Anti-racist employment strategy - A Fairer Scotland for All

Executive Summary

A Fairer Scotland for All: An Anti-Racist Employment Strategy is a call for action and a guide to address the issues and disadvantage experienced by people from racialised minorities^[2] in the labour market in Scotland. It is a key component in achieving our ambition to become a leading Fair Work Nation by 2025 and in turn an important element in our National Strategy for Economic Transformation with its emphasis on growth, opportunity, productivity, and inclusivity.

The disadvantages and barriers that affect racialised minorities are so entrenched that we need to take an anti-racist approach. This means proactively challenging the systems and processes that create racial inequality in the workforce.

Labour market data shows that:

• The employment rate for the minority ethnic group aged 16 to 64 was estimated at 62.1 per cent in 2021, lower than the rate for the white group (73.9 per cent), resulting in an employment rate gap of 11.7 percentage points (p.p.).
• While this gap is narrower than the gap in each year from 2012 to 2019, it is wider than the gap in 2020 (9.7 p.p.) and also wider than the gap ten years earlier (9.4 p.p. in 2011).^[3]
• Racial inequality affects some racially minoritised groups more than others. Disaggregated data from the 2011 Census showed higher rates of unemployment among African, Gypsy/Traveller, Arab and Caribbean or Black ethnic groups.^[4]

Levels of pay are lower too, with minority ethnic workers earning less on average than white workers, as reflected in the 'ethnicity pay gap'. The ethnicity pay gap represents the difference between the average hourly earnings of white workers and minority ethnic workers as a proportion of white workers average hourly pay. Estimates from the Office for National Statistics show that Scotland's ethnicity pay gap was 10.3% in 2019 and 10.2% in 2018.^[5]

Further, evidence continues to show over-representation of racialised minorities in work that is low paid or precarious in terms of contracts and conditions, while under-representation is seen at senior levels. There is evidence that racially minoritised groups are more likely to be employed on zero hours contracts.^[6] Further evidence comes from the Parker Review report in 2020, which shows that 37% of FTSE 100 companies surveyed (31 out of 83 companies) do not have any ethnic minority representation on their boards.^[7]

Bias in recruitment processes are apparent where a study by the Department of Work and Pensions has shown that 74% more applications needed to be sent from racialised minority applicants in order to generate the same success rate as applicants with a white-sounding name.^[8]

Whilst there are many examples of good practice across employers in Scotland, and these are included as case studies in the appendices, we believe that persistent inequality across the labour market for racialised minorities is a reflection of the existence of institutional racism.

In 2020 the Scottish Parliament Equalities and Human Rights Committee employment inquiry highlighted that there are different levels of understanding of the term institutional racism. Its existence was documented extensively in the Stephen Lawrence Inquiry report.^[9]

The Committee's inquiry report stated that the way an employer interprets or understands institutional racism can have an impact on the experiences and opportunities of racialised minorities in the workplace.^[10] It is therefore important that there is a shared understanding of institutional racism if we are to address it.

Racism, in its different forms, affects and influences how our workplaces operate, the systems and processes that are used and workplace cultures – such as how we recruit, develop and promote staff. It can be experienced as traumatic and have long-term, negative impacts on the mental health and wellbeing of people affected. The disadvantage experienced by racially minoritised people leads to poor outcomes in terms of job and career goals and a loss of opportunity to contribute economically. It is also a loss for employers faced with the increasing challenge of raising productivity and filling skills gaps in a fast changing and wider competitive environment.

The Scottish Government recognises its role in demonstrating leadership in advancing activity to address inequality. Meeting our aim to become a leading Fair Work Nation by 2025 means going beyond minimum statutory employment obligations and looking at what more can be done.

The strategy includes guidance, advice, and examples of good practice for employers and sets an expectation of leadership by the Scottish Government and public sector in line with our wider approach to Fair Work. We want to see positive changes in data such as seeing employment and pay gaps narrowing and evidence showing inequalities being proactively addressed. This will require long-term effort and on-going commitment to diversity and inclusion that is explicit in how racial inequality in the workplace is being addressed.

With this strategy, we want to see a change. A change in workplace culture, where trauma-informed approaches are embedded throughout; a change in our systems – how policies are developed; and a change in attitudes of staff at all levels. We want to see this change through challenging and changing the disadvantage experienced by racialised minorities as well as the multiple barriers that can be associated with other aspects of people's identity such as gender, religion, disability, and age.

The strategy is developed around 4 key areas of focus:

• Knowing your workforce through data
• Action on recruitment and representation
• Driving cultural and attitudinal change
• Fair Work policy context and legislation

There are gaps in data in terms of how racialised minorities are represented in the workforce and their experience of work. This is both at a national and organisational level. Data is a key theme that runs through a number of our actions we intend to take forward for the strategy.

The role of public sector leadership is key in this. The Scottish Government will demonstrate this by monitoring progress against our own Race Recruitment and Retention Action Plan,^[11] and developing and building capability of employers by sharing and learning from effective practice.

Racialised minorities are not a homogenous group. Different racialised minority groups will have different experiences in the workplace. As part of this strategy, we are looking at how we can increase the data and evidence base available to policy makers and employers to help identify and respond better to specific issues.

