Large employers should publish a breakdown of their workforce by race and pay band, according to a new government-backed review.
The report by Conservative peer Baroness McGregor-Smith found that if black and minority ethnic (BME) people progressed in the workplace at the same rate as their white counterparts, the UK economy could be boosted by £24bn.
She has suggested large employers lead the way and also nominate a board member to deliver five-year diversity targets.
The review into the issues faced by businesses in developing BME talent covered responses from nearly 500 individuals and companies, including a raft of FTSE 100 firms.
It found that people are still being held back in the workplace "because of the colour of their skin", costing the UK economy the equivalent of 1.3 per cent in GDP a year.
Employment rates for people from BME backgrounds were 12 per cent lower than their white counterparts at 62.8 per cent, with just six per cent reaching top level management positions. They were also more likely to work in lower paid and lower skilled jobs despite being more likely to have a degree, the report said.
Baroness McGregor-Smith said:
The time for talk on race in the workplace is over, it’s time to act. No one should feel unable to reach the top of any organisation because of their race.
If businesses and the government act on my recommendations, it will show everyone from a minority background that Britain’s workplace is for everyone not just the privileged few.
The consequences of continuing to do nothing will be damaging to the economy and to the aspirations of so many. So from the Cabinet table to the board rooms, there is no more time for excuses - just change.
Today, the government has also launched a Business Diversity and Inclusion group that will be chaired by business minister Margot James. The aim will be to bring together business leaders and organisations to develop ways of removing barriers in the workplace and monitoring employees' progress.
James said: “As this report shows, the economic benefit of harnessing untapped talent is huge and I urge employers to implement these recommendations to ensure everyone can reach the top of their career – whatever their background."
Business in the Community will now publish an annual list of the 100 best employers to highlight those who are making good strides.