Just 13 companies in the FTSE 100 have published figures on their ethnicity pay gap, according to new research from the Chartered Institute of Personnel and Development (CIPD), which is calling for mandatory reporting around pay and ethnicity.
‘Last year’s Black Lives Matter protests led many organizations to publicly condemn racism and discrimination in our societies and workplaces,’ says the professional body in a statement. ‘But few have voluntarily reported their ethnicity pay gaps, despite increasing expectation from the public, investors and other stakeholders.’
Of the 13 FTSE 100 companies to voluntarily report ethnicity pay gap data, CIPD says 10 have done so for the first time, ‘suggesting that greater public scrutiny of race inequalities prompted these employers to act.’
The CIPD is calling for ethnicity pay reporting, including the requirement to publish ‘a clear narrative and action plan’ to become mandatory for all large employers from April 2023.
All UK employers with more than 250 staff must already publish gender pay gap figures, though these do not necessarily represent unequal pay for equal work, instead showing how different groups are distributed across pay bands.
The CIPD wants companies to use the same gender pay gap timeframe for ethnicity pay reporting, so data would be collected in March/April 2023 and would need to be reported within one year. It does recognize that ethnicity pay reporting is ‘more complex’ than gender pay gap reporting, however.
It also emphasizes the importance of a narrative alongside the numbers, arguing that numbers alone are less likely to drive real change. Too many organizations are failing to provide this important additional commentary, says the CIPD.
‘While it’s positive to see some organizations voluntarily report their ethnicity pay, it’s clear that progress is slow and reporting is very inconsistent,’ says Peter Cheese, chief executive of the CIPD, in a statement. ‘Some companies just report their data while others report a commitment without sharing the data behind it.
‘We know gender pay gap reporting has driven greater transparency and accelerated progress, and we believe the same is needed for ethnicity pay reporting. Mandatory reporting of data, and the associated narrative that shows understanding of the data and the actions being taken to improve, for both ethnicity and gender pay, will help create fairer workplaces and societies and kickstart real change.’
On Monday, MPs will debate making ethnicity pay gap reporting mandatory, after 130,000 people signed a petition backing the change.
In April, the government’s Commission on Race and Ethnic Disparities said reporting should be done on a voluntary basis only. The UK government previously cited ‘concerns around the legality of collecting ethnicity data, poor response rates from employees and the need to ensure employee anonymity’ as among the barriers to mandatory ethnicity pay reporting.
Previous CIPD research has found that while most employers (77 percent) consider workforce diversity to be a priority, only around a third (36 percent) collect and analyze data to identify differences in pay and progression for employees from different ethnic groups.