A majority of pension holders (57%) now “expect companies in their pension to publish ethnicity pay gaps,” while over half look for the companies in their pensions to have diverse boards and senior management according to the results of a new customer survey by the pension provider, PensionBee.
This news follows the government-commissioned report on Race and Ethnic Disparities, also known as the Sewell report, which received criticism for its comments on race and race-related discrimination in the UK.
The report failed to recommend mandatory ethnicity pay gap reporting, despite it existing for gender pay gap reporting, which was made compulsory for large employers in 2017.
However, there seems to be a groundswell of support for making ethnicity pay gap reporting a necessity for organisations. A 2020 petition to make it compulsory gained over 130,000 signatures; in fact, PensionBee’s female respondents (72%), were particularly supportive of ethnicity pay gap reporting.
While PensionBee found that “most consumers” (66%) expect companies to have a level of diversity in their workforce that is representative of UK society,” this sentiment was stronger among women (80%) than men, (60%).
Furthermore, 60% of PensionBee’s savers “expect the companies in their pensions to have diverse boards and senior management teams.” In comparison, 76% of their female respondents and 53% of its male respondents expect “diversity within the companies in their pensions.”
A reason why women in the survey might have been more likely than men to advocate for ethnicity pay gap reporting and workplace diversity from companies in their pensions is that they, like ethnic minorities, are underrepresented in the workplace; the gender pay gap still exists for women, while they have to work longer than men to achieve pension parity at retirement and remain underrepresented in leadership.
However, women now have mandatory pay gap reporting, something ethnic minorities lack; when it comes to income inequalities in the workplace, Pakistani, Bangladeshi, and Black ethnicities are affected most by the ethnicity pay gap compared to their white counterparts.
The fact there are zero Black senior board executives in FTSE 100 companies today shows the extent that ethnic minorities are being left behind in terms of pay disparities compared to white professionals and is ample evidence for why compulsory reporting is necessary to highlight and fix the problem.
In fact, the gender pay gap has closed by one-fifth since reporting has been introduced, according to the London School of Economics, which suggests the same could happen to the ethnicity pay gap.
Romi Savova, Chief Executive Officer, and Executive Sponsor for Race at PensionBee said: “Our research shows that consumers expect companies to address disparities in outcomes for people of different ethnicities.
“Ethnic diversity reporting is rapidly coming up the regulatory agenda to supplement gender reporting in companies with more than 250 employees.
“At PensionBee, we have already started reporting our progress internally. It is on us to create workplaces where everyone can thrive. We must build the kind of companies that consumers want to invest in and the world that our customers expect to live in.”
If businesses respond to pension holders and their growing D&I demands, they’ll not only make their workplaces more equitable, but they might gain more investment from these impact-minded customers.