Mandatory race pay gap reporting will highlight inequalities in the workplace

The introduction of mandatory gender pay gap reporting has opened up necessary conversations about the change that transparency can bring in the workplace. Employees are asking questions about why their workplace has a gender pay gap and importantly what their bosses are doing to take action. In a survey of over 2,500 employees, the Equality and Human Rights Commission has found that nearly two-thirds of women would take an organisation's gender pay gap into consideration when applying for jobs. These results show the true power of lifting the lid on pay.

Inevitably, this attention has now turned to how pay gap reporting can be used as a tool to help other groups who face stark inequalities in employment, including ethnic minorities, disabled people and those from disadvantaged backgrounds, or those in insecure employment, such as zero hours contracts.

It’s not surprising, therefore, that the Government has announced a consultation around mandatory ethnicity pay gap reporting, a welcome step that the Equality and Human Rights Commission has called for previously, as part of its research. Extending mandatory reporting beyond gender will raise transparency about other inequalities and as the enforcement body for gender pay gap reporting who has seen 100% compliance from employers, we know that legislation is the necessary step to drive action and voluntary initiatives have shown to be ineffective in nudging employers to tackle inequality within their workforces.

But why stop there? 

Whilst we welcome the push for further transparency in the workplace for ethnic minorities, we think that reporting on pay gaps is not enough for employers to identify where they need to take action. We have recommended that organisations with more than 250 staff members should be required to publish information on the recruitment, retention and progression of their staff, not only for ethnic minorities, but also disabled employees.

This month sees the anniversary of the Disability Confident scheme, which has focussed on supporting the Government target of getting one million more disabled people in to employment over the next ten years. This voluntary scheme could go further in looking at what quality employment is provided for disabled people, or how disabled people are progressing or supported to stay in work. We know that disabled people face high pay gaps of 13.6% and this week’s mental health awareness day highlighted that one in four people in the UK experience poor mental health, many of whom are in the workplace. It is clear that the same attention needs to be paid to disability as to gender and ethnicity if employers wish to attract and retain good staff.

Employers should measure how many ethnic minority and disabled people:

• are successful in securing interviews or employment
• are able to access training and support to develop and;
• are being promoted or encouraged to stay in the workplace

These are strong indicators of not only pay differences, but other inequalities in work. Measuring these areas also ensures that employers are given the right information to know what they need to improve on, such as looking at potential bias in recruitment or the transparency of pay and bonus decisions.

Reporting in to action

We know that producing figures alone is not enough to shift enduring inequalities or communicate to employees, customers and shareholders what employers are doing about any inequalities that their reports highlight. We need to broaden transparency from numbers to actions and therefore it should also be mandatory for employers to produce narratives that set out time-bound and target driven action plans outlining their intention to address any inequalities that their staff are facing.

The Government’s consultation closes at 11.45pm on 11 January 2019, make sure that you have your say to ensure that we have the best chance of getting this reporting right and moving equality in the workplace forward for ethnic minorities and disabled employees.