Too little progress has been made on reducing gender and ethnicity pay gaps says a report, dispute UK employers saying it is a key priority.

According to Mercer’s new UK Gender and Ethnicity Pay Gap trends report, three-quarters (75%) of respondents disagreed with the government’s decision to suspend gender pay gap reporting in 2020. 

Although almost three quarters (74%) of respondents reported their numbers to show a continued commitment for inclusion despite the suspension, there has been minimal progress made in closing the gap. 

The report said it was alarming that nearly one in five employers (18%) reported an increase in the pay gap from 2019 to 2020. Recently reported government figures on the UK gender pay gap numbers suggest a median gap of 10.4 percent for 2020, compared to 9.7 percent from 2019. A similar theme to Mercer’s 2021 Gender and Ethnicity Pay Gap Trends survey.

Half (49%) of survey respondents claim they had seen little or no progress year-on-year and just 1 percent were able to significantly reduce their pay gap by more than 10 percent. This, the report says, is a clear indication of how businesses continue to struggle in closing pay gaps – a trend which is expected to continue.

The report shows that fewer than one in three (30%) employers reduced its gender pay gap by 2 percent between 2019 and 2020. 

Diversity, Equity and Inclusion Consulting Leader at Mercer UK, Michelle Sequeira said some of the reasons employers are finding it difficult to bridge the gap include attracting and retaining women and failing to eliminate the barriers to career progression that prevent female and diverse employees from entering more senior roles. 

She said: “There are employers who have also shown a willingness to change and they are encouraged to conduct deeper analysis to get to the root of the problem and put action plans in place.

Following many unfortunate events globally surrounding race, employers are now looking beyond gender. Nearly two-thirds (65%) supported legislation enabling ethnicity pay gaps to be reported on and addressed and almost half (45%) of respondents claimed they felt under pressure to conduct ethnicity pay gap analysis. Even though ethnicity pay gap reporting is not yet a legal requirement in the UK, three out of four employers (74%) have collected data or are planning to do so in future. 

More than half (57%) are conducting dry-run analysis to calculate ethnicity pay gaps, and  one-third (31%) have published or are planning to publish their pay gaps. Highlighting the mounting pressure from internal stakeholders, employees and unions to see changes within organisations and wider society.

 

 How to bridge the gap

Ms Sequeira said: “To truly make a difference, employers must look beyond their pay gaps. In addition to examining ethnicity pay gaps, our report encourages employers to widen the pools from which they recruit and take steps to reduce unconscious bias in processes. 

Most important of all is creating a genuinely inclusive workforce that allows people to be themselves and thrive both in and outside of work. It is ineffective to offer working parents career development opportunities and salaries if they are expected to extend their working days in ways that negatively impact their family lives. 

It is futile to hire and train up diverse colleagues if they join a non-inclusive culture or are repeatedly overlooked for promotion. Understanding your current state and engaging and upskilling senior leaders is so key to help them realise where they are going wrong.”