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In the wake of the protests around Black Lives Matter, this has brought the call for mandatory ethnicity pay gap reporting to the fore in most organisations.

We explore the data around diversity and inclusion (D&I) in the workplace and what steps employers are taking to promote fairness and equality across their organisation.

Top agenda item

Anti-racism protests led to the Prime Minister promising a commission to investigate and address systematic inequality in the UK and HR leaders urging that ethnicity pay gap data within different organisations should be compulsory to publish. Pay fairness was the focus of gender pay gap reporting introduced in 2018 and commentators call for this scrutiny to be applied to data behind race.

Equality is becoming more and more urgent on people’s agendas according to data from the spring 2020 edition of our UK Reward Management Survey. 36 per cent of respondents had started to look at their ethnicity pay gap data, whilst 36 per cent reported that they plan to investigate their data.

Our results also highlighted the other demographic data that organisations have started to consider – around the same levels of those already reviewing or planning to review their ethnicity pay gap data were also reviewing or planning to review age and disability data. Others reported that they were gathering data on sexual orientation and information such as whether the parents of employees accessed a university education, access to child benefits, etc, which can all drive employer awareness when it comes to evaluating to what extent they are promoting equal opportunities.

Mechanics involved

Whilst more corporate governance measures around reporting pay gaps are not yet mandatory, organisations are increasingly aware of the preparations they will need to make in order to reliably collect this information. We are receiving an increasing number of enquiries into how others are approaching this exercise. Many companies are in the process of examining government guidelines and the actual logistics involved in capturing the data, which is less straightforward than many initially might have thought it would be.

Organisations are exploring how they should categorise employees and how to analyse their data consistently. For example, some separate out ethnicity definitions into two groups: ‘white British’ and ‘other ethnicities’. Yet others will split out British ethnicity further into ‘white Irish’ etc; therefore inconsistencies may arise in the data collection process and many employers are asking how to categorise people demographics appropriately. The value of the exercise must be communicated across the organisation to ensure that people trust why they should provide this data and the inclusive culture employers are striving to build.

Keeping the momentum going

Organisations are increasingly trying to anticipate what is next in terms of holding themselves accountable for creating a fair culture. Transparency around diversity and inclusion practices within each organisation is a key reputational risk that must be carefully considered; customers, existing employees and prospective employees want to see progress.

Many companies are going ahead with reporting their gender pay gap data in spite of the government removing the requirement to, given the pandemic. This is in spite of the disproportionate impact of coronavirus on female progression being well documented. Even if the data shows slow progress for some employers who are incrementally closing the average pay gap, this sends a clear signal of dedication to improving year on year. Those that externally publish without the legal requirement to do so will undoubtedly be seen as taking the issues seriously and demonstrating a long-term commitment to fairness.

How are companies committing to diversity and inclusion?

When it comes to creating a culture committed to equality, this can impact a business’ bottom line by driving innovation and making an organisation more agile. The focus on diversity and inclusion is increasingly an area of innovation for businesses – an opportunity to differentiate their approach as highlighted by our UK Reward Management Survey.

Three ways to promote diversity and inclusion:

1. Review your employee value proposition: The EVP of a business can be bolstered by a strong commitment to diversity and inclusion. A diverse workplace is increasingly a factor talented job seekers look for ahead of applying. This is indicative of an innovative environment and an agile workplace that includes culturally and internationally diverse voices. This also signals a workplace that is driven by values such as inclusiveness that has a long-term impact on employee experience and drives down employee turnover levels.

2. Evaluate ethical practices: Equally, customers are increasingly looking at a business’ diversity and inclusion record and holding prospective and existing providers to account. Data and further information on diversity initiatives are increasingly requested in pitches and tenders as evidence of businesses adhering to high standards. This can form the foundation for long term, trusted client relationships. Diversity can also translate into a better customer experience, as the organisation is more representative of broader talent pools – offering fresh approaches, wider skill-sets and new perspectives.

3. Tailor your approach: All initiatives are designed to promote a sense of belonging at work and effect long-term cultural change. Diversity and inclusion initiatives can often be a mixture of short and long-term measures designed to bring about a step change in the organisation’s traditional approach, challenging ingrained processes and ways of thinking. Often there is no one size fits all approach and initiatives will be tailored to the requirements of the employees, but a long-term strategy is vital.

Get in touch

A commitment to diversity and inclusion can signal a business’ ability to remain agile and future-proof. Get in touch today to discuss how we can help shape your business’ commitment to fairness and ethical conduct.

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