A response to the McGregor-Smith Review on ethnic-minority progression in the workplace

March 5, 2017

Last week, the long-awaited McGregor-Smith Review examining ethnic minority progression in the workplace was published. There has been much attention given to these issues in recent times. November 2016 saw both the Parker Review into minority representation on boards and our own report, Bittersweet Success?, while the Government is currently conducting its Race Disparity Audit of the ethnic-minority experience of public services.

Baroness McGregor-Smith addresses an issue that is important for all Britons — minority and majority alike — and we welcome some of the proposals she has made, such as the greater disclosure of company data on ethnic-minority progression. Unfortunately, however, the report overall is statistically crude, overly pessimistic, and unhelpfully shaped by the preoccupations of the lobby groups that dominate this field.

So, what are the problems?

Firstly, there is little sense in McGregor-Smith’s recommendation that all national-level organisations, across their internal hierarchies, should reflect the ethnic composition of the wider workforce — according to McGregor-Smith, 14 per cent of the working-age population is non-white.

Almost half of Britain’s non-white minority population are immigrants, many of them recent ones, and many have language difficulties along with the restricted levels of social capital and cultural knowhow that result from having been part of our society for a relatively short time. Many will have rudimentary levels of education. It is therefore unrealistic to expect these people to be taking up places in magic-circle law firms or leading professional-services companies.

Instead, we should look to set more achievable and realistic targets. In our aforementioned Policy Exchange report, we assessed the level of minority representation at the top of business and in the higher professions, against the 9 per cent of Russell Group graduates from a non-white ethnic minority who graduated in the mid-1990s (and could be expected to be in senior positions now). This is a far better benchmark against which to assess the success of ethnic-minority progress to the very top.

Then, there is the tired dogma of the business case for diversity. As ever, this comes down to one report by McKinsey and Company, which identified a correlation between the share of minority people at managerial level, and company success. In no way, however, is it shown how this correlation is also a relationship of causation, and — as we made clear in our own report — there are all sorts of compelling theoretical arguments for the direction of causality being in the other direction, or, indeed, that it might be spurious.

McGregor-Smith makes the bold claim that the potential benefit to the economy from full representation of non-white minority people across the labour market, through improved participation and progression, would amount to £24 billion a year. Closer inspection of the methodology employed reveals this figure to rest on a series of ‘heroic’ assumptions. The minority population is highly unlikely to match the distribution of the majority not only for the reasons outlined above, but also because it is younger, and those in positions of responsibility tend to be older.

Instead, we now need to pursue the argument that ethnic-minority progression and inclusion is a matter of basic justice, and that it is also essential if we are to be a successful and integrated multi-ethnic society. We need to stress more clearly the ideological and moral cause, rather than hide behind the ‘pie in the sky’ assertion of bottom-line benefits.

McGregor-Smith also gives far too little attention to the successes of minority-ethnic groups, and in particular the Chinese and Indians who now significantly outperform the white British both in education and in access to higher-managerial and professional jobs. (Although studies have shown these groups to be relatively underpaid, once key variables — such as educational attainment — are taken into account).

Instead, McGregor-Smith’s focus is on over-representation at the bottom, without any acknowledgement that this may have something to do with the challenges that any immigrant from a different culture faces, or may result from the choices made by men and women from more traditional cultures. (For instance, as my analysis of Understanding Society data — cited in the Casey Review, and extended in my recent Policy Exchange blog, Singling out or standing out34.6 per cent of Muslim women agree that wives should stay at home while their husbands go out to work.)

Too much emphasis on the negative will only serve to dampen ambitions. Yes, there are hidden biases and discrimination is still a reality, but there have been significant advances, too. Policy Exchange research found that the Senior Civil Service today looks very much like its key pipelines back in 2008, in terms of ethnic make-up, and also like the shares of minority entrants to the Fast Stream around the late 1990s. Today’s NHS consultants look like the registrars of 2009, and also like the trainee cohort that came through at the turn of the century. And today’s partners at law firms mirror the ethnic composition of yesterday’s associates. The talent is coming through. It is only at the very very top of organisations or professions that there appears to be a lack of minority breakthrough, such as on FTSE 100 boards, in the case of NHS directors, and at the pinnacle of the Civil Service.

We will get there on this, but we must accept that there is no overnight fix.

Policy Exchange will later this week be producing a more extensive critique of the McGregor-Smith Review.


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