Objectives  

The Equality and Human Rights Commission (EHRC) looked into barriers to entry and retention of non-white ethnic minority workers in the construction industry, examples of good practice in encouraging ethnic diversity in the industry and the associated benefits.

Inquiry findings and recommendations

Leadership  

There is no single body that takes an industry-wide leadership role and no recognised "industry standards". Both are barriers to a unified industry approach to diversity. As a result, the EHRC proposes identifying and empowering a body responsible for leading industry-recognised best practice standards on diversity.

Monitoring and influencing change  

The EHRC found a lack of widespread understanding in the industry on the importance and effective use of diversity monitoring. This makes it difficult to pinpoint specific problems contributing to the under-representation of non-white ethnic minorities. The EHRC intends to increase understanding in this area and encourage a consistent approach to monitoring.

The scale of public procurement within the industry was also identified as a mechanism for achieving change through the use of social clauses and contractual obligations relating to diversity. The EHRC aims to identify the most effective way of using procurement to bring about change.

Perceptions  

The majority of those responding cited the image of the industry and lack of awareness about the range of opportunities available, particularly among non-white ethnic minorities, as being significant barriers to entry. It was suggested that levels of awareness among non-white ethnic minorities might increase if they had role models within the industry with whom they could identify. The EHRC therefore recommended that industry bodies work together to raise awareness of the industry, suggesting particularly at school and community level.

Training, education and apprenticeships The EHRC recognises the important role of schools and careers advisors in increasing understanding of opportunities within the industry. The inquiry found there was a relatively high proportion of non-white ethnic minority students undertaking construction-related courses but a relatively low number of non-white ethnic minorities actually working in the industry. Word of mouth recruitment was highlighted as a barrier to those without contacts in the industry finding an apprenticeship.

Recommendations include ensuring the industry is involved in providing a well-informed, good quality careers advice and that apprenticeships are highlighted as a path for more non-white ethnic minority people enter the industry. To achieve this, apprenticeships should not be filled through word of mouth.

Recruitment and retention  

As referred to above, the EHRC found the most common method of recruitment was word of mouth, often preventing non-white ethnic minorities from applying simply because they are not aware of them. More open practices must be adopted and the EHRC intends to raise awareness that such methods are likely to be discriminatory and unlawful.

Lack of progression in the industry and negative experiences at work are also barriers to retaining non-white ethnic minorities. Greater understanding is needed of why people leave the industry. Carrying out effective monitoring, including exit interviews, is recommended.

Unlawful race discrimination There are still areas within the industry where unlawful race discrimination exists. For example, the EHRC found a culture of racist "banter" in some areas. Often many employers do not realise that indirect discriminatory practices such as this are unlawful. The EHRC will introduce a strict "discrimination penalty" to deter any firms who knowingly tolerate racism as the current risk of financial or reputational damage was felt to be too insignificant to be a real incentive against discrimination.

Why is diversity important?

Business

Employers in the industry will benefit and remain competitive if they keep pace with demographic changes, which currently suggest that by 2010 only 20% of the workforce will be white, non-disabled men under 45. The proportion of non-white ethnic minorities currently working in the industry is only 3.3%, compared with 7.9% of the total active population. Businesses need to attract the best, most talented candidates for jobs regardless of race: this is not possible if potential employees are put off the industry by the barriers identified by the Inquiry. By not adapting recruitment procedures and breaking down these barriers, employers will lose out on a large section of the employment pool.

And then there is the bottom line. By diversifying the workforce companies will give themselves a competitive edge when tendering for public sector contracts. Given the EHRC's focus on using public procurement to influence change, businesses can remain one step ahead by demonstrating a diverse approach to their workforce.

Corporate Social Responsibility  

The EHRC aims to increase awareness of the industry in schools and communities by offering companies the opportunity to demonstrate corporate social responsibility. This can be achieved by building relationships with schools and the surrounding community, for example by getting involved in the careers advice on offer to highlight the range of opportunities available in the industry.

Legal  

Employers may not be aware of the legal implications of permitting or failing to prevent discriminatory practices, such as word of mouth recruitment or banter in the workplace. Such practices can amount to race discrimination for which employees and workers (including subcontractors) can bring claims in the Employment Tribunal. These claims not only have substantial financial implications, as compensation is uncapped and awards can be made for injury to feelings, but also generate negative publicity.

Next steps  

The next phase of the inquiry will be for the EHRC to examine in greater detail the key issues which have emerged, through engagement with the industry and interested stakeholders. It intends to report on this next phase in January 2010.

Wragge & Co's employment experts provide some action points for employers to consider.