Rise in companies collecting ethnicity pay gap data

The number of companies calculating their ethnicity pay gap has grown significantly in the past two years, a study by PwC suggests

A survey of more than 100 businesses that collectively employ more than one million UK employees found almost a quarter (23%) now calculate their ethnicity pay gap, compared to just 5% in 2018.

Of these, 40% have already published the data voluntarily.

PwC’s research also found the percentage of companies surveyed now collecting ethnicity data on their people is up to 67%, from 53% in 2018.

Almost half of businesses surveyed are planning to disclose their ethnicity pay gap in the next three years. An additional 10% have already done so - up from 3% in 2018.

Katy Bennett, director in PwC’s HR consulting practice, said: ‘At a time when issues surrounding race and ethnicity in the workplace are in sharp focus, it’s positive to see more companies looking to demonstrate a commitment to improving ethnic diversity.

‘Collecting, analysing and reporting ethnicity pay gaps is an important first step for an organisation, but reporting on its own will not drive change.

‘Ultimately, the key is the insight that this data provides into where change is most needed.

‘By measuring inclusion as well as diversity, organisations can gain a holistic understanding of where improvements can best be made.’

Around seven in 10 companies say they are planning new initiatives to encourage more staff to voluntarily share their ethnicity data.

More than a third (39%) are now providing career sponsorship and advice to employees from an ethnic minority background. Two years ago, no employers said they were taking such action.

Other options include ensuring recruitment processes are open and attractive to all via use of new tools to reduce unintended bias (77%), setting a clear strategy on the action they will take to address ethnic diversity (70%), and taking steps to provide fair access to the best work opportunities (63%).

Jason Buwanabala, HR consulting actuary and data scientist at PwC, said: “There are undoubtedly challenges when it comes to collecting and analysing information on ethnicity in the workplace and the companies we’ve spoken to reflect some of these in their concerns - data protection, technological capacity and low response rates are big ones.

‘Improving data quality should be a priority for organisations but this shouldn’t prevent them from starting the process by using the data they already have.’

Accountancy Daily’s third survey of ethnic diversity within the UK’s top accountancy firms, published in August, suggested that while there was progress at the lower end of the recruitment process, BAME employees were not as well represented further up the career ladder.

The survey showed nearly 25% of professional staff within the top eight firms are from a BAME background. Back in 2016, this figure stood at 21%.

However, the representation at partner level has yet to catch up. EY has the most ethnically diverse partnership, with nearly 10% coming from a BAME background. KPMG’s has 8% BAME partners, closely followed by PwC at 7.8%, with Deloitte at 5.7%. Grant Thornton’s partnership is 6.9% BAME, at BDO the figure is 4.1% while RSM and Mazars both have 3%.

Laura Hinton, chief people officer and member of the executive board at PwC UK, said: ‘At PwC, we’re entering our fourth year of voluntarily reporting our ethnicity pay gap, and we were one of the first companies to do so.

‘It’s not been straightforward and the results are often stark reading - but that’s the point. Ultimately, our pay gap is improving year on year but we still have work to do.

‘The data we collect helps us identify issues and take targeted action within our business to reach new people, nurture their development and take steps every day to ensure our culture is inclusive and provides equal opportunities for all.

‘Communicating clearly and honestly with our people about why we’re asking for this information, and the positive steps we’re taking as a result, helps build trust and reinforce the message that it’s on all of us to continue challenging the status quo.’

Further reading:

Read our exclusive Accountancy Daily BAME survey

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