Closing the ethnicity pay gap would contribute an extra £24 billion to the economy per year, and as the UK falls into a recession – it’s needed.
The Government responded to a petition to introduce mandatory ethnicity pay gap reporting earlier this year, saying that: “The Government ran a consultation from October 2018 to January 2019 on the introduction of mandatory Ethnicity Pay Reporting. We are currently analysing these and will respond by the end of the year”.
However, as we reach the end of the year, the Government has failed to introduce mandatory ethnicity pay gap reporting. So, how should businesses report on the ethnicity pay gap when there is no framework to do so?
Gapsquare has released an eBook titled Getting started with ethnicity pay gap analysis detailing exactly why, and how, businesses should report on the issue. It also guides how to help your Black, Asian and Minority Ethnic (BAME) colleagues with the downloadable guide Supporting people of colour at work.
Getting started with ethnicity pay gap analysis
According to the Office for National Statistics (ONS) figures from earlier this year, white ethnicities are being paid 21.7% more than their BAME colleagues.
Gapsquare responded by opening its eBook with: “The time to act is now. Improving representation for people of colour at work, fostering an inclusive environment, and measuring and ending ethnicity pay gaps are essential to building a fairer world of work. This paper sets out how to improve disclosure rates, the data you need to collect, and the next steps to ethnicity pay gap analysis.”
They recommend these steps to collecting ethnicity pay gap data:
- Clear communication – Be specific about what data you want to use and how you are going to use it
- Widespread communication – Use the staff intranet, internal newsletters, staff network groups, trade unions, and any other vehicles of staff engagement to get the message across.
- A continuous approach – Collect ethnicity data quarterly and whenever you take on new recruits to drive up response rates and a culture of transparency.
- Anonymity of process and systems – Ensure you have clear processes in place for data collection, including who has access to the data and how it is kept anonymous. Make these processes accessible and communicate them with employees whenever collecting data
- Self-identification and company values – Talk about how important self-identification is, celebrate diversity and foster an environment of inclusion within your organisation in order to create a culture where employees feel more comfortable disclosing this information.
- Broad data collection – Don’t assume that in seeking to collect data you will only be targeting those staff who are not perceived as visibly White. Collecting the data from White staff is equally important to understand the distribution of this group across the White British, White Irish and White Other groups.
Once you have the data, Gapsquare recommends calculating the pay gap by the mean figures, and by comparing each ethnicity to the white ethnic category.
Supporting people of colour at work
Gapsquare’s downloadable guide also lists steps to take when tackling the issue – from refining your recruitment processes to improving data collection and disclosure rates. The guide analyses UK organisations who published their ethnicity pay gap to look at what they did, and what other organisations can do.
A case study in the report looked at KPMG’ s public Pay Gap Report 2019, which lists diversity targets for 2022. The targets aim for improved representation for BAME employees at partner, director and senior manager level, and LGBT+, female and employees with disabilities in the company overall.
Having a more diverse senior team is key as board decisions can be analysed from a BAME perspective. Also, publishing ethnicity data holds the company accountable and improves employee trust in the company, making employees more comfortable in sharing their data.
Creating awareness of issues surrounding diversity also helps in tackling the ethnicity pay gap, says Gapsquare. When looking at Network Rails’ Race Matters project, Gapsquare found that having a BAME advisory council improved inclusion.
Ensuring that executive-level decision-making includes all employees will improve company culture and encourage the structural change needed to tackle the issue.
In case your organisation needs extra support, both the eBook and guide are available for free online, and experts are ready to help at hello@gapsquare.com.
