Could ethnicity pay gap reporting help promote equality?

There’s been a lot of news about the widening gender pay gap lately, and we’ve recently published a blog post on how to solve the gender pay gap and another on how to recruit for better balance. Another equality issue that’s just as important is the recruitment and retention of black, Asian and minority ethnic (BAME) employees.

As with the gender pay gap, it’s important to close any BAME pay gap for purely ethical reasons — “It’s the right thing to do” is an incredibly powerful clarion call for change. But doing so will also bring tangible business benefits.

How big is the problem?

The 1976 Race Relations Act aimed to prevent discrimination on the grounds of race in employment, the provision of goods and services, education and public functions. But like the 1975 Sex Discrimination Act and the 2010 Equality Act, it only goes part of the way towards solving the problem.

Discrimination can be difficult to prove on an individual basis, which perhaps explains why legislation alone hasn’t solved the problem entirely, but if we look at BAME employees as a whole, we uncover some uncomfortable truths:

  • While 13% of the UK population identifies as BAME, only 6% of top management positions are held by BAME people
  • A worrying 52% of BAME employees feel they will have to leave their organisation to progress in their careers. This compares to 38% of white British employees
  • Only 11% of UK employers collect BAME pay gap data (source)

The UK government recently carried out a consultation on ethnicity pay reporting. The results are still being analysed, but it seems likely that BAME reporting will follow gender reporting and become mandatory for organisations of a certain size.

Our advice to any business that thinks it might have a problem would be to start collecting data anyway — it will either vindicate your hiring and pay practices or highlight areas where you need to make an improvement.

Collecting and analysing BAME pay gap data

Your first step is to put mechanisms in place to gather information and report on the pay gap. You should be able to replicate the procedures you already have in place to assess the gender pay gap, but you may have gaps in your data — people of all cultural backgrounds sometimes prefer not to have their ethnicity recorded, after all.

To make sure your survey is as accurate as possible, you may have to engage in an employee communication programme to explain what you’re planning to do, and reassure employees over the security of their data.

Strategies and actions to close the gap

You’ll also need to plan what to do when you’ve got the data you need. Ethnicity pay reporting itself won’t address inequality in the workplace, that’s just the first of possibly many steps. Publish your data too soon, without a robust plan to address any inequalities, and you’ll soon have a major employee satisfaction issue on your hands, not to mention damaging external PR.

Some of the steps you can take are similar to those for addressing the gender pay gap:

  • Reminding managers and recruiters that by not selecting enough individuals from ethnic minorities, they are effectively reducing the pool of top talent to choose from — they are not always getting the best person for the job.
  • Educating managers and recruiters on unconscious bias and diversity. Sadly, it’s possible that you will uncover full-on prejudice — if you do, be prepared to take fast, decisive action to deal with it.
  • Considering the use of anonymous CVs with identifying details stripped out.
Here at Connor, we have years of experience helping great companies become brilliant employers. We can help you analyse your pay gap, put diversity training in place and build a more inclusive culture. Why not give us a call on +44 (0)1491 414010 now to see how we can help make your organisation a place where people feel welcomed and valued, regardless of ethnicity, culture, gender, sexuality or disability?

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