Increase in BAME self employment represents a business imperative for supply chain diversity

Does employer procurement action need spotlighting to sustain the increase of Black, Asian and Minority Ethnic People into self-employment?  Sandra Kerr OBE, Business in the Community Race Equality Director writes of her interest in todays data from the ONS on the increase in BAME self employment. 

 

Today the Office for National Statistics has published its latest data on BAME (Black, Asian and Minority Ethnic) employment. One statistic that particularly caught my eye was that BAME self-employment has gone up by 23,000 between January and March 2016, with the biggest increased in the Mixed (13,000), Bangladeshi (6,000) and Chinese (3,000) groups.

The Government’s most recent Small Business Survey (2014) showed there had been no increase in the percentage of BAME-owned small and medium-sized enterprises (SMEs) from 2012 – the figure remained at 7%. The number of BAME-owned SMEs that are less than a year old has declined – just 9% in 2014, compared to 16% in 2010. This suggests that more BAME businesses are not being created. So what is actually happening? As the ONS definition of self-employment includes aspects such as freelancing and contract work, it may be that BAME people are choosing to move into these areas rather than starting their own businesses.

Business in the Community’s ‘BAME Women and Enterprise’ factsheet also shows that, in 2012, many BAME-owned businesses were concentrated in particular sectors. For example, 10% of BAME-owned SMEs are in transport, retail and distribution, compared to only 2% in construction.

That said, there is still a need for BAME self-employment to be sustainable. Although the fact the percentage of BAME-owned SMEs has remained consistent suggests established businesses are able to keep going, they also need support from larger employers, such as through supply chain diversity.

One of the five recommendations for government from our ‘Race at Work’ report asks for the reintroduction of the Government procurement approach introduced in 2012 for those who wanted to win Olympic contracts. They needed to demonstrate their commitment to race equality by recruiting diverse talent and demonstrate action on how they were engaging with and supporting diverse suppliers. We would encourage other organisations to have a dedicated manager in their procurement teams or someone with performance objectives to ensure the organisation is reaching out and engaging diverse suppliers. We also recommend a leader at the top table within the business ensures that this happens. Employers should also look at the demographics of their local area when choosing suppliers and engaging with small businesses to reflect the diversity of the local population in the same way they should consider the diversity of the talent pool when they are recruiting.

Sandra Kerr OBE