Ethnicity pay gap reporting - Gapsquare's 5 things you need to know ahead of the regulations
“The colour of your skin should have no bearing on what you can achieve... understanding the scale of this inequality is the first step in tackling it"- Sadiq Khan, London Mayor
It's 2019 and companies have survived their third year of gender pay gap reporting and whilst reporting the pay gap has not been without its problems, the world has already changed a great deal since the UK regulations were released.
We are seeing that employers now understand, talk about and engage with gender equality. The pay gap is increasingly talked about in the boardroom and bringing up the gap is not met with confusion these days as often as it is with a determination to do much more. Another thing that emerged as a result of the regulations was that the conversation began to turn to ethnicity pay.
Companies large and small are looking to lead on inclusive diversity practices & the possibility of EPG regulations coming into effect soon have increased the sense of urgency around this. But how can you get started? Take a look at our 5 top tips based on our recent ethnicity pay gap report.
1 - Don't underestimate the task
The great thing about gender pay gap reporting was that it required A) data most companies have about their employees and B) a single comparison between binary factors (Male, Female) but things aren't so simple with ethnicity pay reporting: 'many organisations either have not collected or have low levels of data on the ethnicity of employees' argues the report, so now is the time to start recording this data, and the report suggests some useful ways to get started.
The report also argues that 'it would be highly inadequate to limit ethnicity pay gap reporting to a binary option, i.e. BAME earnings as a percentage of White earnings'. Read more to find out why.
2 - Know the causes, turn them into an action plan
At Gapsquare we are strong advocates of communicating well when it comes to publishing equalities data and ethnicity pay reporting will be no different. In fact, it might be the case that the need is even greater with reporting the ethnicity pay gap.
There are a number of subtleties, outlined in Ethnicity Pay Gap Reporting: Are You Prepared?, that could cause a lot of harm in terms of public and internal relations which can be mitigated with an excellent understanding of the data and a communications and reporting approach that is clear is so essential. Having incredible data insights is no good if employees aren't sure how to interpret these.
Ethnicity Pay Reporting argues that action plans and great communication is essential: "This paper firmly believes there should be a requirement for an action plan. This would give employers an opportunity to confirm their commitment to addressing the causes of pay disparity, establish measurements for year on year monitoring and to demonstrate to their employees and customers alike, that equality, diversity and inclusion are important.
3 - Keep your eye on gender, it (still) matters
So, now that we've started to really talk about the ethnicity pay gap, we can sideline the issue of gender, right? Wrong. For those of you who have experience deep-diving into pay data, you will know that there are a range of influences and cross-overs in experiences of disadvantage and that we can't look at ethnicity without breaking it down by other factors.
This report covers the need to look at ethnicity pay broken down by gender: "It would not be unusual to find that the pay gap of women from a particular ethnic group is lower than that of males in the same ethnic group when compared to the white comparators." Not only could this reveal a great deal about the experiences of BME men and women in your workplaces, it could make you look differently at your ethnicity pay gap - the more you know about your data, the more intelligently you can tackle workplace inequality.
4 - Location changes the picture - deep dive and build context
"Under the gender pay gap reporting regime many organisations compared their gender pay gap to the national and regional picture using the data derived from the Annual Survey of Hours and Earnings (ASHE). Again, this helped employers to provide context and meaning to their own results."
Patrick Alleyne, Ethnicity Pay Gap Reporting: Are you Prepared
Through the incredible range of data that Gapsquare has gathered and investigated over the years, we have been able to deduce that a lot can be learned by breaking down data by a variety of factors - including location. Your gender and ethnicity pay gap picture might be really different in your London office when compared to, say, your office in the Midlands. There is so, so much to be learned, especially with ethnicity pay reporting, by looking at where your people are
Of course this may not the easiest thing to publish, you have to be really conscious of not identifying an individual or small group of individuals in your workplace and outlining or sharing their specific experience, whilst still allowing exploration of location-based data to be useful - but it could redefine how you approach closing the gap for good
5 - Act now
At Gapsquare we are 100% behind the development of ethnicity pay gap reporting regulations and are excited to see what comes of the recent consultation. We have seen how lively, engaging and progressive the gender pay gap reporting regulations have made the debate about fairer workplaces, we've seen eyes open and companies do incredible things to make a difference within their workplace.
We are already supporting companies report the ethnicity pay gap and have been impressed with the positive approach that companies and organisations take once their data starts to tell its story. At the same time, we know that ethnicity reporting is going to be a challenge to some and believe that integrating EPG reporting into how we manage our workplaces should involve an ongoing conversation between employers, the government and employees themselves. As the report argues, it is essential that Government listens to employers' concerns and work to frame the legislation in a way that makes it workable and manageable.
As we await details of ethnicity pay reporting regulations, we know that there is nothing more important than that employers take ownership of their data today. Getting ahead of the game will give you time to develop your strategy, hone your work to improve matters and build a reputation as a truly progressive and inclusive employer.
If you're looking to get started and not sure how to approach data collection, please do get in touch with the Gapsquare team, we've got a vast range of experience with ethnicity pay reporting and can get you on the right track in a first, initial consultation. It's free, there's no obligation to use our analytical software and it might just redefine your policy and approach.