in 10 of those employees who had been overlooked for promotion felt it was down to the colour of their skin. Three-quarters of Black staff polled for the survey thought they were “generally underrepresented” in the workforce.

Marcus Whyte, founder of Zyna Search is quoted saying: “It’s a positive sign that work to address racism in the workplace had begun in offices across the country but the report shows more work still needs to happen especially in terms of senior leaders and those with influence and power in the workplace.” He points out there are no Black CEOs or chairs in the current FTSE 100, despite pledges made in 2020. He says: “In a labour market that is fighting for top talent there is a huge opportunity for diverse organisations to steal a march and appeal to different and broader talent pools.”

We agree, there is a huge opportunity here and a number of our clients are on to this. Shuabe Shabudin is a D&I specialist who is part of a team helping clients with that exercise and earlier he joined me by video-link to discuss it. He told me step one is convincing the board: 

Shuabe Shabudin: “It’s something that's often spoken about and clients will often say, particularly those clients that are in a straight HR background, that they find it difficult to break through that wall, to break through the ceiling to get up to C-suite, to get up to the board, and I often refer to it as being a carrot and a stick. So, the carrot is, morally and ethically these are just the right things to do. However, sometimes we do have to be honest and the stick approach needs to be used. The stick approach, for me, is well how does this add to my bottom line? It’s all very well what you're saying, Shuabe, I’d love to do that but I haven't got the funds to, I don't know that it will make any money or make any savings if we if we take your advice. So, when there are reports such as this which highlight that there are still very, very, very big issues in relation to the recruitment and the retention, the hiring, of people from a minority ethnic background into senior positions, well, it just shows that there is work that still needs to be done. You can also look at it as a distinguishing factor. So, if there's work that needs to be done, it's a way to set yourself apart from your competitors, it's a good story to tell, again, both morally, ethically, and then also from a business-critical point of view. So, I say to the HR colleagues that I'm working with, look, use this information, use this data, use these reports, to show that it is a live issue, to show it's something that's important to people and then the way that you can make it a benefit is to say, and this is how we can make ourselves an employer of choice, this is what we can do to win, and retain, the best talent which is an ever increasing, or a continually difficult, task.”

Joe Glavina: “To add to that, Shuabe, you’ve also got the reputational angle to this – diversity looks good – as well as the financial angle – diverse businesses are more productive – and the wellbeing angle – diverse workplaces are happier.”

Shuabe Shabudin: “Yes to all of those points. There is a significant amount of empirical data which shows that a more diverse organisation is more productive. I think you could also say that an organisation which is more diverse will then be able to have a greater sense of belonging to all of the employees, belonging makes you happy, and I think we can all say that we work better when we are happy and when you're happier and you work better productivity increases and, of course, that's going to add to the bottom line as well there. From a reputation point of view, yes I think it's one of those scenarios where you want to be on the right side, you don't want to be on the wrong side. If you are known as an organisation that doesn't have any level of diversity, or an acceptable level of diversity, if I can call it that, that's obviously going to act as a negative indicator, or if you can seem to be taking steps genuinely to be furthering the levels of diversity in your organisation, it's going to be something that people warm to and, nowadays, with Gen Z or the Alphas as we're going to be coming to, these kinds of issues are much more important to them than whether they get a company car and gym membership, for example. So, very important reasons, very important factors to take into account as well.”

Joe Glavina: “It’s interesting how the data shows a lot more progress has been made on gender diversity than ethnicity and I wonder if that’s connected to the way the two are regulated. So, gender pay gap reporting is mandatory but ethnicity pay gap reporting is purely voluntary. Is that a factor, do you think?”

Shuabe Shabudin: “Quite possibly, Joe, yes. I think that's an interesting way of looking at it and, perhaps, not least because whether or not ethnicity pay gap reporting is going to be made mandatory is something we've been discussing literally for years. So, I think it could well be that it is therefore seen as something that is of - gosh, can I say less important, or less business critical, less impending, because of that and, certainly, there are more structures in place to deal with the gender inequality that there may be in a work in a workforce. So, I think there's something in that and, again, it's another ceiling, perhaps, it's another barrier, that might need to be broken through by HR. But coming to the points we were discussing before, one of the ways is to use this data to say look, this is how we can set ourselves apart in a positive way.”

On that last point, using the data to help set yourself apart, Shuabe has covered that in some detail in his Out-Law analysis piece: ‘Employers must review progress on race and ethnicity commitments’. He explains how to approach the gathering of the data, and the presentation of it, to send a very positive message to the workforce, and the market. We’ve put a link to that article in the transcript of this programme for you.  

LINKS
- Link to HRNews programme: ‘Employers must review progress on race and ethnicity commitments’