It is highly likely that ethnicity pay gap reporting is not far off. But many employers are just not ready.
Earlier this year, research revealed young people with BAME backgrounds were 47% more likely to work zero-hours contracts than their white counterparts, 10% more likely to hold a second job, and 5% more likely to do shift work (Carnegie UK Trust).
This points to something fundamentally wrong and a waste of talent, energy, enthusiasm and expertise.
One of the five calls to action in the BITC Race at Work Charter is to capture ethnicity data and publicise progress.
Hot on the heels of gender pay reporting, ethnicity pay reporting for companies with 250+ employees has been in the agenda for some time. Government consultation on the topic closed in January 2019, but the outcome is yet to be published.
Although the government suspended gender pay gap reporting for 2019/20 due to the pandemic (meaning only half of employers published), the support for the Black Lives Matter movement over the past couple of weeks has shone the spotlight back on ethnicity pay reporting.
A petition urging the introduction of ethnicity pay gap reporting has achieved over 100,000 signatures meaning it will now be debated in Parliament. Rightly so, this is not going away and we’ve all had time to prepare. Yet BITC report that just 11% of UK employers are actively capturing ethnicity pay data.
A lack of ethnicity data will make calculations unreliable at best, impossible at worse.
So, what can we do to ensure we have the required data ready?
- Update HR systems to capture the data – this means clear categories, and ease of access
- Integrate disclosure into the recruitment/new joiner process - by far the easiest touch point to collect diversity data
- Encourage existing employees to disclose ethnicity – carefully explain how it will be handled and used, thank those who provide it, and understand and act on the concerns of those who don’t
- Regularly analyse and openly share progress – sharing how many employees have disclosed will encourage others to do the same
- Once you’ve got sufficient data, do your own analysis. Don’t wait for 100% disclosure or for the government guidelines. Show how the results are being used to positive effect with clear actions and honest progress updates
Yes, you might have to make some changes when the guidelines are published, but it’s better to take positive action as soon as you can.
Ethnicity pay reporting will happen, it’s just a matter of when. Don’t under-estimate the time and effort that may be involved in getting the systems and communications in place to make it happen well.
At Verditer we make pay and reward more effective. Do get in touch if you need our support with gender or ethnicity pay reporting, or calculating CEO pay ratios. To be the first to read our blogs; follow our Linkedin company page and sign up for our newsletter.
Image: courtesy of JD Hancock