{"id":2492,"date":"2021-10-21T14:58:23","date_gmt":"2021-10-21T06:58:23","guid":{"rendered":"https:\/\/www.pacificprime.co.uk\/blog\/?p=2492"},"modified":"2021-10-21T15:36:43","modified_gmt":"2021-10-21T07:36:43","slug":"ethnicity-pay-gap-reporting-a-guide-for-employers-in-the-uk","status":"publish","type":"post","link":"https:\/\/www.pacificprime.co.uk\/blog\/ethnicity-pay-gap-reporting-a-guide-for-employers-in-the-uk\/","title":{"rendered":"Ethnicity pay gap reporting: A guide for employers in the UK"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Did you know that only 13 of the UK\u2019s top 100 listed companies report their ethnicity pay gap? In the era of movements like Black Lives Matter and #MeToo, these figures (and unequal pay in the workplace) have led the <\/span><a href=\"https:\/\/www.cipd.co.uk\/about\/media\/press\/150921ethnicity-pay-reporting-mandatory#gref\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Chartered Institute of Personnel and Development (CIPD) to call for a mandatory ethnicity pay gap reporting<\/span><\/a><span style=\"font-weight: 400;\"> (similar to the rules in place for mandatory gender pay gap reporting) to apply to all large employers from April 2023. To stay one step ahead of the curve, this <\/span><a href=\"https:\/\/www.pacificprime.co.uk\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Pacific Prime UK<\/span><\/a><span style=\"font-weight: 400;\"> article is your guide to the what, why and how of ethnicity pay gap reporting.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><div class='code-block code-block-4' style='margin: 8px 0; clear: both;'>\n<p><a href=\"https:\/\/www.pacificprime.com\/assets\/pdf\/PP%20Brochure%20-%20Corporate%20(Web).pdf?campSource=PPUK-Blog&utm_source=blog&utm_medium=content_banner&utm_campaign=banner&utm_content=corporate\" target=\"_blank\" rel=\"noopener\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-775\" src=\"https:\/\/i0.wp.com\/www.pacificprime.co.uk\/blog\/wp-content\/uploads\/2020\/02\/PPUK-blog-banners-1138x493-px_02-07.jpg?resize=700%2C303&#038;ssl=1\" alt=\"Corporate insurance banner\" width=\"700\" height=\"303\" \/><\/a><\/p><\/div>\n<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Defining ethnicity pay gap reporting<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">In simple terms, ethnicity pay gap reporting is when employers publish data about their employees\u2019 pay across different ethnicities so that assessments can be made on fairness and equality. At present, the lack of legislation means that UK employers have flexibility on what to include in their voluntary ethnicity pay reports, and it\u2019s challenging to make any meaningful cross-employer and cross-sector comparison. In the absence of legislation, the CIPD has recommended that ethnicity pay gap reports should have the following components:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Uniform statistics to report pay by ethnicity (please see <\/span><a href=\"https:\/\/www.cipd.co.uk\/Images\/cipd-ethnicity-pay-reporting-guide_tcm18-100551.pdf\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">page 8 of the CIPD report<\/span><\/a><span style=\"font-weight: 400;\"> for further details)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Explanation of the nature and causation of any pay differentials<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Action plan of initiatives defined to reduce and remove any such gaps over time<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Why ethnicity pay gap reporting is important\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">In a multicultural society like the UK, fair and equal pay across ethnicities is what employers should strive towards from a moral perspective. As Peter Cheese, chief executive of the CIPD, <\/span><a href=\"https:\/\/www.cipd.co.uk\/about\/media\/press\/150921ethnicity-pay-reporting-mandatory#gref\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">said in a press release<\/span><\/a><span style=\"font-weight: 400;\">:\u00a0<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">\u201cMandatory reporting of data, and the associated narrative that shows understanding of the data and the actions being taken to improve, for both ethnicity and gender pay, will help create fairer workplaces and societies and kickstart real change.\u201d\u00a0<\/span><\/p>\n<p>&nbsp;<\/p><\/blockquote>\n<p><span style=\"font-weight: 400;\">He also added that the gender pay gap reporting has driven greater transparency and accelerated progress, and that the same is needed for ethnicity pay reporting. This is an urgent matter in the COVID-19 context, which has <\/span><a href=\"https:\/\/www.theguardian.com\/commentisfree\/2020\/apr\/20\/coronavirus-racial-inequality-uk-housing-employment-health-bame-covid-19\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">highlighted growing racial inequalities.