Ethnicity pay gap reporting is desperately needed to tackle workplace discrimination; but it can’t be improved if we don’t measure it, reports The Clear Company’s Race Equality Consultant Susan Abumere. It’s time for UK leaders and businesses to support the Ethnicity Pay Gay Day campaign, and hold their organisations to account.
National figures from the Office of National Statistics for 2019 reported an ethnicity pay gap of 2.3% across England and Wales. This figure however differs considerably across regions. For instance, there is a 23.8% ethnicity pay gap in London (the largest); 12.7% in Yorkshire & Humberside; 10.3% in Scotland and 1.4% in Wales (the smallest). This means that on average, workers from systematically excluded and institutionally oppressed ethnic groups earn less than their white colleagues in these regions.
Ethnicity Pay Gap Day (on 8th January) was launched in 2021 by Dianne Greyson as an opportunity to raise awareness of the differentials in pay for Black, Asian and Minority ethnic groups; and to encourage employers and employees alike to pause and reflect on the unfair disparities in pay. The campaign also aims encourage dialogue that will push the government to take action on mandatory reporting of it.
ANALYSING ETHNIC MINORITY PAY GAPS
Consequently, a lot of workplace debates have and are taking place about this topic; and the much-awaited debate was held in the House of Commons to introduce mandatory ethnicity pay gap reporting. This debate captured some of the arguments against or key challenges for ethnicity pay gap reporting; and disappointingly concluded that measuring ethnic minority pay gaps is complex compared with gender pay reporting.
Some of the challenges included complexities with ethnicity data collection. Organisations fear low disclosure rates as reporting ethnicity data is entirely voluntary and anonymous, regional differences in distribution of ethnic groups across the UK as well as may affect reported figures. You can read the transcript of the debate here.
According to a recent PwC survey, 67% of 100 large UK businesses surveyed representing approximately one million employees now collect ethnicity data; and 23% of respondents are also calculating their ethnicity pay gap. This is a good step; however, a number of organisations still do not collect ethnicity data or are collecting it wrongly.
It is important to remember that the ethnicity pay gap remains a key indicator of DE&I progress. Collecting and measuring meaningful data provides an opportunity for businesses to understand their workforce better; and, to analyse the specific underlying causes of inequality for employees of minoritised ethnicities. Simply put, what is not measured cannot be improved.
ADDRESSING DATA COLLECTION CHALLENGES
Last year, we shared a number of actions businesses can take to make a start on voluntary reporting; which largely revolves around collecting and understanding diversity or demographic data.
Addressing some of the data collection challenges to ethnicity pay-gap reporting, include:
- Identify the business areas with low response rates.
- Create an aligned internal communications plan: How and why data is being collected? Where it will be held? How it will be used?
- Make data collection ‘business-as-usual’ via: Moments in standard processes (e.g. recruitment); and Special communication issues to add reminders.
- Collaborate with employee networks where they exist.
- Role-modelling by senior executives is an important engagement tool.
ETHNICITY PAY GAP REPORTING GUIDELINES
In absence of legislative backing and clear government guidelines, the CIPD has recommended organisations voluntarily compile and publish annual ethnicity pay reports based on the following key components. They include:
- A uniform set of eight commonly defined statistics to profile pay by ethnicity.
- A supporting narrative to explain the nature and causation of any pay differentials; and gaps by ethnic group evident in their statistics.
- An action plan of initiatives defined to reduce and remove any such gaps over time.
In conclusion, ethnicity pay reporting is much needed to tackle discrimination in the workplace and a lot of work still needs to be done to address this. This will involve senior leaders and businesses supporting the campaign and holding their organisations to account. While there is no mandatory requirement yet to publish information on ethnicity pay gap, #ethnicitypaygap day reminds us of the reasons to keep the momentum going; and urge all businesses to start taking the right steps to towards this; including reporting now instead of waiting for it to be legislated.
For more information about the upcoming Ethnicity Pay Gap Day, click here.
MORE ABOUT THE AUTHOR
Susan Abumere is a Race Equality Expert with experience in using solution-focused approaches to selection and assessment; leading on research projects with clients in the private and public sectors. She most recently conducted a Race Equality audit for a global agricultural business. Abumere is particularly passionate about promoting cultural intelligence in the workplace and helping organisations to attract talent across difference. She is currently undertaking doctoral research into how multinationals and global organisations can adapt their diversity and inclusion initiatives to fit different cultural contexts at Alliance Manchester Business School.
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