Companies are realising that diversity in the workplace is a commercial imperative

Three years of hard work are over for the hundreds of thousands of students who graduated this summer. Armed with their degrees, the scramble for jobs is in full swing. But some graduates face an additional hurdle to the usual competition: the colour of their skin.

Three years of hard work are over for the hundreds of thousands of students who graduated this summer. Armed with their degrees, the scramble for jobs is in full swing. But some graduates face an additional hurdle to the usual competition: the colour of their skin.

A number of studies suggest that black and Asian graduates can have a particularly tough time in finding work. One of the latest, from the Department for Education and Skills (DfES), found they are more likely to progress to higher education, yet face more problems getting jobs. Professor Tariq Modood, one of the report's authors, concluded that the possession of a degree for ethnic minorities is still not converting into an appropriate share of prized jobs.

Although discrimination partly explains the discrepancy between employment rates for black and white graduates, it is not the whole story. The DfES report reveals that while one in six graduates is now from an ethnic minority, they are less likely on average to do as well in degree performance as their white counterparts. In addition, the report found they are less likely to go to the universities, and study the courses, that are traditionally considered the most prestigious. It also found that all too often, the highly selective recruitment processes of many large organisations are to blame.

The Commission for Racial Equality (CRE) adds that in many cases white graduates have contacts through their parents, whereas ethnic minorities are less likely to have such inroads into their chosen career. Meanwhile, many ethnic minorities are the first generation of their families to go to university and may not be aware of how best to apply for jobs or the importance of work placements and internships.

Few organisations are more aware of such issues than the Association of Graduate Careers Advisory Services (AGCAS) and the Association of Graduate Recruiters (AGR). Patrick Johnson, who chairs the organisations' joint race equality working group, says: "We are helping more and more organisations to overcome the problem, and the good news is that they are learning not just from us, but from each other. For example, many employers are finding out from others about how best to implement work experience programmes specifically for ethnic minorities. The financial sector, as well as the public sector, has been particularly proactive."

There is a clear business case for improving ethnic diversity in graduate recruitment - something that a growing number of employers are recognising, he explains. Above all, it allows companies to tap into a wider talent pool. Ethnic minorities make up 8 per cent of the UK population and by 2009 they will account for half the growth in the working age population. Diversity at graduate level also leads to customers' needs being better catered for. Lloyds TSB is just one organisation whose diversity programme has seen both customer service and sales improve.

"Globalisation is relevant too," says Sandra Kerr, national director for Race for Opportunity (RfO). "Many companies in other countries will no longer even come to the table unless they know they'll be dealing with a diverse team."

In fact, reveals RfO, a staggering 78 per cent of organisations now have a clear business case for race - more than double the figure for 2001. Moreover, 43 per cent are already reporting a measurable impact on their bottom line and 65 per cent say that their work on diversity is good for brand reputation. "Business leaders who fail to recognise the business case for racial diversity are likely to suffer commercially and in terms of bad reputation," says Kerr, who adds that the public sector has an official duty to focus on ethnic diversity in recruitment.

One of the ways that graduate employers are achieving this is through working exclusively with recruitment agencies that produce diversity shortlists, says Kerr. "The second thing that is becoming common practice is training in cultural awareness for all staff involved in graduate recruitment."

Some employers are also targeting specific universities and courses with high proportions of ethnic minorities. "This involves organisations going to do presentations to students about their commitment to diversity, and has been shown to have a clear impact on applications," she says.

Kerr also points to the growth in internship programmes specifically for ethnic minorities. "This works well because it gives participants a better positioning when they apply for a job," she says.

RfO agrees that financial employers are currently leading the way - both in the public and private sectors. Indeed, an initiative to tackle the under-representation of ethnic minorities in the local government finance sector has been hailed a success, with almost half the new recruits coming from ethnic minorities. Rob Whiteman, executive director for resources at Lewisham Borough Council, says: "We set out to attract graduates to work in public finance departments across London, with a specific focus on recruiting graduates from ethnic minorities. We are very pleased to have met our objectives."

Meanwhile, in the private sector, Lloyds TSB is a top performer. "Among the most effective changes the bank has made since the late Nineties has been working specifically with ethnic minority graduates and their families to show them that banking is a worthwhile career. We have also made the imagery of our literature far more inclusive and made links with newer universities, where there are higher proportions of ethnic minorities, rather than just concentrating on the traditional ones," explains Andrew Wakelin, senior manager, equality and diversity.