<\/span><\/a><\/p>\n<h3><span style=\"font-weight: 400;\">Benefits of ethnicity pay gap reporting for employers<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">While the moral case is strong, employers should know that mandatory ethnicity pay gap reporting, and the increased fairness and equality across ethnicities that follows, will reap a number of tangible benefits. Here are some of them:<\/span><\/p>\n<h3>1. Talent attraction (and retention)<\/h3>\n<p><span style=\"font-weight: 400;\">Talented employees from both ethnic and non-ethnic minority backgrounds will be attracted to (and more likely to remain at) organisations that conduct mandatory ethnic pay gap reporting, and prioritise fairness and equality in the workplace. This drives value-driven outcomes for the organisation and lower costs associated with a high turnover rate.<\/span><\/p>\n<h3>2. Employee wellbeing<\/h3>\n<p><span style=\"font-weight: 400;\">As a by-product of prioritising fairness and equality in the workplace, employees of all backgrounds will feel welcomed and valued. In contrast to a toxic workplace, this will lead to happier and healthier employees. As we know, employees\u2019 state of mind has direct correlation to their motivation and productivity levels, which ultimately benefits the organisation.\u00a0<\/span><\/p>\n<h3>3. Collaboration and innovation<\/h3>\n<p><span style=\"font-weight: 400;\">Employees of different backgrounds working collaboratively results in exchange of unique ideas and perspectives, which is an environment that is conducive to innovation. Given that an organisation\u2019s customers are likely to be diverse, having a diverse team working together can prevent and avoid PR disasters based on distasteful messaging.\u00a0<\/span><\/p>\n<p><strong>Bonus:<\/strong><span style=\"font-weight: 400;\"> What\u2019s more, prioritising ethnicity pay gap reporting before any mandatory legislation comes in place will also help employers stay ahead of the curve and put them in the league of forward-thinking organisations.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">6 tips for ethnicity pay gap reporting\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">If you\u2019re convinced that pay fairness is the way to go, here are 6 tips to conduct ethnicity pay gap reporting like a pro. Based on CIPD guidelines, these tips are designed to maximise the opportunities and minimise the challenges of ethnicity pay gap reporting:<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">1. Conduct ethnicity pay gap reporting in tandem with gender pay gap reporting, but recognise the differences between the two\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">It makes sense to conduct ethnicity pay gap reporting as an extension of existing gender pay gap regulations for efficiency purposes. This means using the same statistics, definitions and timeline of data collection and reporting. That being said, there are differences between the two, most notably that a larger number of categories will be required beyond the male\/female groupings on gender.\u00a0\u00a0\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">2. Don\u2019t overlook ethnic representation when conducting ethnicity pay gap reporting\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">In addition to the difference in pay between ethnicities in the same type of role, it\u2019s also vital to consider ethnic representation in each type of role. This is because there is underrepresentation of ethnic minorities (compared with white employees) in senior management roles, and overrepresentations in low paid roles. As such, employers should also report on their ethnicity group representation breakdowns in each quartile, as well as their pay gaps by quartiles.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">3. Stick to two metrics to avoid overcomplication, and prioritise simplicity and clarity<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">While there are many metrics that can be used (please see <\/span><a href=\"https:\/\/www.cipd.co.uk\/Images\/cipd-ethnicity-pay-reporting-guide_tcm18-100551.pdf\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">page 8 of the CIPD report<\/span><\/a><span style=\"font-weight: 400;\"> for further details) to report on the ethnicity pay gap, focusing on two key metrics is a good idea to avoid overcomplication. Moreover, doing so will also ensure that the organisation doesn\u2019t lose sight of the narrative and action plan. The following two metrics should be used: \u201cmedian ethnicity pay gap\u201d and \u201cmean ethnicity pay gap\u201d.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">4.