How will we close the minority ethnic career gap?
- 20 November 2020
- 15 minute read
Despite growing awareness, many minority ethnic employees face obstacles in job progression
A better career path can lead to better financial outcomes and financial wellbeing
Mentoring schemes and senior minority ethnic role models make a big difference
There are also huge economic benefits to a more diverse and inclusive workforce
Back in February 2020 The People’s Pension released a report titled Measuring the ethnicity pensions gap and it found the difference between pension income in 2017/18 for those from minority ethnic communities was 24.4% lower than that of people from white backgrounds, or nearly a quarter. That amounted to £3,350 a year.
As we explain in our article Mind the gap: ethnicity and retirement inequality, this is directly connected to workplace inequality. People from minority ethnic backgrounds are more likely to be in part-time employment and/or in lower-salaried roles. This can have an effect on their eligibility for the State Pension, and for enrolment in company pension schemes.
Over recent years, there has been growing awareness around improving the career opportunities and progression for people from minority ethnic backgrounds. But a considerable career gap remains and there is still plenty to do.
According to the government’s ethnicity facts and figures service as at September 2020, more than three-quarters of white people across the UK (77%) are employed, compared with around two thirds of people from all other ethnic groups (65%). This represents a 12% gap. But for people of Pakistani and Bangladeshi ethnicity, this falls to 57%; a gap of 20%.
To look at the stats in another way, according to the recruitment agency Intelligent People, ethnic minorities account for 14% of the UK’s working age population, but only 10% of the workforce as at December 2019. And, highlighting the difficulty of progressing within their chosen careers, only 6% of senior management positions are held by people from minority ethnic backgrounds.
Discrimination and lack of role models
A major reason for these differences seems to be discrimination. In August 2020 Business in the Community released Race at Work: Black Voices. It reported a third of black respondents felt the colour of their skin would hold them back from their next promotion. A third of employees had also experienced or witnessed racial harassment from a manager, and 17% said they had experienced or witnessed it from a colleague.
The report also highlighted the lack of progress in addressing the absence of diversity in senior leadership roles. Without role models and senior mentors, it is much more difficult for minority ethnic employees to imagine themselves in those positions, and for senior management to imagine minority ethnic people working alongside them.
Better financial outcomes
We know that better career outcomes can lead to better financial outcomes. The more you earn, the more you can save and invest. It gives you the opportunity to take control of and plan your financial future and your financial wellbeing.
So, tackling this obvious minority ethnic career gap is very important. It also makes good economic sense.
In July 2019 the Chartered Management Institute calculated that full minority ethnic representation would be worth £24 billion a year. And research by McKinsey has found a direct link between increased racial diversity and business performance. According to its January 2018 report Delivering through Diversity, companies in the top-quartile for ethnic/cultural diversity in their executive teams were 33% more likely to have industry-leading profitability.
How can we change the career opportunities for minority ethnic employees?
Looking at the statistics and talking about encouraging diversity is all very well, but we thought it important to talk to someone who was living this experience and listen to what she had to say about it.
So, here are some great thoughts on the subject of closing the minority ethnic career gap from Nirmal Kaur, 43, who works in the Schroders Personal Wealth support team. She describes herself as a British Sikh, who is proud of her English and Punjabi heritage.
“I don’t feel I’ve experienced discrimination directly,” she says, “But it’s maybe best to describe it as like a barrier to moving to a higher position. With regards to promotion, I feel like it’s not what you know, but more about ‘if the face fits’.
“When you look at the senior management at big companies, it’s all middle-aged white males, and you just don’t see yourself there” she adds. “We need to move on from these stereotypes. The senior jobs can’t just be for men who don’t have childcare commitments, can work all hours, and don’t need flexibility.”
“These stereotypes are unfortunate for women and for ethnic minorities. We feel we can’t go for the senior roles because we aren’t ‘right’ and don’t feel good enough. We may be qualified; we may be experienced, but we’ll be reluctant to go for it. When we should be thinking anyone with the right qualifications and right experience can do this. We can go for it and ethnic background shouldn’t be a hurdle.”
Mentoring and better awareness
Previously in her career, Nirmal was paired with a senior mentor and she explains how this changed her attitude. She and the director would talk about what they did at work and how they got into their roles. She was also introduced to other people from the business and learned about different areas. In turn, she shared information about her background and culture.
“I discussed things that were important to me and explained the meaning of certain religious Sikh festivals with my mentor. I wanted to raise awareness of other festivals and said they should be in the office calendar, along with some explanation. It would be nice to have recognition around these other events, because it makes people from different backgrounds feel more comfortable.
“I’m really happy to see more diversity in our culture, on TV, in soaps, in adverts. It creates a positive vibe around minority ethnic people. Hopefully it will make others think they’d like these people around and they know them a bit better.”
For Nirmal, the hurdles to a career began early on when she was not encouraged by her family: “I got old-fashioned advice: go to school, get married, your husband will provide. I didn’t do further education and I married young, then moved to another city,” she explains. To get where she is today, Nirmal has had to climb slowly from lower-qualified jobs.
Another important point she wants to raise is around minority ethnic wellbeing. In most Asian households, she says, it’s very usual for women to take care of every aspect of housework and cooking.
“If you’re working full-time and then you have to do everything at home, it really affects your wellbeing,” she says, “There’s no free time, no relaxation. People don’t talk about these things, but we really need to. I don’t think we should all be suffering in silence.”
To keep taking the all-important steps on the long path to equality and full diversity at work, Nirmal believes we all need to talk more in our workplaces about minority ethnic backgrounds and minority ethnic experiences. She hopes more openness and relaxation around these issues will lead to more awareness and, eventually, to a much more equal and diverse workplace. A workplace for all.
Where do we go from here?
The career disparity is just one factor that leads to some minorities having poorer financial futures than the majority white population. But it is a major one and one we can all work towards eliminating.
If we are to improve the financial wellbeing of the nation, we need to face up to the roles we can play in ensuring a fair and equal chance for all. That means being aware of discrimination, both overt and covert, and supporting our colleagues in their careers.
Any views expressed are our in-house views as at the time of publishing.
This content may not be used, copied, quoted, circulated or otherwise disclosed (in whole or in part) without our prior written consent.
Fees and charges apply at Schroders Personal Wealth.
In preparing this article we may have used third party sources which we believe to be true and accurate as at the date of writing. However, we can give no assurances or warranty regarding the accuracy, currency or applicability of any of the content in relation to specific situations and particular circumstances.
Let's start with a free initial consultation
We'll begin with a free, no obligation conversation to understand if our service is right for you. There are no hidden fees or charges, and you’ll only pay if you choose to go ahead with the recommendations in your personalised financial plan.