Banks and supermarkets are
spearheading a move towards more racial diversity within companies. It fosters
community spirit, brings in talent and increases sales, as Philip Whiteley
reports
The new Leadership
Challenge initiative by the Commission for Racial Equality has a familiar air.
Three years after its debut, the "new" initiative could be called a
re-launch. It will include an annual awards scheme, action plans for
individuals and organisations, and questionnaires for signatories to return by
January, giving information on organisations’ ethnic minority profile. Critics have
argued that it will be "just another awards scheme" coupled with an
exercise in gathering statistics (News, 5 December). It questions
whether the CRE is too timid to talk up the business benefits of diverse
employment. The parallel initiative to the Leadership Challenge,
the Race for Opportunity, promotes the business aspect, with case studies to
excite the private sector. One example has been Lloyds TSB bank, which set out
to hire Bangladeshi sales people in east London, and found that
sales soared because they were able to attract many Bangladeshi individuals and
businesses to the bank. Many of the new recruits gained promotion
within the bank.
Benefits for all
By contrast
the task of monitoring the numbers of ethnic minority staff, as set out in the
Leadership Challenge, looks dull and bureaucratic. It is more inspiring to say
"look at what we can achieve" than "this is what you should
do". Susie Parsons, chief executive of the CRE,
denies that the two approaches are mutually exclusive. "Part of the Leadership
Challenge is saying ‘look at what we can achieve’," she said. "At the
breakfast briefing [at the beginning of December] there were organisations
saying "This is what we can achieve by paying attention to race
equality’"- for example Bill Dalton, chief executive of HSBC Bank, said
that the focus on race equality benefits customers, staff and shareholders." Some
monitoring is essential, she added. "The action plan is no different from
any other company business plan. It is a cycle –Â you say what you are going to do; you measure and monitor to make
sure you know what is happening; you review what has happened and learn from
that. It is all about learning." Most of the ideas for the new
initiative, including the awards, came from consultation with signatories to
the Leadership Challenge. "People said that there needs to be more
recognition of achievement in this area," said Parsons. "We are
consulting, and if people think awards will be a helpful and inspirational way
of marking achievement then we would go ahead."
Measuring tools
Francesca
Okosi, director of human resources at the London Borough of Brent, and one of
the few black personnel directors in the UK, also disputed that the two
approaches are exclusive. "There are some people doing good practice, but
unless there is some kind of framework to assist, you can be putting in a lot
of effort for little output". "The Leadership Challenge, and
the auditing tools that the CRE produces, and which we use, at least gives us a
framework for measuring the impact of what we are trying to do." The Race
for Opportunity campaign director Andrea Callender herself encourages
organisations to monitor their progress and not rely entirely on goodwill. She
welcomed the new initiative of the Leadership Challenge, which has given it
teeth. "There is going to be a focus on proving; on providing evidence [of
progress]," she said. Okosi said that the dilemma is
identical to other areas of personnel management, she argued. Organisations
fall into the trap of believing that something that is ethical is a different
matter from improving service. "With many things that are
seen to be ‘soft’, the business side is underestimated," Okosi added.
"Often you cannot demonstrate with hard figures that when this was done it
had this direct impact." But she added, "Sainsbury’s and
Barclays have taken the initiative on board. Those larger organisations can
demonstrate the benefits, and the research by the CIPD demonstrates how these
kinds of approaches in general terms do affect the bottom line. Organisations
which are successful have diversity and good employment policies. You do not
get talent if you subscribe to the very old exclusive approach." Like the
banks, supermarkets have taken a lead. In both sectors the purchasing power of
ethnic customers has forced their hand. Charlotte Parton, equality and
diversity manager at Sainsbury’s, said that greater opportunities for minority
groups is just an extension of good marketing. "We want to
look at the profile of people in the stores and see how they reflect the local
community. We have listened to what our customers are saying and we have an
ethnic trading department dedicated to looking at products that people want to
buy." One result has been selling Diwali produce alongside halloween goods
in areas with a Hindu population. She added, "Attitudes and
behaviours of our colleagues have a direct impact on customer satisfaction. If
we have commitment to diversity it allows us to recruit the top talent, retain
them and sell to a diverse marketplace."
Commercial pressure
Once the
virtuous circle of broader recruitment patterns and better customer service is
established – and word gets round – it will be seen as good practice. But
Francesca Okosi warned that progress is not guaranteed. "At
the moment race is in vogue," she said. "The economy is buoyant;
people are prepared to talk about diversity. If there is a recession will it go
off the agenda again? That is what happened last time." As with
other personnel policies the business benefits are strong but easy to lose
sight of when the quarterly figures come in or the economy takes a downturn. Given
this, Sainsbury’s will be an interesting company to watch. No one could be
under greater commercial pressure than chief executive Peter Davis, brought in
to restore the firm’s status as  the
UK’s top retailer. Davis is strongly committed to the Leadership
Challenge, and asks for two-monthly updates on progress in equal opportunities.
Could commitment to racial diversity be the key to success for Sainsbury’s? That would be the ultimate
case study.
How Sainsbury’s does it
·
Recruits
from universities with high ethnic minority population
·
Seeks
to reflect local community in workforce profile
·
Has a
two-year business plan on equality and diversity, headed by finance director
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·
Organises
compulsory training for managers
·
Has a
committed chief executive to the scheme