Legal firms are rising to the challenge too, according to RfO. Consider Linklaters and The Sutton Trust, who earlier this year announced their three-year sponsorship deal of the Global Graduates "Young Graduates for Lawyers" scheme. This unique programme encourages talented A-level students from a variety of non-traditional backgrounds to realise their ambitions of pursuing a career in law. Yolande Beckles, managing director of Global Graduates, explains that improving diversity at graduate level in law necessitates targeting people at a much earlier age.

"Part of the problem has been the inadequacies of expert support and advice at an early age that enables them to acquire the knowledge, hone the skills and build the character so that they can reach their goals," she explains. "Global Graduates looks forward to ensuring that through the 'Young Graduates for Lawyers' scheme, a more diverse pool of talented young people reach the legal heights."

Professional services firms are also gaining an improving reputation in employing more black and Asian graduates, with companies such as PricewaterhouseCoopers taking the attitude that graduates are its future leaders. Its initiatives, specifically developed for minority ethnic students, include hosting seminars, providing mentors and offering work shadowing opportunities and careers guidance. The aim is that students can develop skills that put them at an advantage in the graduate marketplace.

Among employers who have been criticised for their poor record on race in employment in recent years is the NHS. But even this graduate employer is increasingly pulling its socks up, with plans to fast-track black and Asian high-flyers into senior positions to counter a white bias at the top levels of the service. The British Medical Association welcomes the move, having spoken out for years about the NHS promoting people on the basis of "who they know as much as what they know".

Wilma Martinellie, director of the centre for career and skills development at City University, is quick to point out that a number of sectors and employers still have a long way to go. "That's why a lot of universities like us are building links with employers, constantly trying to educate them and promoting mentoring schemes," she says. "In fact, our mentoring scheme, which links junior or senior managers in industry with second year students, has been very successful."

In addition, ethnic minorities can help themselves by approaching their university careers service and contacting organisations such as the National Mentoring Consortium and The Windsor Fellowship. These link ethnic minority graduates to a range of employers in a number of ways including mentoring, work experience and sponsorship.

Careers fairs specifically aimed at ethnic minorities can also be invaluable. Denise Blake, who organises The University of Manchester's Ethnic Diversity Fair, says: "This is our fourth year of the fair, which is focused on opportunities all over the UK and internationally. It's an important event because it enables organisations to address the issue of diversity at graduate employment level as so much more than a tick box exercise. It also allows them to be seen as an employer of choice to ethnic minority graduates. For graduates, there is the opportunity to really quiz organisations about their diversity policies."

'I came away feeling valued'

This March, 90 ethnic minority university students descended on London for a day-long event designed to open their eyes to careers in professional services. "BIG 4 Chances - ethnic minorities into professional services" was hosted by the Big Four firms: Deloitte, Ernst & Young, KPMG and Pricewaterhouse- Coopers.

An industry first, BIG 4 Chances was part of a drive to promote diversity within professional services. Case study-based activities, a discussion panel and networking session allowed students to learn more about job opportunities in the sector from senior figures and recent graduates. The event was a great success, with students and firms feeling that they benefited from the direct contact the day allowed.

"The quality and diversity of the students who attended exceeded both our own and the sponsors' expectations," says Mark Blythe, joint managing director of graduate careers publishers GTI, which organises a range of Capital Chances events aimed exclusively at ethnic minorities, women or people with disabilities.

The other two sectors which offer events aimed at ethnic minorities are city law firms and investment banking. "Unlike the professional services event, these have been going for many years and we now have a massive alumni of past students," he says.

Students tend to be at various stages of their degree, and while 50 or 60 per cent say they are considering entering the particular sector in question before the event, that number reaches 90 to 95 per cent afterwards. Most keep in touch with the sponsoring companies.

Deborah Dalgleish of Freshfields Bruckhaus Deringer, one of the sponsors of the Legal Chances event, says: "We find ethnic minority graduates often don't apply to us because they are put off by what they perceive to be a male, public school, Oxbridge organisation. This event is therefore helpful in allowing us to show that we are a diverse establishment and if someone can do the job, we want to recruit them. The event is also useful because we are sensitive to the fact that in some sections of society access to education and opportunities are limited."

Kunal Mehta, a student at Loughborough University, attended the investment banking Capital Chances event last year. He says: "Capital Chances came at precisely the right time - my first year of university. It was a two-day event and I learnt a huge amount from it - not just on the sector itself, but also about employers' attitudes to diversity. What I particularly liked was the fact that the existence of prejudice wasn't denied. Rather, we learnt what employers are doing to overcome it and how we could help ourselves. I came away feeling valued and even more keen to work in the City when I graduate."