The situation

CIPD viewpoint

Actions for the UK Government

• Introduce mandatory reporting on ethnicity pay for businesses with more than 250 employees, based on the same quartiles used for gender pay gap reporting. There should also be a single pay gap figure that compares average hourly earnings of ethnic minority employees as a percentage of white employees.
• Require organisations to produce a narrative and action plan, based on government guidance, as part of ethnicity pay reporting. Progress against the action plan should be included in subsequent reports, to drive tangible change in recruitment, management, development and promotion of employees across all ethnicities.
• Set a timeline for revisiting the impact of ethnicity pay reporting and consult with employers on whether it would be appropriate to provide more detailed data against standardised classifications of ethnicity.
• Advocate and support better quality people management. CIPD research found that people management practice is poor according to all ethnicities.
• Develop guidance for employer action. There is a clear need for practical guidance and case study examples to kick-start and maintain the actions called for in the McGregor-Smith Review, as well as to develop better quality workforce data.

Recommendations for employers

• Build the business case for increasing diversity and inclusion in terms of attracting a wider, more diverse talent pool and boosting innovation and customer service by developing a workforce that is more reflective of the organisation’s customer base and wider society.
• Identify levels of ethnic diversity using HR data and use this benchmark to explore any structural and cultural barriers that are maintaining workplace inequalities.
• Avoid generalisations: ‘BAME’ encompasses a wide range of backgrounds, cultures and traditions and many different barriers to career progression. We recommend following the Race Disparity Audit’s recommendation, referring to ‘ethnic minorities’ instead. 
• Review recruitment practices to eliminate bias and discrimination. This could include how and where employers recruit new workers, whether the images and language used in recruitment materials are inclusive, line manager interview practices and the approach of recruiters working on employers’ behalf.
• Review people processes to retain black and ethnic minority people. Identify barriers in career progression and ‘cliff edges’ where employees leave, and address these. Also consider race equality through an intersectional lens such as the combined effects of discrimination experienced because of a person’s race, gender, or disability and ensure interventions are tailored to addressing multiple barriers and disadvantages.
• Build an inclusive culture. Ensure that race equality is embedded into the organisation’s vision, mission, values and business plans. Ensure policies and practices are underpinned by race equality outcomes and impact principles that proactively address discrimination and disadvantage including through the use of positive action measures that actively celebrate and encourage difference. Identify whether there are mechanisms in place to enable employees to voice issues about inequality and need for change. Take steps to understand where the workplace is now (evidencing the baseline), and what could be done to improve inclusivity (action plan).
• Terminology - we advise employers to be sensitive in the usage of language and terminology on race equality and wider equality, diversity and inclusion. This should include engaging and inviting input from experts and staff with lived experience. The CIPD uses the term ethnic minority to describe all people from minority backgrounds who experience bias, barriers, disadvantage, and discrimination.. We use this term as it is currently the most commonly used. We recognise that no one term will resonate with everyone and respect the uses of other terms where broad categorisations are required. However, we would advise and encourage organisations to be as specific as possible (eg Afghanistan, Bangladeshi, Chinese, Gypsy, Indian, Roma, Pakistani, Nigerian, Somalian, Ukrainian), wherever possible.