British firms sceptical about workplace diversity

Feb 21 2007 by Nic Paton Print This Article

British businesses are sceptical about the benefits of a multi-cultural workforce and have little interest in employing people from ethnic minorities.

A study by Policy Research Institute on Ageing and Ethnicity has found that small and medium-sized British businesses have made only slow progress in employing people from ethnic minorities.

Managers and owners of smaller businesses were alos doubtful about any potential commercial benefits resulting from an ethnically diverse workforce.

The study of 300 small firms found that in more than three-quarters, fewer than one in 10 employees were from ethnic minorities.

Nine out of 10 had one in 10 or fewer ethnic minority managers, while more than a third had none.

Nine out of 10 also said that they ad no idea about the ethnic backgrounds of their UK customers.

Few of the firms had strategies for increasing ethnic diversity internally or engaging with ethnic minority customers or suppliers, the survey reported.

And just a third believed having a diverse workforce contributed to improved business performance and profitability.

Yet while almost 45 per cent said they had policies for making older workers feel more included, with 42 per cent doing the same for female staff, only a quarter did this for ethnic minority staff.

"It's essentially a matter of improving SMEs' education and a step change in their actions," said PRIAE director Professor Naina Patel.

"The evidence for the benefits of ethnic diversity in the workplace is compelling. When we spoke to ethnically diverse SMEs we got the same story: diversity prompts greater awareness of business opportunities, particularly with regard to identifying new customers and developing new markets," she added.

Similar attitudes alos emerged towards export markets, with SMEs largely focussing on on traditional English-speaking markets such as North America, Australia, New Zealand and South Africa.

But more ethnically diverse SMEs, while exporting to these markets, were also more likely to be tapping into Latin America, the Middle East, North Africa and South and East Asia, it found.

The greater the percentage of multi-lingual managerial staff, the more confident the SMEs were in achieving their export market objectives, the report found.

"Of course diversity in itself doesn't guarantee improved business performance, but there is an obvious case for SMEs to be made more aware about the potential advantages of employing people from ethnic minorities," said Patel.

"This isn't a case of introducing 'affirmative action' with regard to companies' employment policies: it's about making the most of a valuable, but still largely untapped, resource," she added.