Analysis
By s1jobs
Moves towards ethnicity pay gap reporting in the UK have stalled, with experts warning at a parliamentary session earlier this month that ministers are failing to take the matter seriously.
During that gathering of the Women and Equalities Committee, MP Philip Davies branded general figures on pay disparity as “meaningless” because they “don’t actually tell you about all the very complicated differences there are within different ethnicities”.
There are statistical issues when reporting on pay along ethnic lines. Companies can’t force staff to provide such information, making it difficult to gather accurate data in the already complex task of categorising races and nationalities.
But such challenges do not make it a pointless undertaking. Pay gap reporting is not an end in itself, but a starting point for identifying disparities.
A recent study by the Chartered Management Institute (CMI) found that only a third of managers are developing an action plan on either ethnicity pay gap reporting or improvements to include people from different ethnic groups. In the poll of 857 managers, just 47 per cent said their organisation was actively increasing the proportion of those from diverse backgrounds through their recruitment practices.
Since 2017, UK firms that employ more than 250 people have been legally required to report their gender pay gap data, including median, mean and bonus pay gaps. There are no such rules for reporting along ethnic lines, however a small but growing band of firms are now doing so voluntarily.
CMI chief executive Ann Francke said the findings from the survey by her group clearly show that not enough is being done. She and others such as the Trades Union Congress (TUC), Business in the Community, and the Chartered Institute of Personnel and Development (CIPD) have renewed calls for the introduction of mandatory ethnic pay gap reporting for larger firms.
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MPs last debated the issue in Parliament in September. The government has been weighing the matter since 2018 but appears no closer to a decision.
The CIPD has issued guidance to help employers in the absence of legislation, but has also noted that just 13 members of the FTSE 100 disclose any sort of ethnicity pay figures.
“Ethnicity pay reporting is an important lever for businesses and their stakeholders to assess if and where inequality based on ethnicity exists in their workforce,” CIPD chief executive Peter Cheese said. “That’s why we believe it is so important that businesses both capture and learn from this data.”
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