Advancing Ethnic Diversity - The Value of Data

We know that representation matters, and culture is critical in attracting, recruiting, promoting and retaining the most talented workforce.

The benefits of ethnic diversity in business have been recognised for some time now. For example, McKinsey’s most recent Diversity Matters Report (2020) looked at data sets for a range of industries across Canada, Latin America, US and the UK. The researchers found that companies in the top quartile for racial and ethnic diversity are 36% more likely to see financial returns above their national industry medians (up from 33% in 2017). The likelihood of outperformance continues to be higher for diversity in ethnicity than for gender.

So why do we lag so far behind on progressing racial and ethnic diversity across the built environment sector?

The Starting Point

Before we move onto what needs to be done to address equity, diversity and inclusion (EDI), we need to understand the makeup of our industry currently. After all, data is essential: you can’t fix an issue you don’t understand.

“What gets measured gets managed”? – a saying commonly attributed to Peter Drucker.

Well yes, and also no. Not of itself, that is. Measurement is the first, albeit critical, step to effectively manage change. ?In the EDI context, collecting and then analysing relevant data is the first step to enable organisations to understand their workforce diversity (or lack thereof) which can then be used to target issues and inform the steps to improve outcomes.

In any event, data speaks volumes. Data often illustrates things better than words, and has the potential to win over even the harshest critics.

When you get it right – collecting and analysing the right metrics – data can provide us with critical insights.

Diversity in the Built Environment Sector

The 2022 Diversity Data Benchmarking Survey captured data representing 270 businesses and almost 370,000 workers in the built environment sector - the largest dataset held across the built environment sector (much larger than the construction census data held by the Office of National Statistics, for example). Built by the experienced team behind the Sustainability Tool, the Diversity Survey provides the benchmark for best practice collection of data based on agreed diversity metrics applicable to all business types and sizes across the built environment. From the largest clients to the smallest businesses in the supply chain, the survey is built to work for all.

• NOTE: The 3rd annual Diversity Survey has just closed, with the 2023 dataset now capturing over half a million workers from over 520 organisations. Analysis is currently underway with findings to be released in December. Follow the FIR Programme to hear about the report launch and 2023 findings.

The goal is of course, to get to a point where we see the community represented across our sector. The Diversity Survey helps us measure whether we are getting there.

So where are we now?

The Diversity Survey collects data across all diversity characteristics, including ethnicity (aligning with ONS categories for comparisons to be made with the community). This characteristic alone provides us with much room for improvement.

Attraction/Recruitment stage

Our data dispels the myth that people from Black and Ethnic Minority backgrounds are not attracted to the sector.

Close to 40% (39.3%) of the 367,000 applicants represented in the survey came from ethnic minority backgrounds. Contrary to popular belief, the issue is not with attraction. The issue is the impediments they face getting into the sector.

• Across every ethnic minority group, it is harder to get a job than a white candidate.
• If we drill down into the rates of recruitment at various stages of the recruitment process (application, shortlist, interview and hire), we know that ethnic minority candidates are successful in achieving a job in the sector at a rate of 50:1. That is, it takes, on average, 50 candidates from ethnic minority backgrounds to achieve 1 successful hire.
• Contrast that to white candidates, and we see a success rate as high as 16:1.
• But more than that, 50:1 is an average – the actual success rate ranges from 21:1 to 78:1, depending on your ethnic background.

You’ll see from this table that applicants fare better if they come from a mixed ethnic background, eg Asian and White (20.8:1), Caribbean and White (23.5:1) or Other mixed ethnicity (25.2:1). The success rates of Caribbean candidates is relatively high (33:1), but those facing higher than the average success rate include candidates from Pakistani (53.7:1), African (58.6:1), Other Black (64.4:1), Indian (74.1:1) and Arab (78:1) backgrounds.

This means that at the extreme, it takes 78 Arab candidates to achieve a successful Arab hire. ?A long way from the 16 to 1 success rate for white candidates.

Disparities are seen across the shortlisting, interviewing and hiring stages.

What we can we draw from this data?

Clearly, recruitment practices are serving as barriers to entry and adversely impacting diversity in hiring. It should not be between 3 to 5 times harder for ethnic candidates to get a job. Not only does this highlight the actual area that requires focus (less on attraction and more on the selection process), but it also shines a spotlight on the need to review organisational and team practices, and to upskill everyone involved in the recruitment process, to truly embed inclusive hiring processes.

Current workforce

When we look at the make-up of our current workforce, we know that:

• Firstly, not all employers are capturing ethnicity data – 18.5% don’t know ethnicity of their workforce and 3.7% of workers prefer not to say (which will at least in part be linked to fears about protecting one's career and what the data will be used for).
• When these unknowns are removed, the total representation figures show that 17.5% of our workforce are from ethnic minority backgrounds, sitting 1% lower than the ONS general population data at 18.5%. Of that 17.5% we see the largest representation from Indian (almost 18%), African (15.7%), Caribbean (10.3%), Pakistani (7.69%) and Other Asian (11.3%) groups.

What can we draw from this data?

At first glance, it is open to argue that the representation rate, only 1% lower than the UK community, is not so bad.

But the question must be asked: What level and quality of jobs do our ethnic minority workers have?

We know there is a problem when we examine ethnic pay.

Ethnic pay gap

The ethnic pay gap is sitting at 8.3% (average of all reported gaps, excluding overtime).

