Ethnicity Pay Reporting

Building an effective reporting strategy

Start preparing now

Taking positive action on workplace equality can have significant benefits for an organisation’s reputation, culture and people. Creating environments that recognise the importance of inclusion and diversity can support wider talent, brand and operational strategies and help to achieve key business outcomes.

Reporting requirements are a fundamental step on the journey to improving workplace equality. Our recent survey of over 100 companies, representing approximately 1 million UK employees, shows considerable progress since our last survey at the end of 2018. Two in three companies surveyed are now collecting data on ethnicity, with one in five of those surveyed now calculating their ethnicity pay gap, compared to 6% previously. Encouragingly reporting is also increasing, with almost half of businesses surveyed planning to disclose their ethnicity pay gap in the next three years and an additional 10% having already done so - up from 3% in 2018.This rise in reporting is promising but it is also important for organisations to prepare now for how they will meet future reporting requirements and use this opportunity to drive change and transparency in the workplace.

The primary goal of ethnicity pay reporting is to encourage greater employer action and accountability on the ethnic diversity of their workforce. Starting to tackle this now can drive real value for your workforce and our wider society. If the starting point is collecting data, the end point is not reporting, but acting on what this data tells you. Ultimately, ethnicity pay gap analysis is a tool to help identify where actions will have the biggest impact in driving sustainable change in the diversity of an organisation.

Key benefits of greater transparency include:

Opening up the dialogue with employees to understanding areas you may not have previously addressed and improving employee engagement
Improving the call to action to tackle diversity and develop practical action plans for improvement
Creating a baseline to benchmark current progress and drive continual improvement
Demonstrating your action and commitment as an employer and brand to improving your approach to diversity and inclusion

How should you prepare?

Collecting and analysing quality employee data on diversity in general and ethnicity in particular is a key part of building an effective diversity and inclusion strategy, as well as preparing for any mandatory reporting. But many organisations face challenges with how to go about this, especially since many do not currently request this data, or have poor response rate from employees.

Some of the common questions we’ve heard from clients around this issue include:

What data can I legally collect and how do I collect it?
How should I communicate with my employees to collect this data?
What impact will this have on my HR systems and processes?
How do I improve response rates?
Once I have the data, how should I analyse and report it?

Taking a proactive approach that consults and includes key stakeholders from across your organisation can help you navigate these challenges and get a head start on preparing for mandatory requirements.

Seeing this as an opportunity to build stronger relationships with your people and create an environment that embraces inclusion and diversity will have real benefits for your organisation’s reputation, talent and culture.

We’re helping clients build a proactive approach tailored to their organisation and workforce.