Companies are voluntarily reporting their ethnic pay gap

Almost a quarter of businesses have calculated their ethnicity pay gap already even though there is currently no legal requirement to do so.

This was discovered by the consulting firm, PwC who found that 23 per cent of companies are calculating their ethnicity pay gap, which is up from 5 per cent in 2018.

Two-thirds of companies are also now collecting ethnicity data. Even though one challenge surrounding collecting data on ethnicity is a small number of people responding to such questions or HR feeling unsure “how to ask questions around race and ethnicity”.

Another reason as to why organisations found it hard to gather data on this issue is the restrictions GDPR has put in place.

Due to this, nearly seven-tenths are now looking in to new ways in which they can encourage their employees to share data on this subject. Two-fifths (40 per cent) now offer career sponsorship and advice to ethnic minority employees, in 2018 this form of help was not available at all.

Nearly half of businesses said they would be ready to report their ethnicity pay gap in three years’ time.

Katy Bennett, director of HR at PwCs consulting practice, said:

Doing this is a critical first step towards identifying the actions that will drive real and sustainable change. At a time when issues surrounding race and ethnicity in the workplace are in sharp focus, it’s positive to see more companies looking to demonstrate a commitment to improving ethnic diversity.

Collecting, analysing and reporting ethnicity pay gaps is an important first step for an organisation, but reporting on its own will not drive change. Ultimately, the key is the insight that this data provides into where change is most needed. By measuring inclusion as well as diversity, organisations can gain a holistic understanding of where improvements can best be made.

Jason Buwanabala, the HR consulting actuary and data scientist at PwC, said:

In order to address inequalities caused by systemic and structural biases, organisations should be looking across the entire employee experience to ensure fairness in areas such as recruitment, progression and attrition – and data is critical here.

“There are undoubtedly challenges when it comes to collecting and analysing information on ethnicity in the workplace and the companies we’ve spoken to reflect some of these in their concerns – data protection, technological capacity and low response rates are big ones.

Improving data quality should be a priority for organisations but this shouldn’t prevent them from starting the process by using the data they already have.

PwC has been reporting its ethnicity pay gap voluntarily for four years now. In 2019, PwC’s median Black, Asian, and minority ethnic (BAME) pay gap was 4.7 per cent and its median bonus gap was 47.2 per cent.

In order to obtain these results, PwC polled 100 companies.