Closing the ethnicity participation and pay gaps could add £37 billion a year to the UK economy, according to new analysis.
The findings, published by Business in the Community (BITC) in collaboration with the University of Dundee, show that tackling racial inequality isn’t just a moral imperative – it’s a major economic opportunity, with potential to inject £712 million every week into the UK’s GDP. The research comes as BITC marks 30 years of its Race Equality campaign, a pioneering initiative launched in 1995 with support from UK business leaders and the then Prince of Wales.
The new figures are detailed in BITC’s latest report, Then, Now, Next: 30 Years of Action and Impact, which celebrates three decades of progress and sets out the next chapter for racial equality in UK workplaces.
GROWING ECONOMIC CASE FOR EQUALITY
The £37 billion estimate builds on findings from Race in the Workplace: The McGregor-Smith Review (2016), which calculated a £24 billion annual benefit at the time. The new analysis shows that, despite awareness and progress, the ethnicity pay and participation gaps have not yet closed. And the cost to the economy has grown.
Professor Ian Thomson from the University of Dundee, who led the analysis, said: “Using a similar methodology to the 2016 McGregor-Smith Review, we calculated the total value that addressing racial inequalities can bring. Sadly, things have worsened overall since 2016. The case for action has never been stronger. We know what needs to be done, and there is real urgency to act now.”
KEY FINDINGS
Insights from BITC’s Race at Work 2025 survey reveal that while some progress has been made, significant gaps remain. Key findings from the survey shows that:
- Only half of UK employees say their employer encourages them to use their skills to support young people.
- Just 35% of organisations have formal work experience programmes, and 42% offer apprenticeships.
- Six in ten large employers now have a senior sponsor for fairness and equality.
- Half of ethnically diverse employees feel they must leave their organisation to progress, compared with four in ten White employees.
- The number of employees who feel comfortable talking about race at work has dropped: from 40% in 2021 to 33% in 2025.
- Only four in ten organisations have made public commitments to deliver social value through procurement and supply chains.
TIME FOR ACTION
To accelerate progress, BITC is refreshing its Race at Work Charter, inviting organisations to commit to seven new actions. These include:
- Supporting young people into quality jobs and enterprise, through initiatives like BITC’s Talent Unlocked programme (with Youth Futures Foundation).
- Moving from “allyship to solidarity” to drive lasting inclusion.
- Voluntarily collecting and publishing ethnicity data. This will soon become mandatory under the Government’s Equality (Race and Disability) Bill.
RACIAL INCLUSION DRIVES ECONOMIC GROWTH
“The past 30 years have seen great change, but we must keep the momentum going. Race inclusion remains a priority for many businesses, and closing the ethnicity gap will benefit not just individuals, but the UK economy as a whole,” shared Sandra Kerr CBE, Race Equality Director at BITC. “We want every employee to feel valued, respected, and able to bring their whole self to work.”
Richard Iferenta, Partner and Vice Chair at KPMG and Chair of BITC’s Race Equality Leadership Team, added: “We’ve made progress. But the journey is far from over. The next stage demands bold collaboration between government, employers, and industry leaders. Together, we can move from insight to real impact and deliver the change our economy – and our communities – deserve.”
As BITC celebrates three decades of its Race Equality campaign, this new research is a powerful reminder that racial inclusion drives economic growth. Closing the ethnicity gap isn’t just good for people – it’s good for business, for innovation, and for the future of the UK economy.
Download the full report here.
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