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Pay CEOs a bonus to improve diversity, says recruiter

Tue, 17 Jun 2014 | By Paul Nettleton
Barrington-Hibbert,-Michael

Michael Barrington-Hibbert, the former professional footballer with Chelsea and Birmingham City who four years ago set up recruitment firm Barrington-Hibbert Associates, today told recruiter.co.uk he believes there should be a financial incentive for chief executives to improve diversity.

Saying that he did not like the word “quotas”, he suggested that if chief executives were offered a bonus for making their company 15% more diverse, the impact would be far greater than any other measure.

His comments came as a report published today revealed that the number of black, Asian and minority ethnic (BAME) people in top management positions has fallen by more than 21,000 in five years.

‘Race at the Top’ reveals that while the share of BAME people in top jobs increased by 0.5% between 2007 and 2012, in real terms numbers fell from 95,023 to 73,378.

It finds that only one in 16 top management positions and one in 13 management roles is held by BAME people, although one in 10 people in employment are BAME.

The stark report is published by Business in the Community’s race equality campaign, Race for Opportunity, which says the research “shows that no progress is being made on tackling race inequality in management”.

Business in the Community is one of The Prince’s Charities, the group of not-for-profit organisations of which the Prince of Wales is president.

Race-at-the-Top-cover
Race for Opportunity makes three main recommendations to ensure ethnic minorities progress into management positions at the same pace as the general working population.

It is calling for:

  1. A government review into racial barriers in the workplace akin to the Davies review into gender inequality.
  2. Two words – ‘and race’ – to be added to the UK Corporate Governance Code.
  3. Employers in all sectors to do more to attract and retain BAME workers and ensure equal progression.

‘Race at the Top’ includes supporting recommendations such as monitoring, mentoring programmes, board level sponsorship and role models.

For recruiters it recommends that companies define key performance indicators to monitor success in attracting BAME people; make ‘unconscious bias’ training mandatory for staff involved in recruitment; and ask recruitment specialists for diverse shortlists of candidates for senior roles.

Sandra Kerr OBE, Race for Opportunity director at Business in the Community, says: “By 2051, one in five people in the UK will be from an ethnic minority background, representing a scale of consumer spending and political voting power that business and government alike cannot afford to ignore. The gap must not be allowed to widen further, but without action, little will change.”

She added that the government review and amendment to the governance code were needed urgently “to ensure that we don’t pass the point of no return”.

Barrington-Hibbert was brought up in a single-parent family in North-West London and left school with one GCSE. He retired from football at 21 and moved to the US where he gained a degree and worked on Wall Street before returning to the UK.

He said he had experienced “multiple scenarios of unconscious bias” where clients “recruit people like them”. It was easier for a City trader from Canvey Island in Essex to hire a support person who was a member of the same golf club there, rather than someone from Hackney.

Asked about the main recommendations, Barrington-Hibbert, a Reach national role model who was today attending a symposium at Canary Wharf on the report’s findings, said: “We have to start somewhere.”

Reach national role models, as part of Reach Society, aim to guide young black people – with an emphasis on boys because of trends in their academic under-achievement – from education to professional careers.

As with Lord Davies’ report on gender balance in boardrooms, he said, “a line has to be drawn in the sand and we have to put some deliverable targets in place”.

The challenge for employers and executive search firms alike was to recruit outside the social and educational circles of existing top managers. “Sometimes clients need to be a bit flexible in terms of what they are looking for.”

The report shows that three sectors account for 74% of management positions held by BAME people: banking and finance; distribution, hotels and restaurants; and public administration, education and health. White people hold the majority of top jobs in energy and water, construction, legal, media and political sectors – as in 2007.

The fastest growth rate of BAME managers (51%) was in “other services”. This includes small- and medium-sized enterprises and suggests that BAME people are starting their own businesses rather than finding jobs in traditional industries “whether by choice or necessity”.

Among other key findings were: substantial drops in BAME managers across the East Midlands, the North-East, and Yorkshire and Humber; and a drop from 7.2% to 5.5% in ministerial appointments between 2011/12 and 2012/13.

One bright spot is that representation of BAME workers in assistant manager/supervisor positions has increased significantly, from 5.9% to 10.2% between 2004 and 2012. This outweighs their share of the employed population and the report adds: “The hope is that this provides the foundation for further gains in future overall management numbers.”

Paul Cleal, a partner at PwC and Race for Opportunity advisory board member, says: “The current situation is a glaring injustice and a critical business issue because firms need to employ and promote the best people available, regardless of ethnicity. Businesses in multi-ethnic and multicultural Britain need to ensure their workforces are diverse and reflect the demographics of modern society in order to be successful, as well as doing the right thing.”

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