• NOTE: The pay gap is a measure of the difference in average pay between staff from ethnic minority backgrounds compared to white staff. It is not the difference in pay between white and non-white workers for doing the same job (this is equal pay, and it is a legal entitlement for everyone, including those from Black, Asian and Ethnic minority backgrounds).

Therefore, the pay of staff from the listed ethnic backgrounds is on average 8.3% lower than the pay of their white counterparts.

Those from Black and Ethnic minority backgrounds are earning less overall, and occupying fewer senior positions.

• Workers from ethnic minority backgrounds generally receive smaller bonuses – 25.4% lower bonuses than white workers.

What can we draw from this data?

In addition to addressing the ethnic pay gap, the sector needs to significantly improve its capture and reporting on ethnicity. We only saw 4% of organisations capture ethnic pay data, and whilst there is an encouraging 28% of respondents who intend to do so in the future, the large majority (68%) do not report on this metric, and do not intend to do so either.

Attrition & leavers

Turning our attention to attrition, our 2022 data captured almost 20,000 people leaving their jobs. The finding that 17.7% of voluntary leavers come from ethnic minority backgrounds roughly aligns with the 17.5% representation of the total workforce. However, there is a lot of unknown data here as well.

17.7% of leavers’ ethnicity is unknown.

Of those who do leave the sector, we know that:

• They have left the company, but we don’t know if they have left the sector.
• The majority of leavers are Indian (21%), African (13.5%), and to similar extents, Other Asian and Pakistani (approx. 9% each).
• A higher proportion come from other diversity categories, in particular women, LGBTQIA+ and other religions.
• 21.3% leave before the age of 34.
• Those from Black communities’ peak between the ages of 45 to 55, whilst in other ethnic groups the peak is earlier in careers.

Where to from here?

In its simplest form, there are two key takeaways for organisations and their leaders:

1. Understand the problem – you can’t change things if you don’t know what needs to change.

Data capture and detailed analysis is essential. But there's no need to reinvent the wheel. Make use of the free Diversity Survey (built for the industry and with the input of the industry) and become part of the biggest data capture exercise across the built environment sector.

• All respondents gain free access?to in-depth and interactive dashboards that they can use to?benchmark their diversity data against their sector, industry and the ONS data set.?
• Further functionality is available through the Diversity Tool, allowing organisations the unprecedented ability to to drill right down into their supplier metrics and understand the diversity of their full supply chain.
• Full instructions and ongoing support is provided to assist participants to accurately capture and report their data.

Following receipt of your report and informed by the data itself, consult with those who are bearing the brunt of the problems – ERG Groups or others.

Don’t be afraid to call in expertise where you need it. You must also be open to learning.

In a traditionally competitive sector, its important to recognise that addressing these issues must be a shared goal for the sector. Getting to the root of the problem and how to solve it is a shared problem which calls for a collaborative approach to solving.

2. Commit to Action

Data is the first step, but you must use the data to inform and drive your EDI strategy. ?Start with determining from the data, where are your greatest needs?

Use the momentum and commit to action. It may feel too hard, but it doesn't have to be!

The FIR Programme supports organisations to make a positive start and embed EDI principles across both internal business and supply chain activities. Here's some suggestions of where to start:

• Tailor your approach by using our FIR Growth Assessment: receive a 10-point action plan specific to your needs across the 5 assessment areas – commitment, employment, working practices, site environment and supply chain.

• Access the FIR Toolkit, Workshops/webinars, CPD-accredited e-learning, learning pathways and much more.
• For those needing to focus on inclusive hiring practices, you'll find resources on topics such as inclusive recruitment and selection, leading people inclusively, inclusive job adverts and an inclusive question bank for interviewing candidates.
• Build your organisations’ FIR Ambassador Network, upskilling your staff to help drive the changes needed.
• If you need to promote the ‘why’ to get others on board – start by learning about the Business Case for FIR.
• Stay across the latest developments and new resources by signing up on the School website and following us on LinkedIn.

Optimism for the future

I want to finish by sharing my positivity around the sector and the opportunity to change. Whilst there are clearly lots of areas requiring improvement, remember that the changes we are driving forward are positive.

Organisations across the built environment sector can make a real difference – to shape a sector and the experiences of people in it, engaging with it and touched by it.

We are seeing some great results already – for example, our 2022 FIR Culture Impact Survey showed that through engagement with the topic, 83% of leaders have better understanding of FIR, 79% of businesses see improved behaviours, 72% recruit a more diverse team and 68% report that FIR helped them to retain talent.

• NOTE: The 2023 FIR Culture Impact Report will be published soon. Follow the FIR Programme to be notified of this and other FIR-related developments.

Spotlight on Black and Ethnic minority experiences in the built environment

I encourage you to join us at our upcoming virtual conference: Black and Ethnic Minority Experiences in the Built Environment Sector where we will delve into these issues in detail, hearing from experts, industry leaders and workers from diverse backgrounds.

This is a great opportunity to hear first hand of the impact on the sector, and what we can do to fix it. Join us in making the much needed change.

There are few sectors that impact on people’s lives on a daily basis as much as the built environment. Seize this opportunity to meet the challenges head on and work together towards something better.

Cathryn Greville is an EDI specialist with Action Sustainability and heads up the?Fairness, Inclusion & Respect (FIR) Programme?for the Supply Chain Sustainability School, providing an extensive suite of resources and initiatives to drive change and support businesses to address workplace culture challenges. Aimed at building inclusive and respectful environments across the sector, the programme is endorsed by the CLC and CITB and is included in the Industry Skills Plan for the UK Construction Sector 2021-2025.

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