Australia's biggest employers are failing to elevate Indigenous staff to senior levels, falling short on retention of First Nations recruits and struggling to address racism, a groundbreaking workplace report has revealed.

The Minderoo Foundation-led research released on Tuesday found fewer than one per cent of senior management identified as First Nations among 42 major employers surveyed.

But in a silver lining, researchers also identified two large companies which had far exceeded employment parity, sitting close to 10 per cent Indigenous staff amid a nationwide First Nations population of 3.3 per cent.

Generation One director and Noongar woman Shelley Cable said there were clear differences in the way leading companies were going about Indigenous employment.

"What we found with those particular employees is that they really took a very holistic and systemic view of indigenous employment," she said.

"So they didn't just look at recruitment and attraction and numbers and targets, they really considered the whole employee lifecycle.

"There were so many prongs to their indigenous employment approach and of course, they had the outcomes to back it up as well."

Calls to action out of the report include the transparent setting and reporting on targets, a greater focus on retention and acknowledgement of racism as a safety issue in the workplace.

Governments have also been called on to publish Indigenous employment data and build an Indigenous Community-Controlled employment sector.

Key stats

0.7 per cent: Indigenous representation in senior management

>50 per cent: Indigenous people experiencing racism at work

62 per cent: of employers reporting lower Indigenous retention

2.2 per cent: Indigenous employment rate across surveyed firms

3.3 per cent: Indigenous employment rate required for parity

Of concern was the fact more than 50 per cent of Indigenous people surveyed reported racism in the workplace, with Generation One finding employers had little understanding of racism or how to respond to it.

One person surveyed said racism was experienced every day at their company.

"I work with a lot of older people," the respondent said.

"It is very hard for them to understand what they are saying is racism."

Another said they were fearful for their careers if they spoke up about racism.

While Indigenous employment was showing promising progress at 2.2 per cent, retention data was lacking and what info was available suggested companies were losing proportionally more Indigenous staff.

Ms Cable said employers showed plenty of goodwill and intent, but often lacked knowledge on how to close their own employment gap.

"Industry is well and truly on the way towards indigenous employment parity, but they are not there yet," she said.

"Employers have very strong tendency to focus on attraction and recruitment, which is often driven by by targets and commitment, and they don't focus anywhere near as much on the retention, development and progression of their indigenous staff.

"So we're calling for employers to have a more balanced approach and really consider the employee lifecycle rather than just focusing at the front end of their of their journey."

The research, co-authored by Curtin Bankwest Economics Centre and Murawin, represented some five per cent of Australia's workforce and more than 70 per cent of those interviewed were Indigenous.

Companies surveyed spanned a wide cross-section of industry and included Woolworths, Dominos, Fortescue and several State and Federal government departments.