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Published 13 February 2024
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Are Workers from Ethnic Minorities Getting a Raw Deal? Here’s How Businesses Can Help

National data paints a stark picture in which ethnic minority workers are earning far less and disproportionately hold lower-paying positions than their white peers. Here’s what experts say should be done to solve the growing issue.

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For many ethnic minority workers in the UK, there’s a substantial labour pay gap and fewer seats at the table of opportunity. And women from these backgrounds, in particular, shoulder the brunt of this economic pain.

The research paints a troubling picture. The number of ethnic minority workers with insecure employment has more than doubled from 2011 to 2022, according to analysis from the Trades Union Congress (TUC).

The number of insecure workers rose by 700,000 over that time period to 3.9 million as of 2022, and ethnic minority workers accounted for two-thirds of the increase, the TUC found.

Insecure employment includes workers on zero-hours contracts, seasonal, agency or temporary work, or low-paid self-employment. Zero-hours contracts have low pay, variable hours and fewer worker protections.

Of the 1.18 million workers on zero-hours contracts in 2022, ethnic minority workers accounted for 5.7% of the total compared to 3.2% of white workers, a November 2023 TUC analysis shows. However, ethnic minority women workers are almost three times more likely to be on these contracts, accounting for 6.8% versus 2.5% of white men.

“The TUC warns ‘structural racism in the jobs market is holding [ethnic minority] women back,’ trapping them in low-paid jobs with few rights at work. The TUC calls for action to tackle this racial disparity by measures including banning zero-hours contracts and introducing ethnicity pay gap reporting,” Anjum Klair, a TUC policy officer specialising in labour market and social security, wrote in a November blog post.

Even after women of ethnic minority backgrounds get into higher-paying positions, they still face a significant pay gap.

In a 2023 survey by research group McKinsey Institute for Black Economic Mobility, 23% of black, Bangladeshi and Pakistani women in the UK who land higher-paying roles still earn notably less than their white peers.

“For example, among health professionals, black women earn 23% less per hour than white men, and Bangladeshi and Pakistani women earn 14% less,” according to the study.

Pay and workplace discrimination

Low-paying professions often come with hard work, long hours and few worker protections. The overrepresentation of ethnic minority workers in these positions contributes to the pay gap they face.

These include roles such as caregiving, teaching, health care, cleaning/housekeeping, delivery drivers or construction trades, according to 2021 data on ethnicity in employment, published by the Office for National Statistics.

Discrimination in the workplace is also a problem. At NHS England for example, more staff from ethnic minority backgrounds reported discrimination at work from a manager or colleague: 17% versus 6.8% of white NHS staff in 2021.

What’s more, nearly 20% of black women and 18.4% of women from an Arab background reported high levels of discrimination from a manager, team leader or other colleagues in the past year, according to data from the NHS’s 2022 Workforce Race Equality Standard (WRES) report.

How businesses can foster a more diverse workforce

Racial discrimination often starts with the recruiting process, and workers from ethnic minority backgrounds need to know what red flags to look for. Some employers might disqualify a candidate based on their name or their postcode, said Jemma Fairclough-Haynes, CEO of Orchard Employment Law in Chatham.

A third-generation Briton of Jamaican descent herself, Fairclough-Haynes has seen labour law cases where candidates of colour routinely face discrimination during the hiring process. She also sees people of colour being undercut on pay due to a lack of pay transparency at many UK companies.

Employers can help reduce these instances with certain adjustments, such as removing a university degree requirement from a job application if it’s not required for the role, anonymising applications to remove names and postcodes, and listing salary bands in job posts, Fairclough-Haynes said.

These adjustments can help broaden applicant pools to include more candidates from diverse backgrounds,

“Those are the kinds of things that organisations can start to do to increase the diversity and to make things fair overall,” Fairclough-Haynes said, pointing out that job candidates may feel put off from applying for roles where the company’s marketing doesn’t show diversity or where interview panels don’t include diverse interviewers.

“It’s brilliant in the panels [as an ethnic minority] if you can see it, you can be it,” said Fairclough-Haynes, adding that even if a business doesn’t have ethnic minority leaders or people in high-level roles, they can bring in speakers to show they’re committed to move toward a more diverse workplace. 

Help for entrepreneurs from an ethnic minority background

Fairclough-Haynes’s advice for ethnic minority workers looking to start their own business or grow in their careers is to network with other entrepreneurs of colour to create meaningful connections. “If you are an employee who’s looking to further your career, I’d say do leadership and coaching to build your network. It’s so important [to network]. You can’t underestimate it.”

Don’t forget about small business grants and start up business grants, either. Additionally, here are some resources to help entrepreneurs of ethnic minority backgrounds get support for their businesses:

Image source: Getty Images

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