Ethnicity pay reporting: Why it’s time, and where to start
03 April 2019
Influential business leaders came together at a PwC event in London last week to discuss why it’s time organisations tackle the task of understanding, reporting and addressing their ethnicity pay gap.
Whether inspired by an ethical or moral obligation, or just keen to get ahead of a possible Government-mandated requirement to report, there are lots of reasons why organisations should be taking a close look at their ethnicity pay gap.
However, if some organisations still need convincing, or are put off by concerns over cost or complexity, then it’s worth considering the potential downsides of not doing so.
It’s time for change
At the launch of PwC’s Taking the Right Approach to Ethnicity Pay Gap Reporting, attendees heard that it is essential for organisations to better reflect the outside world, their clients, customers and a diverse talent pool, if they want to be successful.
Heather Melville, Director and Head of Client Experience at PwC, said organisations need to become more diverse in order to improve their decision-making and bring fresh thinking and new perspectives to help drive greater innovation.
“If you do the same thing with the same people, you’re going to get the same results,” she said, warning organisations against always hiring from the same communities and talent pools.
Talk About It
A critical factor for being able to understand, report and act upon an ethnicity pay gap, is the ability to have an open conversation about race. Panellists at our event agreed too many organisations get themselves tied up in knots trying to talk about it.
Sandra Kerr, Race Equality Director at Business in the Community, said: “If you don’t want to talk about something, how can you possibly deal with it. It is important organisations feel comfortable talking about race.”
The panelists resoundingly agreed that trust and openness are critical to obtaining accurate data, and organisations have a role to play in creating forums where employees feel comfortable talking about race, and where people can see that everybody can benefit from greater transparency.
PwC is already helping a number of clients to understand and address their ethnicity pay gaps, from how to communicate with employees, to how to collect, analyse and report the data and put in place effective measures to close the gap. But our own research found 75% of organisations say they do not currently have sufficient data to analyse their gaps. This indicates employees need to be encouraged more widely to share their information.
Sarah Churchman, Chief Inclusion, Community and Wellbeing Officer at PwC, said: “You can’t expect everyone to want to share their information so you have to explain why you are asking for it and exactly what you intend to do with it. You need to reassure that confidentiality is guaranteed”.
Churchman cautioned that the process won’t be easy but businesses should be patient and “keep asking, but be clear why you’re asking”.
Meanwhile, Polly Ralph, Director, Data Protection Strategy for Legal and Compliance Services, said it’s paramount for organisations to be aware of the regulatory framework in which they are operating, but not to allow that to deter them.
“Things like GDPR do not prevent the collection of ethnicity pay data,” said Ralph. “We just have to think carefully about how we do it and how we’re going to protect the data.”
Ed Stacey, Head of Legal Services at PwC, made the point that being aware of your ethnicity pay gap could help identify areas of exposure early, for example around potential discrimination claims, and help to address and resolve problems before they escalate.
Consider the Next Step
PwC has been reporting its ethnicity pay gap and action plan to drive progress on diversity and inclusion in our digital annual report since 2016 and working with clients to do the same, but Churchman said all organisations must consider this a stepping stone towards further progress. “We’re looking at all kinds of pay gaps,” she said. “On disability and sexuality we just don’t have that much data and we need better data.”
Others emphasised that ethnicity pay gap reporting shouldn’t just be seen as a simple compliance exercise, but a step in the journey towards a more transparent, fair and accountable workplace that champions inclusion and diversity in every way.
The panellists speaking at our PwC event were all adamant that action is needed. With the government having ended it’s consultation on ethnicity pay gap reporting in January, there is clearly change on the horizon. Or as Kerr said: “The writing is on the wall. ”
To discuss any of the above issues raised and how PwC can help you tackle the task within your organisation, contact Katy Bennett, Diversity and Inclusion Consulting Director on the details below.