Business community urges government to make ethnicity pay gap reporting mandatory
A group of 12 FTSE100 businesses came together last night with over 60 guests from government and the business community to promote the importance of ethnicity pay gap reporting. The group of 12 companies, led by Auto Trader and AVEVA, all voluntarily publish their ethnicity pay gap information, and are encouraging other companies to follow suit. This event is part of a longer-term lobbying effort to make the practice a regulatory requirement, as it is for gender pay gap reporting.
Caroline Nokes, MP and Chair of the Women & Equalities Committee, and Marcial Boo, CEO of the Equality and Human Rights Commission, highlighted to companies and parliamentarians the importance of creating diverse companies and how pay gap reporting is an essential element of that.
The group also launched a new report: “Approaches to Ethnicity Pay Gap Reporting”. The aim is to share successful experiences of ethnicity pay gap reporting and encourage other businesses to do the same. The report shares insights into data collection methodology, reporting processes, communication strategies, skills and resources needed and the impact of reporting. The report also includes findings such as the average length of the reporting process - between 6-12 months - costs (with one company reporting that they executed this for as little as £6,000), and the average number of staff time required (just 27 days) to implement the project.
Ethnicity pay gap reporting has been on the government agenda since Theresa May’s 2017 manifesto which included a pledge to require all large employers to publish their ethnicity pay gaps. Since then, the changes in government personnel have delayed clarification of this issue. Last year, the government u-turned and announced it would not make ethnicity pay gap reporting mandatory, highlighting the impact of the pandemic on businesses and their need to focus on recovery.
Caroline Nokes, MP and Chair of the Women & Equalities Committee, commented on the event: “Introducing mandatory ethnicity pay gap reporting for larger businesses would set the ball rolling, reducing inequalities between different ethnic groups. Until that happens, I am delighted to see a growing number of businesses reporting voluntarily. This group of FTSE100 companies has shown that it is possible and have created a practical report to help other companies do the same. We commend them. They, the business community, are setting out a clear case for making ethnicity pay gap reporting mandatory, and it’s time for government to listen and take action.”
At Auto Trader we have a strategic commitment to create a representative workforce across all levels of our organisation. We pursue our aim both authentically and systemically, expecting to see improvements in metrics, but not being driven solely by the pursuit of metrics. We believe it is important to remain accountable and transparent which is why we publish our ethnicity pay gap.
Peter Herweck, CEO of AVEVA, said: “Ethnicity pay gap reporting is simple, it just requires close collaboration within your company. We are committed to the continuous improvement in the representation of our workforce and the creation of an inclusive culture. It would be good to see mandatory ethnicity pay gap reporting because the mandatory gender pay gap reporting in the UK has led to a positive impact.”
The group already has their next step planned - a follow up ministerial reception scheduled for May 2023 in the Terrace at the House of Commons. You can register interest for this event here.
The CIPD has also produced a guide to ethnicity pay gap reporting which you can find here.
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