This blog post was produced for inclusion in the Birmingham Economic Review for 2021.
The annual Birmingham Economic Review is produced by City-REDI, University of Birmingham’s and the Greater Birmingham Chambers of Commerce. It is an in-depth exploration of the economy of England’s second city and a high-quality resource for informing research, policy and investment decisions.
This post is featured in Chapter 3 of the Birmingham Economic Review for 2021, on the city’s labour market and current and future challenges
Click here to read the Review.
The success of, and then racist abuse suffered by, members of the England national team at the 2020 European football championships brought issues of talent, diversity and inclusion to the fore. Evidence shows how the Covid-19 pandemic has exacerbated existing inequalities. However, it also emphasises the benefits of inclusive workplaces and offers insights for employers in terms of how to promote the diversity of their workforce and maximise talent.
Racial inequalities have existed within the UK labour market for decades. Currently, people from Black, Asian, and Minority Ethnic (BAME) groups are more than twice as likely as white people to be unemployed. Unemployment also rose particularly fast among BAME groups during the pandemic. At the end of 2020, the CBI warned that without action, the economic downturn risked stalling or even reversing progress on diversity and inclusion. Young people and women represent the majority of employees in sectors most affected by the pandemic. Mothers and women from ethnic minority groups have been particularly impacted by the pandemic with nearly half of mothers who were made redundant during the pandemic citing a lack of adequate childcare as the cause. There is also evidence that Covid-19 has increased challenges for disabled workers. As a city with a large ethnic minority (according to the Annual Population Survey, in 2019 43% of Birmingham’s population aged 16 and over were from ethnic minorities) and a comparatively young population, addressing racial and gender inequalities is especially important for Birmingham.
Diversity benefits teams and promotes innovation. Cross-comparative international research has shown how companies that are more diverse perform better financially. Recruiting the best candidates is especially important in SMEs since their more limited staff numbers means that underperforming employees “are much more visible in and prejudicial to SMEs than large companies”. Inequality is concentrated amongst certain groups but talent is spread across all groups. If firms fail to embrace diversity, they will miss out. For example, the government-backed McGregor Smith Review of Race in the Workplace estimated that if BAME individuals are fully utilised across the labour market as a result of improved participation and progression, the economy could benefit from a £24 billion boost.
Covid-19 poses particular challenges both immediate and medium-term for diversity and inclusion that firms need to address. In the short term, these relate to vaccine hesitancy among particular groups of employees such as the young, women, and those in some ethnic groups. It is important that firms listen to concerns among employees regarding vaccines and attempt to provide reassurance as part of plans to enable workers to feel safe to return to the workplace. In the medium-term, long-Covid, although not fully yet fully understood, may pose particular problems in relation to mental health as well as general health. This underlines the importance of employer awareness of the symptoms and the need to have systems in place to support employees.
Another clear message emerging from the evidence is that flexible work arrangements can support workplace inclusion by better enabling individuals to balance work and family responsibilities. Emerging from the pandemic, employers need to consider how the benefits of the rise in homeworking experienced over the last 18 months can be best balanced with other workplace demands. An Evidence Review by the Chartered Institute of Personnel and Development (CIPD) found that job satisfaction, among women, in particular, was higher in organisations, which offered flexible working, irrespective of if they chose to work flexibly.
It is important though that employers spend time to ensure that their organisational policies and management practices have been reviewed to take account of new ways of working. Developing new approaches to leadership and management that maximise the benefits of hybrid working and temper the risks that teams become disconnected as a result is essential. Training staff in how to manage employees remotely should be an important focus. Business Improvement Districts in Birmingham could facilitate cross-organisational sharing of good practice in relation to improving managerial quality and fostering a broader institutional culture, which champions training. It is vital such initiatives are actively led from the top of organisations. The Chamber of Commerce has a key role to play in supporting all of its members to maximise the benefits in terms of growth and profits from diversity and inclusivity.
This blog was written by Dr Abigail Taylor and Professor Anne Green, University of Birmingham.
The views expressed in this analysis post are those of the authors and not necessarily those of City-REDI / WMREDI or the University of Birmingham.