Last month the government published a consultation to gather views on whether organisations should be required to report on the pay differentials between people from different ethnic backgrounds. The CIPD Public Policy team have been influential in supporting the introduction of this consultation and will be thorough in feeding-in the views of our members and HR professionals to develop a practical response.
The consultation was announced by UK Prime Minister Theresa May on the first anniversary of the government's Race Disparity Audit, which sought to establish how people of different ethnic backgrounds are treated across society. This Audit found significant disparities in the pay and progression of employees from black and minority ethnic backgrounds when compared to their white colleagues.
Baroness McGregor-Smith recommended that businesses with more than 50 employees should be required to publish ethnicity pay data in her government-commissioned independent review into race in the workplace, published in February 2017. However, only 11% of employers surveyed by Business in the Community (BITC), in an assessment of progress on the McGregor-Smith review, are currently collecting this sort of data. Clearly much more progress is needed here, with Baroness McGregor-Smith herself arguing that “no employer can honestly say they are improving the ethnic diversity of their workforce unless they know their starting point and can monitor their success over time”.
The consultation, which closes on the 11th January, seeks views on ethnicity pay reporting by employers. It asks questions specifically on:
- what ethnicity pay information should be reported by employers to allow for meaningful action,
- who should be expected to report, and
- what the next steps should be
Ethnicity pay reporting presents unique challenges and the consultation will need to provide practical support to employers around these issues. One key challenge is the availability of demographic data. An important part of meaningful reporting is having accurate data to work with. Many employers don’t collect data relating to ethnic origin and those that do can suffer from a low declaration rate. Another challenge is the classification of different ethnic groups as part of the reporting requirements. There are several classification systems available and some employers will have developed their own system to reflect the demographics of their own workforce. There is potential for inconsistency, making it difficult to draw comparisons between organisations.
Alongside the consultation, the government has announced a new 'Race at Work Charter', developed with BITC. Businesses that adopt the charter commit themselves to various principles and actions designed to encourage recruitment and progression of ethnic minority employees. The CIPD, alongside a number of other organisations, have committed to the Race at Work Charter which is being personally championed by our CEO, Peter Cheese.
Recent CIPD research, Barriers to BAME employee career progression to the top (2017) looked at the barriers to career progression faced by employees from a Black, Asian and minority ethnic background. The research, showed a significant lack of ethnic diversity at the top of UK organisations. Black, Asian and minority ethnic employees were more likely than those from a white British background to say that career progression to date had failed to meet their expectations, that they had experienced discrimination and that they had felt that they needed to change aspects of their behaviour to fit into the workplace. In order to help improve their progression respondents wanted greater transparency around career paths, support from mentors and visible senior role models within their organisations.
The CIPD has also held joint roundtables with BEIS on ethnicity pay reporting and the Cabinet Office on improving ethnic disparities in employment. An impressive and informed group of HR leaders and consultants from our Policy Forum discussed key issues and fed their views into both BEIS and the Cabinet Office’s campaigns and strategy team and the work of the Race Disparity Unit.
We are also proactively responding to the Ethnicity Pay Reporting Consultation by surveying our members, in addition to holding regional policy roundtables in London, Cardiff, Leicester and Manchester. If you would like to feed your views into this very important consultation, please fill in our survey at: https://www.surveymonkey.com/r/ethnicitypay
- CIPD (2017) Addressing the barriers to BAME employee career progression to the top
- The McGregor-Smith Review (2017) Race in the Workplace
- BITC (2018) The Race at Work Survey Report
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