[UK] Charity calls for mandatory ethnicity pay gap reporting to boost economy

A business-community outreach charity has called for the UK prime minister and leader of the opposition party to implement mandatory ethnicity pay gap reporting as a “matter of urgency”, People Management reports.

In an open letter, Business in the Community (BITC) called on Rishi Sunak and Keir Starmer to introduce mandatory ethnicity pay gap reporting for UK employers with more than 250 employees.

Citing figures from the government's 2017 McGregor-Smith review, BITC said that the legislation – which would help to ensure “diverse ethnic talent is fully utilised” – had the potential to give a £24bn boost to the economy. 

Sandra Kerr - race director at BITC - said reporting should be brought forward as a “matter of urgency”, however, she warned that legislating was “only the first step” to closing the pay gap.

BITC research reportedly revealed that less than 3 per cent of all UK workers were employed by companies that publish their ethnicity pay gap. Further research showed that companies would not publish ethnicity pay gap data until 2075 without government action.

The letter comes in the wake of the government’s reversal of a previous commitment to make ethnicity pay gap reporting mandatory in 2022. It reportedly cited “significant obstacles” and fear of placing undue stress on employers during the pandemic as reasons for the U-turn. 

In its policy paper, the government stated that those obstacles included a lack of employer data on ethnicity, a risk of employers focusing on specific ethnicity groups, which can skew results and a lack of consistent diversity across the UK; which will make for less meaningful results.

Commenting on closing the gap, Cheryl Samuels - deputy director of workforce transformation at NHS England - said ethnicity pay gap reporting needed to “emulate” gender gap reporting.

 “There are intersectional aspects that need to be considered, so the depth of inequality and the harmful impacts can be properly understood, which in turn will enable meaningful action to be taken,” Ms Samuels said. She also reportedly cautioned against using homogenous descriptions such as BME and BAME because they “mask the real issues when comparing against white as a category”.

Abi Adamson - founder and EDI director of The Diversity Partnership - said collating data for ethnicity pay gap reporting could be challenging because of the need for voluntary self-disclosure from employees. It was important to recognise that not everyone would be “forthcoming in disclosing their ethnicity”, she said.

“Developing trust is crucial if organisations are to collect accurate data. To do that they need clear communications about why they are asking for the data, how it will be used and where it will be stored and transparency,” Ms Adamson said, adding that the moral argument for ethnicity pay gap reporting was “unquestionable”.

The new call for mandatory reporting follows estimates based on the most recent census data indicating that nearly a third of working-age adults in England and Wales are likely to have ethnic minority backgrounds by 2051.

Using data from the McGregor-Smith review, BITC reportedly estimates that fully utilising this diverse pool of ethnic talent could boost the economy by £36bn by 2051, increasing £12bn since 2017.

Source: People Management

(Links and quotes via original reporting)

A business-community outreach charity has called for the UK prime minister and leader of the opposition party to implement mandatory ethnicity pay gap reporting as a “matter of urgency”, People Management reports.

In an open letter, Business in the Community (BITC) called on Rishi Sunak and Keir Starmer to introduce mandatory ethnicity pay gap reporting for UK employers with more than 250 employees.

Citing figures from the government's 2017 McGregor-Smith review, BITC said that the legislation – which would help to ensure “diverse ethnic talent is fully utilised” – had the potential to give a £24bn boost to the economy. 

Sandra Kerr - race director at BITC - said reporting should be brought forward as a “matter of urgency”, however, she warned that legislating was “only the first step” to closing the pay gap.

BITC research reportedly revealed that less than 3 per cent of all UK workers were employed by companies that publish their ethnicity pay gap. Further research showed that companies would not publish ethnicity pay gap data until 2075 without government action.

The letter comes in the wake of the government’s reversal of a previous commitment to make ethnicity pay gap reporting mandatory in 2022. It reportedly cited “significant obstacles” and fear of placing undue stress on employers during the pandemic as reasons for the U-turn. 

In its policy paper, the government stated that those obstacles included a lack of employer data on ethnicity, a risk of employers focusing on specific ethnicity groups, which can skew results and a lack of consistent diversity across the UK; which will make for less meaningful results.

Commenting on closing the gap, Cheryl Samuels - deputy director of workforce transformation at NHS England - said ethnicity pay gap reporting needed to “emulate” gender gap reporting.

 “There are intersectional aspects that need to be considered, so the depth of inequality and the harmful impacts can be properly understood, which in turn will enable meaningful action to be taken,” Ms Samuels said. She also reportedly cautioned against using homogenous descriptions such as BME and BAME because they “mask the real issues when comparing against white as a category”.

Abi Adamson - founder and EDI director of The Diversity Partnership - said collating data for ethnicity pay gap reporting could be challenging because of the need for voluntary self-disclosure from employees. It was important to recognise that not everyone would be “forthcoming in disclosing their ethnicity”, she said.

“Developing trust is crucial if organisations are to collect accurate data. To do that they need clear communications about why they are asking for the data, how it will be used and where it will be stored and transparency,” Ms Adamson said, adding that the moral argument for ethnicity pay gap reporting was “unquestionable”.

The new call for mandatory reporting follows estimates based on the most recent census data indicating that nearly a third of working-age adults in England and Wales are likely to have ethnic minority backgrounds by 2051.

Using data from the McGregor-Smith review, BITC reportedly estimates that fully utilising this diverse pool of ethnic talent could boost the economy by £36bn by 2051, increasing £12bn since 2017.

Source: People Management

(Links and quotes via original reporting)