Ethnicity Pay Reporting
Companies are now voluntarily disclosing their ethnicity pay gap in line with gender. This has been prompted by the Government’s consultation in 2018 and speculation to include ethnicity within mandatory reporting.
There is a lack of senior representation across most industries and low retention rates within the middle of the pipeline. Without usable data, companies can only use a visual barometer to measure ethnic representation.
Measuring Success & Buy in
Whilst organisations are putting in place measures to improve equity within the workplace and change culture, without data it is impossible to measure success of implementing change. Data also helps get buy in from board level.
We are now seeing organisations successfully align data to the performance of business lines and making management accountable through KPIs and targets by using live dashboards.
Data capture ensures that sustained barriers can be identified within the organisation. Improving company data to include different demographics has meant that organisations can monitor progression for different groups, this has proven to help with recruitment, progression and seeing variations in attrition or retention rates across the business.
Creating the right categorisation and capturing the correct data has become useful for spotting trends within intersectionality and identifying within particular groups if there are specific needs or barriers to progression.
“There needs to be a shift in accountability from HR departments to those with the power to make decisions and enact change. Ethnicity reporting will certainly help make that shift easier. However, CEOs and boards see investing in this agenda as a long-term journey.”
“Boards need data to enable them to make decisions. There is currently too much lip service and not enough action around the BAME agenda.”
1. Get the foundations right
HR Systems can be quite antiquated. And if your organisation is still using one of the older clunky systems, we’ve heard that it’s really hard to change categorisation or add new sections.
Ensure you have the right system to future proof your data collection and ensure that it’s easy to access and fill out for your employees.
We recommend using the UK census catogories (which have been updated with a new category for 2021), this way it’s easy to compare your data to local working population. This will also give you a breakdown of the main ethnic demographics within your organisation for internal use. Please note, when voluntarily disclosing pay gap, these figures are usually recorded as white and non-white or in broad ethnic minority groups.
3. Disclosure rates
In the UK, unlike with gender, it is not compulsory to declare your ethnicity. Therefore there should be a ‘prefer not to say’ catogory, or similar.
Getting reasonable disclosure rates have been the biggest challenge to getting usable data. To ensure the quickest way of getting your employees to disclose ethnicity, and other protected characteristics, it’s important to convey exactly what the data is being used for (see Channel 4’s guide).
4. Consistent Comms Plan
Get in touch with comms and use every internal platform at your disposal. It’s so important to ensure that you aren’t just launching your data comms, but that you continue to send out reminders. Organisations have held events, had senior speakers explaining the necessity for data and used internal communication platforms. Remember at every opportunity to explain why you are collecting the data.
Ensuring the right people have sight of the data is crucial. Organisations have reported back that while data is being captured, it isn’t being shared and therefore can’t be used to improve inclusion.
2. Getting the right metrics
Useful insights include comparing ethnicity against:
– Levels within the organisation
– Business lines or departments
– Hiring, promotion and attrition rates
– Sickness rates
– Other well-being areas
Also looking into areas of intersectionality, i.e. ethnicity and class, ethnicity and women, etc.
3. Voluntarily disclosing your pay gap
Companies are continuing to join the list of those disclosing their ethnicity pay gap alongside the Government’s mandatory legislation to report on gender. Companies have been commended on their transparency, and although many admit to not having the figures they would like, many have produced a summary action plan to run alongside.