CBI urges UK firms to voluntarily reveal ethnicity pay gaps

Today, the CBI has urged companies with more than 250 employees to voluntarily publish their ethnicity pay gap data, in the same format as they already do for gender. The UK’s most influential business organisation urges firms not to wait for the Government to make ethnicity pay gap reporting mandatory, and provides practical guidance on how to close their gaps.

“Closing the UK’s ethnicity pay gap is about making our society fairer and overcoming inequality at work. Not only is it the right thing to do: the business case is watertight. Diverse companies are better companies,” states CBI’s Chief UK Policy Director, Matthew Fell. “Firms already know that embracing a wide range of talent represents a real competitive advantage. Which is why they should not be waiting to act until legislation is introduced by Government.”

According to CBI data, race equality across the UK labour market would boost the economy by £24 billion per year (1.3% of UK GDP). Embracing a wide range of talent is not just a matter of equality, it represents “a real source of competitive advantage”, confirms the CBI.

GUIDANCE TO CLOSE GAPS

With the Parker and McGregor-Smith reviews underlining slow company progress to date, businesses “must take urgent action to understand, report and close their ethnicity pay gaps”, stresses the CBI. To help companies voluntarily publish their ethnicity pay gap data and close the gaps, the CBI has created a new guide in collaboration with Eversheds Sutherland, entitled Bridge the Gap. 

Given there’s no one-size-fits-all approach to closing the ethnicity pay gap at work, Bridge the Gap recommends three areas where companies should focus their efforts:

1. Building inclusive company cultures where all employees feel confident to disclose their ethnicity.
2. Leading from the top to champion race equality across organisations and improving how they attract, hire and promote BAME employees.
3. Encouraging open, inclusive conversations about race at work.

MEANINGFUL ACTION

Those firms that are already reporting their ethnicity pay gap understand what “long-term, meaningful action they need to take to tackle race inequality at work”, notes Fell. “They are leading from the front – improving how they attract, hire and promote employees from ethnic minority backgrounds.”

However, there is so much more that companies can and should be doing, according to Fell. “Firms have to get better at speaking about race at work; developing campaigns to encourage employees to share their ethnicity; and creating strategies to improve BAME representation all the way up to the boardroom,” he explains.

A FORCE FOR GOOD

Fell believes that business can be a real force for good. But to build a fairer society, businesses “need to take action now”, he advises. “The CBI is committed to help companies learn from each other and make progress – until UK business is truly representative of the society it serves.”

Adding to his comments, Naeema Choudry, Partner and Equality Expert, Eversheds Sutherland, states: “It is imperative for businesses to create the right environment for career advancement and development for all their employees, whatever their ethnicity. Ethnicity pay gap reporting is a key step in ensuring such progression, as it enables businesses to understand any ethnicity pay gaps that may exist and then to carefully consider what practical steps need to be taken to close them.

“The guide provides plenty of advice to organisations that are unsure of where to begin and much needed clarity on the support that’s available.”