The Diversity Pay Gap

The Diversity Pay Gap

What do we mean by the “pay gap”?

 

You often hear about the “pay gap”. But what does this actually mean?

It’s the difference in the average pay of two different groups of people. It is different to equal pay, which means you must pay men and women the same for equal or similar work, as set out in the Equality Act 2010.

Diversity Pay Gap

Acknowledging the Gender Pay Gap

 

November 10 is known as Equal Pay Day: when women in the UK stop earning, relative to men.

The Equality Act 2010 (Gender Pay Information) Regulations 2017 introduced mandatory annual reporting to show whether there is a difference in the average pay between male and female employees in companies with 250 or more employees.

Across all industries, organisations have produced annual gender pay reports including the BBC, TfL, the government and PwC. This mandatory reporting has provided insight into the disparity between women and men in the workplace and a body of evidence to support change.

Gender Pay Gap Infographic

A McKinsey study has estimated that the UK could add £150 billion to our GDP by 2025 if we bridge gender gaps in our workplaces.

 

But what about other pay gaps?

 

The diversity/ ethnicity pay gap is a long-standing phenomenon. But it hasn’t benefited from the same attention as the gender pay gap.

Award-winning journalist Reni Eddo-Lodge wrote in Why I’m No Longer Talking to White People About Race about her frustration with the way discussions of race and racism in Britain were not being led by the people directly affected by it. This must-read is a great starting point to begin to understand race relations in the UK.

Previous research has shown that people from ethnic minorities earn less on average than white people. For example, the mean hourly ethnic pay gap between 1993-2014 has narrowed very little; even increasing for some ethnic groups.

An independent review commissioned by Baroness McGregor-Smith was published last February analysing the issues affecting black and minority ethnic (BAME) groups in the workplace.

The review found that 1 in 8 British workers (14%) come from a BAME background, but just 6% hold top management positions.

The diversity pay gap in the UK is a costly phenomenon. It’s a proven fact that more diverse teams perform better, so diversity matters. The review showed that increasing BAME workplace progression could boost the UK economy by £24 billion.

The BBC is one organisation that does have salary data on its ethnicity pay gap. This data shows that only 10 out of 96 on the highest earning list coming from BAME backgrounds.

It has taken steps to put diversity and inclusion at the forefront of the organisation’s values. The BBC brought in the EW Group to design and deliver a series of  workshops and action learning sets for its BAME positive action mentoring programme, RISE, to tackle the lack of BAME representation at senior levels.

 

What should our next steps be in the UK?

 

Many factors have contributed to the diversity pay gap. One of which is structural obstacles: that is companies, universities and organisations not doing enough to diversify. For example, in 2016 Oxford University offered places to only 45 black students.

This links to another factor: unconscious bias. We know that unconscious bias affects everyone and is powerful. It’s automatic and unintentional, so it impacts every interaction and decision we make. In our workshops, we work with businesses to find practical ways that their senior leaders, managers and staff can manage these biases so workplaces can be more inclusively.

Should Parliament pass legislation that requires mandatory reporting on the diversity pay gap?

Well, the first reading of the Ethnicity Pay Gap Bill began on the 8th June 2016 but a second reading was never scheduled, and the bill made no further progress.

What other pay gaps are we ignoring?

EW Group offer expert guidance on pay gap analysis and action-planning. Find out how we can support you in closing the your pay gap – and reaping the business benefits as a result.