Business in the Community response to Ethnicity Pay Gap research
Sandra Kerr OBE, Race Equality Director, Business in the Community said: “I welcome the Fawcett Society research into ethnicity pay gaps. This paper sets out the complex picture of gender, ethnicity and pay and the trends over the last 20 years. It also reinforces that a one-size-fits-all approach to tackling inequality in the labour market will not work. Employers need to bear this in mind as they seek to take forward the recommendations from the McGregor-Smith Review to collect and publish data on the ethnicity and pay bands of their workforce.
“Last year a study by the Trades Union Congress (TUC) showed that black employees with degrees earned an average of £4.30 less per hour than their white equivalents earned for the same amount of work. We can see from this data that, for some minority ethnic groups, pay gaps start from the beginning of their careers.
“I welcome the recommendations in the McGregor-Smith Review into Race in the Workplace that are calling on employers to take action on the ethnicity and pay. Included in these recommendations are:
- Publicly available data: Listed companies and all businesses and public bodies with more than 50 employees should publish a breakdown of employees by race and pay band.
- Government legislation: Government should legislate to ensure that all listed companies and businesses employing more than 50 people publish workforce data broken down by race and pay band.
“From our report ‘Race at the Top’, we know that although one in 10 employed people are from a BAME background, only one in 16 senior management positions and one in 13 management positions are held by ethnic minorities. The findings also showed that, between 2007 and 2012, the share of BAME employees in top management positions increased by just 0.5%. Our Race at Work research also highlighted how important career progression is to BAME employees.
“There are complex organisational and structural issues for employers to tackle, such as ‘internal’ occupational segregation and ensuring fair and equal access to key roles and opportunities. These roles, which are often in central and head office functions, tend to attract the highest performance appraisal assessments – which in turn impacts on pay.
“Of course the call to action for employers is to voluntarily publish this information on race and pay band. However, if employers are slow to take action on the recommendations, legislation has to be the next step as we know that organisations with more diverse senior executive teams and employees have 35% better financial returns.
“Following the recent government review into race in the workplace there is a potential £24bn boost to the economy, which can be achieved by business committing to race equality in their organisations. Actions employers should take include ensuring there is no bias in recruitment processes, tracking the speed of career progression and promotion for all of their talented employees and taking action on pay inequality for gender and race.
“We are delighted to be taking forward the recommendation in this review for a Best 100 Employers for Race listing. Taking action on racial and pay inequality is good for business, good for the economy and good for the employee – a potential triple win.”