Big Four back mandatory ethnicity pay gap reporting

The Big Four are backing a call for mandatory ethnicity pay gap reporting proposed by INvolve, an organisation that champions diversity and inclusion in business, and have developed guidance on how to report the necessary data

The push for mandatory reporting is supported by a number of other organisations, including Bank of England, Citi, Creative Equals, Lloyd’s of London, PwC, ITN, Stella McCartney, Bupa, Jomas Associates, Santander, Sodexo, Reluctantly Brave and WPP, as well as Deloitte, EY, KPMG and PwC.

They want to see mandatory ethnicity pay gap reporting for UK businesses, and have also committed to working towards reporting the ethnicity pay gap ahead of any government mandate to do so.

The group has pledged to bring about institutional change through visibility of data and open discussion of why the ethnicity pay gap exists within their organisations, and to encourage other businesses to engage in voluntary reporting by endorsing the reporting framework laid out by INvolve.

The government is currently consulting on whether to make ethnicity pay gap reporting mandatory, and INvolve says that regardless of the outcome, the signatures of its mandate believe  that it is essential for businesses to examine their ethnicity pay gap.

Sanjay Bhandari, partner, EY, said: ‘Talking about race is hard. Ethnicity pay gap reporting provides vital impetus to overcome the fear of talking about race. Our challenge as leaders is to then hold that gaze and not be deflected into more comfortable topics.’

The white paper, which has been developed with input from all of the Big Four firms, provides guidance on how companies can go about reporting. Including best practice on encouraging self-identification, how to analyse the data and actions to ameliorate any pay gaps which might be uncovered in the process of reporting.

A report from INvolve also showed that white people earn on average between £67 and £209 more per week compared to similarly qualified individuals of a different ethnic background, and that the most ethnically diverse workplaces are 35 percentage points more likely to financially outperform industry averages.

Only about 3% of large employers have so far voluntarily reported their ethnic pay gaps. Of the signatories to INvolve’s mandate, Bank of England, Deloitte, EY, KPMG and ITN already voluntarily publish ethnicity pay gap data.

Jon Dymond, director, people and organisation at PwC, says of the importance of pay gap reporting that, ‘the social contract of professional service firms, financial services and corporations more broadly is increasingly scrutinized in the public domain, and businesses must ask themselves: are we the agents of change in society we think we are?”’

Chancellor of the Duchy of Lancaster David Lidington said: 'There is an urgent need to explain or change ethnic disparities. As the Prime Minister's Race Disparity Audit revealed, average hourly pay for white people is higher than the average hourly pay for people from almost all other ethnic groups. We must all seek to confront uncomfortable truths like this, so I welcome the action taken by these employers today to do just that. Their commitment builds on our consultation with employers exploring how to introduce mandatory ethnicity pay reporting without placing undue burden on businesses.'

Ethnicity pay gap reporting mandate is here.

Report by Pat Sweet

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