Dr Wolfgang Seidl
Lucy Brown
Senior DEI Consultant and Global Pride Co-Chair, Mercer
Michelle Sequeira
Michelle Sequeira
Senior Principal Consultant and DEI Leader, UK & Europe, Mercer


Racial equality in the workplace has historically focused on, and underachieved in, employing representative numbers of racially and ethnically diverse (R&ED) groups in senior, visible positions.

 

The reality is that achieving racial equality is about more than representation, it is about achieving equity in opportunity, experience, pay and benefits across the workforce. And that requires businesses to commit to driving measurable change throughout the organisation to embed an inclusive culture. There is some way to go.

 

Mercer’s Health on Demand research 2022 showed only 17% of ethnic minorities feel their employer ‘cares a great deal’ about their health and wellbeing. Mercer Global Talent Trends research 2022 also revealed a significant and discouraging “say/do” gap between the values companies express publicly and their impact internally.

 

It has been easy for businesses to solely focus on gender equality, but the events of 2020 provided stark wake-up calls.

 

There is plentiful data to show that different ethnic groups were disproportionately affected by the impact of the Covid-19 pandemic, both in health terms and in the broader social, psychological, and financial challenges of furlough and lockdown. George Floyd’s murder and the subsequent protests catapulted racial injustice into the spotlight globally, providing a readymade platform for people to challenge their employers on their policies and practices.

 

Anti-Asian hate speech increased by 1,662% in 2020, including the creation of racist slurs that did not exist pre-pandemic. Yet, in 2022, the Mayor of London states that the Metropolitan Police Force still needs to address “the systemic racism”.

 

Not much has changed despite the growing awareness.

 

Now there is increasing pressure on businesses to comply with ESG (Environment Social Governance) good practice; the UK government is due to provide guidance around calculating an ethnicity pay gap, and the EU is launching a directive on pay transparency.

 

It is time for businesses to get a data-based perspective on the employee experience. It is also important to consider this from the lens of career, health, and wealth to solve for inequities that may exist across the employee journey. 




1. Closing career gaps



Within the Future of Work, there is potential for a social divide between those returning to the office and those that do not. Remote and hybrid working arrangements can leave workers feeling less connected – R&ED employees are more likely to be in that group, with 24% working remotely against 14% of White peers.

 

Alarmingly, almost three-quarters (72%) of UK executives said they were concerned about equitable promotion prospects for colleagues working remotely. 67% of males believe that work gets done in an office.

 

As hybrid working becomes established as the norm, these insights raise questions for employers regarding their strategy for attracting, retaining, nurturing, and promoting a diverse talent pool. Only 47% of organisations plan to monitor hiring/promotion/attrition by ethnicity.

 

Organisations will need to work hard to prevent hybrid working from unravelling their DEI gains. This will require a threefold approach:

 

  • Assess workforce data with a DEI lens
  •  Gather the employee voice to understand key concerns
  • Review flexible and home working policies to ensure there is equity of experience for all employees.

 



2. Closing health gaps

Health disparities are influenced by numerous social, economic, and systemic factors; social determinants of health may account for up to 80% of health disparities.

 

Employers must provide health-related benefits that meet the specific needs of diverse groups. Yet many companies are failing on that front, whether due to limited choices or because targeted benefits are poorly signposted.

 

R&ED employees are more stressed and anxious than White colleagues (63% compared with 47%) but find it harder to talk about mental health concerns.

 

More generally, there is a clear need for the health and wellbeing needs of specific groups to be catered for with carefully targeted programmes from healthcare providers.

 

Reducing health-related racial inequities will require organisations to:

 

  • Increase psychological safety via gold standard employee resource groups
  • Review benefit provisions in terms of access and take-up from the perspective of different ethnic groups to ensure all employees get the support they need.






3. Closing wealth gaps

Furthermore, there remain significant disparities between R&ED and White employees in career advancement and pay - and they persist even after accounting for relevant factors such as education or location. These “unexplained” differences show employers are failing to deliver career or pay equity, and they remain the biggest obstacle to R&ED workers thriving professionally and financially.

 

The wealth gap is compounded by the disproportionate impact of issues such as furloughing in 2020 and rampant inflation in 2022 on lower socioeconomic groups - where Black households are concentrated. It is only by differentiating between groups that employers can identify where help might be most needed.

 

By gathering good workforce data, measures such as targeted financial education and financial wellness support can be implemented. But racial equality involves going beyond support strategies and proactively adjusting the pay and advancement prospects of R&ED groups


4. Move the dial on racial equality

Achieving racial equality is challenging – and only succeeds within an inclusive workplace; but the benefits to businesses of a thriving, motivated and committed workforce cannot be underestimated.

 

To make meaningful progress in closing persistent gaps, we need a more rigorous examination of racial disparities and an understanding of how to address them more rapidly. It is time to dig deeper into what actions will make a difference.

 

Collecting data is the first step, next is to use that data to the fullest potential and gain clear insights into the equity within your workforce and the sustainable solutions that will be most impactful.

Related insights

Diversity, Equity and Inclusion
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