More than a dozen, major UK employers have thrown their weight behind a pledge to push for mandatory ethnicity pay gap (EPG) reporting, it emerged on 1 March. [1]
Brainchild of inclusion specialists INvolve, the pledge aims to garner further support as time goes on, with the current signatories committed to persuading other organisations in their sectors to sign up. The initial 15 firms are the Bank of England, Bupa, Citi, Creative Equals, Deloitte, EY, ITN, Jomas Associates, KPMG, Lloyds of London, Reluctantly Brave, Santander, Sodexo, Stella McCartney and WPP.
At the heart of INvolve’s pledge [2] is a seven-step programme of gathering, reviewing and acting upon any internal data that may highlight the causes of an ethnicity pay gap. Those steps are:
i) Identify the right drivers Establish a case for reporting that will engage senior leaders and the wider business.
ii) Audit your data infrastructure How robust is your existing ethnicity data? How and when is it collected, stored and protected?
iii) Position the initiative Communicate to your people that the EPG is being looked at. Encourage self-ID on the issue.
iv) Analyse & contextualise Build up a picture of the necessary ‘headline stats’, then take a deep dive into the data, unpicking pressure points.
v) Report & respond Convey the findings internally and externally. Talk about any interventions you are undertaking to mitigate the gap.
vi) Qualitative engagement Speak to your people to unpick nuances in the data. Ensure actions undertaken are having the desired impact.
vii) Repeat Run through the same process every, subsequent year, ensuring you provide annual progress updates.
The text of the pledge further notes: “A lack of diverse representation across all levels of a business results in outputs which do not reflect society at large, and businesses are at risk of alienating increasingly diverse populations.
“For any organisation, collecting and analysing this data is as much about understanding your employees and potential pressure points for minority talent as it is about capturing business opportunities and addressing potential injustices.”
It adds: “[EPG data] is not the final word in the state of affairs, but rather an essential mechanism to communicate about wider issues and disparities in the experiences of ethnic minorities in business. Reporting sends a signal that your firm is ready to have difficult conversations and, importantly, take actions to ensure everyone receives equal opportunity and treatment.”
Does the pledge have what it takes to create a broader groundswell of support for mandatory ethnicity pay gap reporting?
The Institute of Leadership & Management head of research, policy and standards Kate Cooper says: “This marks an interesting, new phase of the pay debate. Harriet Harman – who spearheaded the effort towards mandatory gender pay gap reporting – has often talked of the ‘What Abouts’: people who say things like, ‘Oh, you’re reporting on the gender pay gap, but what about ethnicity?’, or ‘What about sexual orientation?’
“But the response to those comments is that, once you start to talk about equality in one demographic context, ALL social groups benefit – because the message you are sending out is an inclusive one. And that doesn’t just mean greater inclusivity for, say, women. The INvolve pledge is evidence of what can happen when that message gathers pace.”
Cooper notes: “Our webinar this week with Diverse Matters founder Yasmin Sheikh will examine how the disabled are one of those underrepresented groups. And when we look at issues around representation, the forward-thinking argument is always that, in order to deliver great products and services, you have to understand your customers.
“You need to have a workforce that is broadly representative of the customers you are trying to serve. You must also evidence a diverse composition of senior teams, which will ensure your organisation will be more innovative – and therefore more profitable and sustainable. So it always comes back to that powerful business case.”
She adds: “My position on gender pay gap reporting is that, although it’s a simple measure – and, in lots of ways, a rather crude one – it starts great conversations. It’s a benchmark for highlighting other areas in which organisations must improve. And that is also the case with the seven-step plan included in the new pledge: let’s measure this discrepancy. Let’s not expend all of our efforts on trying to explain it, or make excuses for it. Let’s just focus on what we’re going to do about it, so we can capitalise on the benefits of having a truly diverse workforce.”
For further insights on the themes raised in this blog, check out the Institute’s resources on appreciating diversity