Research has recently found that the number of organisations reporting on their ethnicity pay gap halved last year. The statistics, compiled by HR DataHub, found that only 64 UK organisations published their ethnicity pay gap in 2021. This was down from 129 in the previous year.
Since HR DataHub began collecting the data in 2018, only 170 organisations have at some point reported on their ethnicity pay gap. The data shows that on average, only one in four reports that data every year. However, what is promising is that in 2021, the median ethnicity pay gap fell to 10% from 12% the previous year.
Whilst many organisations have made a proactive decision to do so, there is no legal obligation to report ethnicity pay gap data in the same way as for gender. However, given the heartfelt power of the Black Lives Matter movement over recent years and emphasis many employers have placed on reducing racial inequality, I am surprised by this decline in engagement and I think we should be giving some thought to why this has happened. Is it because employers are genuinely concerned about what their results may show, or is it because they have simply not been able to collect the requisite data? If the latter is the case, this might prompt a wider conversation about whether employees have been sufficiently informed about the benefits of sharing their data and reassured about how it will be stored and used.
In any case, given the positive impact that pay gap reporting can have on tackling inequality in the workplace, there is a question of whether the law should now go further. There have already been calls from a number of organisations, including the Women and Equalities Committee and CIPD, to introduce compulsory ethnicity pay gap reporting by next year. CIPD already recommends that employers should publish their ethnicity pay gap figures, as well as the proportion of their total UK workforce from ethnic minorities and the proportion of employees who have disclosed their ethnicity. However, in my view, in order to ensure the greatest engagement and maximum results, pay gap reporting on all protected characteristics, as well as socio-economic background, should be made mandatory so that we can continue to make progress towards a more equal and inclusive society.
If you would like support with pay gap reporting in your organisation, then please do get in touch.