Proposals to end ethnic inequality at work 'could boost economy by up to £24bn'
British firms could boost the UK economy by up to £24 billion a year if they enforced new proposals designed to stamp out ethnic inequality in the workplace, according to a Government-backed review.
The Baroness McGregor-Smith review wants companies with 50 or more staff to publish a breakdown of their workforce by race and pay to help remove barriers for people from black and minority-ethnic backgrounds (BME).
It found that the UK economy is currently missing out on 1.3% of annual growth because BME workers do not achieve the same level of progression as their white colleagues.
As part of the measures, companies will have to create five-year targets for diversity and pinpoint a board member in charge of delivering the goals.
It comes as the Government launched a new business diversity and inclusion group, which will be spearheaded by business minister Margot James.
Speaking about the Government-backed review, Baroness McGregor-Smith said no one should struggle to reach the top of any organisation because of their race.
"The time for talk on race in the workplace is over, it's time to act.
"If businesses and the Government act on my recommendations, it will show everyone from a minority background that Britain's workplace is for everyone, not just the privileged few.
"The consequences of continuing to do nothing will be damaging to the economy and to the aspirations of so many.
"So from the cabinet table to the board rooms, there is no more time for excuses - just change."
The review found that only 6% of people from BME backgrounds reached top-level management positions, while their employment rates were 12% lower than their white counterparts at 62.8%.
People from BME backgrounds account for 1.14% of the working population, but that number is expected to rise to 21% by 2051.
Ms James said outdated attitudes or lack of awareness about ethnicity in the workplace must be challenged.
"As this report shows, the economic benefit of harnessing untapped talent is huge and I urge employers to implement these recommendations to ensure everyone can reach the top of their career - whatever their background."
Alongside Baroness McGregor-Smith, the diversity and inclusion group will include Sir Philip Hampton and Dame Helen Alexander, who are carrying out a review of female leadership at FTSE 100 companies, and Sir John Parker, who is concluding a consultation on recommendations to increase BME representation in the board room.
The group, which will meet quarterly, will also feature representatives from the Confederation of British Industry (CBI), the Institute of Directors (IoD) and the Financial Reporting Council (FRC).