Through the Public Sector Equality Duty review, we will shape how the reporting requirements under this can be used to drive change. We will also encourage and support local authorities in their work to improve data disclosure on ethnic background. We will also disseminate, and raise awareness among employers, of national data.

There is greater awareness among employers of the benefits to business in having diverse and inclusive workplaces and of having workforces that are representative of the population. For example, Business in the Community's Race at Work 2021 Scorecard Report notes that the number of organisations voluntarily capturing their ethnicity pay gap data has increased from 11% in 2018 to 19% in 2021.^[12]Diversity and inclusion was also a key theme which was identified in responses to the Fair Work Consultation.^[13] Our Fair Work First criteria for organisations seeking public sector grants and contracts will also continue to encourage and support this further.

Ensuring that recruitment, retention and progression overcome the embedded disadvantages and barriers for racialised minorities is a key element in the strategy. Specific actions include:

• Taking account of the review of a community engagement pilot project to inform future policy interventions on recruitment, retention and progression.
• Reviewing and promoting the use of the Scottish Government's Minority Ethnic Recruitment Toolkit.
• Disseminating learning and best practice from the delivery of the Workplace Equality Fund in 22/23-23/24.
• Supporting work within the public sector and to take a targeted approach on the recommendations of the Equalities and Human Rights Committee's inquiry report into race equality, employment and skills. This will include our work to engage with the public sector focussing on different aspects of recruitment and retention practice.

There is a unique role for senior leaders to lead on changing workplace culture and attitudes. In the Scottish Government as part of our own Race Recruitment Retention Action Plan,^[14] we want senior leaders to have confident and anti-racist mindsets to be able to change systems, culture, and attitudes. We recognise that this capability needs to be built and we will facilitate that through engaging with employers on the strategy.

Employers across the economy can use their understanding of institutional racism and how it can affect those who are racially minoritised such as when accessing jobs and trying to stay or progress in jobs or a sector. This understanding will support them to take an anti-racist approach to their policies and practices to ensure that racialised minorities are not disadvantaged or face unintended consequences when accessing, staying in or progressing in employment.

Actions we have to facilitate this:

• Work with partners to establish senior leadership networks across the economy to build capability and understanding of racism and racial inequality and intersectionality.
• Build capability by developing jointly with stakeholders, an intersectional and anti-racist workplace training framework.

Equality law is a matter reserved to the UK Government. However, we will use the levers within our devolved competence to support the implementation of the strategy and deliver the actions within our Fair Work Action Plan.

Through the Scottish Government's review of the Public Sector Equality Duty, we will look to improve the Scottish Specific Duties, which includes extending the existing gender pay gap duty to ethnicity and disability for public bodies.

The new multi-treaty Human Rights Bill to be introduced in this parliamentary session will strengthen legal protections for racialised minorities by making these human rights enforceable domestically and embed human rights culture across Scotland.

Through our Fair Work Action Plan, and as we continue to make the wider case for independence as set out in our Building a New Scotland series,^[15] we will:

• Update the Fair Work First criteria to better reflect priority action required to address labour market inequalities experienced by women, racialised minorities and disabled people, and ensuring people can enter, remain, and progress in jobs.
• Continue to press for the full devolution of employment powers to the Scottish Parliament and push for changes to reserved legislation to advance the Fair Work agenda in Scotland including mandating ethnicity pay gap reporting.

It is of course not enough to provide guidance and support; real impact needs to see delivery and implementation. The strategy sits alongside the refreshed Fair Work Action Plan which sets out actions under the themes of public sector and the role of leadership; expectations of and support for employers; and building the evidence base from an anti-racist perspective to support the implementation of this strategy.

The refreshed Action Plan will be subject to regular monitoring and reporting. The actions from the strategy will be incorporated in to the action plan and will focus on achieving the following outcomes:

• The number of people entering the labour market and staying in and progressing in an organisation is closer to and representative of that organisation's local population.
• The number of employers taking action to remove intersectional barriers in their workplaces has increased. This means more actions to prevent the compounded disadvantage experienced by people with multiple protected characteristics e.g. race, gender, and disability.
• The number of employers proactively creating safe, diverse and inclusive workplaces has increased. This means more safe spaces such as staff networks, where staff do not experience discrimination, bullying or harassment and feel safe and supported to challenge inappropriate behaviour.
• An increase in the number of employers taking evidenced based actions to improve fair work conditions for workers from all backgrounds. This means an increase in the number of employers assessing the impact of policies and processes on recruitment, retention and progression to ensure equal outcomes for all members of staff.

These outcomes will be measured through a measurement framework, which will monitor and evaluate the actions from the strategy and refreshed Fair Work Action Plan.

The strategy and its actions have been informed by the following impact assessments.

• Business and Regulatory Impact Assessment (BRIA)
• Child Rights and Wellbeing Impact Assessment (CRWIA)
• Data Protection Impact Assessment (DPIA)
• Equality Impact Assessment (EQIA)
• Fairer Scotland Duty Assessment (FSDA)
• Islands Communities Impact Assessment (ICIA)
• Strategic Environment Assessment (SEA)

These assessments will be kept under review, with new data analysed and continued stakeholder engagement planned for post publication, to ensure we improve the evidence base for continuous learning and development to monitor the impact of the strategy on workers, employers and wider context in which they operate.