Closing the ethnicity pay gap is about making society fairer and overcoming inequalities. And it’s not only the right thing to do: the business case for it is watertight. The McGregor-Smith review finds that the potential benefit to the UK economy from race equality, through improved participation and progression, is estimated to be £24bn a year – which represents 1.3% of UK GDP.
One key area to address is to improve ethnicity disclosure rates among your employees by establishing a culture of trust. Gender pay gap reporting shows us that data collection and analysis drive transparency, and this approach will also help businesses to better identify, understand and overcome the barriers that ethnic minority employees face in the workplace.
Your firm needs data on diversity within your organisation to understand the specific barriers and challenges that ethnic minorities face in your business. You can then use this data to inform where you need to direct resources to improve the issues, and to track progress. But to use this data, you’ll need your employees to declare their ethnicity first.
Four actions organisations can take to improve disclosure rates
Run long-term campaigns that explain clearly how data will be used
Increase your ethnicity disclosure rate by sustaining campaigns over an extended period of time, and support this with communications explaining how the data will be used by the company and how it will benefit inclusion and fairness
PwC LLP developed a sustained programme of activities to encourage their people to share their data. This included a firm-wide communications campaign ‘who do we think you are’ to encourage people to share their personal data. The campaign explained why people were being asked for this information and how the data is used for ethnicity pay gap analysis and action planning. These messages were amplified by the employee networks.
PwC’s HR system was also adapted to enable a ‘prefer not to say’ response to all personal data questions, which may be preferable to employees who don’t identify with any of the ethnicity categories presented. Employees are reminded to share their data at two points in the year: during annual compliance training and annual benefits renewal. Currently 92% of PwC employees have shared their ethnicity.
Target campaigns by understanding why people may not want to share their ethnicity
Make your disclosure rate campaign as targeted as possible by seeking employee input to understand what is holding them back from sharing their ethnicity. There is a real need for simplification and clarity on purpose of disclosure
Santander UK wanted to understand why colleagues were not comfortable to disclose their data and what could be done to facilitate a change. To answer these questions, Santander held workshops with members of their employee-led Ethnicity@Work network, designed to understand the barriers.
Santander developed a multi-channel internal communications campaign to drive awareness, trust and encouragement to help employees feel comfortable in disclosing their ethnicity data. The firm created a video featuring employees explaining why they are happy to disclose their data and why they are encouraging others to do the same. The main message of the video was: ‘your personal information: why we ask for it, what happens to it and how it can be updated’. Santander UK saw a significant uplift on their ethnic data disclosure rates – by 8.5% basis points.
Focus efforts around a central day or event
Centre your disclosure rate campaign and diversity and inclusion activities around specific days, such as a company-wide D&I day, to concentrate efforts and boost engagement
Shell started a conversation about race at work and ran a campaign to increase disclosure on ethnicity as part of its quarterly diversity and inclusion (D&I) day. For one D&I day, the UK HR Vice President communicated with over 1,000 UK line managers the expectation for leaders to hold a discussion on race and ethnicity in the workplace. They also sent a message to over 5,000 UK employees outlining the week’s activities and a call to action for colleagues to share their ethnicity. This was complemented by a video from UK senior leaders explaining why sharing ethnicity is important. The company also organised a panel discussion, facilitated by one of Shell’s ethnicity sponsors, with the theme #EmbraceTheDifference.
Involve relevant groups in the decision-making process to turn reporting on ethnicity into tangible action
In 2019, the CBI voluntarily reported our ethnicity pay gap for the first time. The first step towards reporting was to encourage people to disclose their ethnicity. To do so, the CBI clearly communicated why we wanted to report on this data, what we were doing with the data and ultimately what this would achieve on an organisational and employee level. This engagement enabled people to understand, trust and promote the messaging and increased the disclosure rate.
Next, we ran analysis on our updated data set and reviewed it with internal stakeholders including wider HR, the BAME employee network, D&I sponsor, staff forum, D&I policy team and Executive Committee. With these stakeholders, we worked to understand the data and agree on an action plan to close the gap. Our HR and communications teams worked closely together to create a robust comms strategy, to ensure consistency in messaging, and to collate a Q&A document to respond to any questions we had from our employees and the media.
Though there is no one action that will close the ethnicity pay gap, your business can take its next step through concerted efforts to boost your disclosure rates.
Further resources on race and equality
In conjunction with the CBI’s race and equality webinar series, we’ve opened up our ethnicity pay gap guide Bridge the gap to all businesses – not just members – for a limited time. The guide features real-world case studies from CBI members and partners, highlighting the strategies and initiatives you can use to close your pay gap.