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Sandra Kerr

Business in the Community

Race Equality Director

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Why workplace diversity is everyone’s business


Last month a report by Aldermore found that 26% of SMEs have no plans to make workforce diversity a priority for their organisation in the next 12 months, while a further 22% said it was a low priority for them.

This is a disappointing statistic, but it also shows the importance of persuading all businesses – regardless of their size – to embrace workplace diversity and the benefits it can offer.

We know that there are challenges facing SMEs that are not applicable to larger businesses; for example, they may simply not have a large enough team to be considered diverse, or do not have the HR structures in place to deliver a diversity and inclusion strategy in the way a larger organisation can.

But there are some areas in which employers of all sizes can work to improve the diversity of their workforce.

The business case for workplace diversity

Earlier this year, the McGregor-Smith Review advised that organisations with more than 50 employees should publish five-year targets for Black, Asian and Minority Ethnic (BAME) representation within their organisations and report against these annually, as well as publishing workforce data by ethnicity and pay band and appointing a board level sponsor for diversity issues.

With one in four young people in the UK now coming from a BAME background, this approach could encourage employers of all sizes, including SMEs, to draw from the widest pool of talent and address the looming skills gap.

The review also advised that all organisations should use contracts and supply chains to promote diversity. This could potentially have a significant impact on SMEs’ ability to win business in the future, as the least diverse may risk missing out on valuable contracts.

There are also financial benefits to employing a diverse workforce. McKinsey’s Diversity Matters report found that companies in the top quartile for ethnic diversity were 35% more likely to financially outperform those in the bottom quartile, suggesting that a diverse workforce is hugely important for an organisation’s growth.

One of the key issues for many employers is recruitment – how do SMEs go about attracting a workforce that reflects the community they operate in?

Despite this, there remains a persistent BAME employment gap; one in eight UK adults comes from a BAME background, but only one in 10 people in employment are from a BAME background. At management and senior management level, this figure shrinks to one in 12 and one in 16 respectively.

Without the engagement of SMEs, that gap is unlikely to close.

What SMEs can do

So how can SMEs build diversity into their organisation with a small team and without incurring significant costs such as extra training for employees?

The answer lies in the commonalities across all employers such as recruitment, progression, pay and what employers of all sizes can do to attract, engage and retain diverse employees.

One of the key issues for many employers is recruitment – how do SMEs go about attracting a workforce that reflects the community they operate in?

Large organisations should be leading by example.

We would encourage all employers to use local population data to set recruitment and retention targets for BAME employees, and to monitor the number of BAME candidates at each stage of the hiring process.

Using a wide range of recruitment channels (including local careers fairs, local partnerships, job centres, websites and social media as well as engaging with existing employees) and jargon-free job descriptions that reference the skills needed can also be effective in increasing BAME hires.

Additionally, unconscious bias training for those involved in recruitment and progression processes can make recruiters aware of biases and take steps to address them.

There is a wealth of free online resources available to help employees measure their unconscious bias, therefore reducing any potential concerns around the cost of providing training.

This is particularly key for SMEs in industries such as transport, engineering and construction. According to our Race at Work research these are among the sectors with some of the highest levels of racial harassment and bullying.

We know that SMEs are more likely to work with suppliers known for workforce diversity.

Finally, individuals within businesses of all sizes should get involved in mentoring and reverse mentoring. Our Race at Work research provides evidence that mentoring is highly valued by BAME employees. Furthermore, our Diversity Benchmark shows that mentoring has a significant impact on BAME employees’ progression and retention.

In SMEs, where employees may have opportunities to gain a mixture of skills and progress more quickly than in traditional employment, this type of support from leaders within the organisation can be vital.

The role of large organisations

While all the steps outlined above are approaches that large organisations can also take to increase BAME representation within their workforces, they also have a critical role to play around the use of supply chains.

We know that SMEs are more likely to work with suppliers known for workforce diversity.

Therefore it follows that large organisations should be leading by example – not only in terms of diversity within their own workplace, but also by taking workforce diversity into account when choosing which other employers they work with.

We know that tackling diversity issues within a business can often be confusing for employers of all sizes.

Sometimes they simply don’t know what to do or where to start. But by taking simple steps on issues that cut across business, organisations can truly reflect the clients, customers and communities they serve – benefitting individuals, employers and society as a whole.

Want to learn more about this topic?

Visit our diversity hub featuring expert articles, interviews and opinion pieces on creating a workplace that brings together individuals from all walks of life.

Author Profile Picture
Sandra Kerr

Race Equality Director

Read more from Sandra Kerr

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