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Nearly half of UK businesses plan to disclose ethnicity pay gap, says PwC

Sep 10
Tags: PwC
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Nearly half of UK businesses plan to disclose ethnicity pay gap...

The proportion of UK companies calculating their ethnicity pay gap has gone up considerably over the past two years, according to PwC. The professional services network surveyed more than 100 businesses with a combined employee count in excess of one million and found a trend towards collecting ethnicity data.

It discovered that nearly half of the companies surveyed have plans to disclose their ethnicity pay gap over the next three years. In addition, ten per cent have already made this information public - an increase from three per cent in 2018.

The percentage of firms collecting ethnicity information has also gone up since 2018, when it stood at 53 per cent. It now lies at 67 per cent, according to the study. Some 40 per cent of companies that have already calculated the pay gap have voluntarily published it.

In cases where organisations are not calculating their ethnicity pay gap, the most commonly cited reason was a lack of data. Further to this, many suggested this was caused by GDPR restrictions, low response rates or HR system limitations.

Katy Bennett, director in PwC’s HR consulting practice, said: “It’s very encouraging to see so many more companies taking action to collect, analyse and publish their ethnicity pay gap data. Doing this is a critical first step towards identifying the actions that will drive real and sustainable change.”

She added that we are currently in a period when issues to do with race and ethnicity in the workplace are in sharp focus. It’s therefore positive to note an increased number of companies showing a commitment to improving ethnic diversity.

As a first step, collecting, analysing and reporting the data on ethnicity pay gaps is important, but more must be done for real change to be seen. A holistic understanding of the places where improvements are required must come from such insights.

New initiatives to encourage employees to share their ethnicity information freely are currently being planned by around seven in 10 businesses. Further to this, 39 per cent are offering career sponsorship and advice to staff from ethnic minority backgrounds. This is in stark contrast to the situation two years ago, when no firms reported taking such action.

Other approaches include making sure recruitment is open and available to all, with 77 per cent of firms employing tools to reduce any unintentional bias. 70 per cent of businesses say they have set a clear strategy to address ethnic diversity and 63 per cent have proactively made access to the best work opportunities fairer.

Jason Buwanabala, HR consulting actuary and data scientist at PwC, said: “In order to address inequalities caused by systemic and structural biases, organisations should be looking across the entire employee experience to ensure fairness in areas such as recruitment, progression and attrition - and data is critical here.”
He added that there are undoubtedly challenges in collecting and analysing information on ethnicity in the workplace. While improving the quality of such data should be a priority, he suggested businesses should not be put off using what they already have in the meantime.

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