\u00a0 Use the data to come up with measurable solutions and focus on taking action\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">While data collections and analysis can provide valuable insight in their own right, they need to be accompanied by effective actions to address any ethnicity pay gaps. Given this, narrative reports to explain pay gaps and action plans designed to close them are just as important as the data itself. The focus should remain on using the data to come up with solutions, whereby the end-goal can be measured.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">5. Continually evaluate and optimise the approach to ethnicity pay gap reporting<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Employers may have vastly different amounts of experience in and resources to conduct ethnicity pay gap reporting and address any ethnicity pay gaps. It\u2019s important to understand that change won\u2019t occur overnight, but will take sustained actions over a number of years. In light of this, employers should begin wherever they can, as well as continually evaluate and optimise their approach.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">6. Minimise administrative work for HR teams, but not at the expense of a meaningful analysis\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">At the end of the day, employers\u2019 ethnicity pay gap reporting efforts should minimise administrative work for HR teams through a report that is simple, clear and easy-to-produce. Simultaneously, the report should also be sufficiently detailed and meaningful to highlight the exact location and nature of any gaps, and indicate how they have been caused and how they might be closed.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Employee benefits for a diverse and inclusive workforce<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">As we\u2019re heading towards a workforce that is increasingly diverse and inclusive, traditional, one-size-fits-all employee benefits will soon become obsolete and flex(ible) benefits will become highly coveted. Unlike traditional benefits, which may or may not align with employee needs and wants, flex benefits allow employers to offer a variety of benefit options for employees to create a customised benefits plan.<\/span><\/p>\n<p><strong>Further reading:<\/strong><span style=\"font-weight: 400;\"> To learn more about all things flex, check out <\/span><a href=\"https:\/\/www.pacificprime.com\/blog\/the-complete-guide-to-flexible-benefits.html\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">the complete guide to flexible benefits.\u00a0<\/span><\/a><\/p>\n<h2><span style=\"font-weight: 400;\">Get in touch with Pacific Prime UK today!<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">As a global health insurance brokerage and employee benefits specialist, <\/span><a href=\"https:\/\/www.pacificprime.co.uk\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Pacific Prime UK<\/span><\/a><span style=\"font-weight: 400;\"> understands the value of diversity and inclusivity goals in the workplace, and has over two decades of experience helping companies of all sizes and industries design and implement the right <\/span><a href=\"https:\/\/www.pacificprime.co.uk\/plans\/corporate\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">corporate insurance<\/span><\/a><span style=\"font-weight: 400;\"> and <\/span><a href=\"https:\/\/www.pacificprime.co.uk\/employee-benefits\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">employee benefits<\/span><\/a><span style=\"font-weight: 400;\"> solutions to align with their organisational goals.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To learn more about our <\/span><a href=\"https:\/\/www.pacificprime.com\/corporate\/approach\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">tailored, technology-driven approach<\/span><\/a><span style=\"font-weight: 400;\"> and <\/span><a href=\"https:\/\/www.pacificprime.com\/corporate\/company-insurance-solutions\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">wide range of solutions <\/span><\/a><span style=\"font-weight: 400;\">(including flex benefits), please <\/span><a href=\"https:\/\/www.pacificprime.com\/corporate\/contact-us\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">arrange a free consultation<\/span><\/a><span style=\"font-weight: 400;\"> with a member of our corporate team today!<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><div class='code-block code-block-7' style='margin: 8px 0; clear: both;'>\n<p><a href=\"https:\/\/www.pacificprime.com\/corporate\/?campSource=PPUK-Blog&utm_source=blog&utm_medium=cta_banner&utm_campaign=banner&utm_content=corporate\" target=\"_blank\" rel=\"noopener\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-780\" src=\"https:\/\/i0.wp.com\/www.pacificprime.sg\/blog\/wp-content\/uploads\/2019\/06\/PPSG_Bus_01.jpg?resize=700%2C303&#038;ssl=1\" alt=\"Business Insurance banner\" width=\"700\" height=\"303\" \/><\/a><\/p><\/div>\n<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Did you know that only 13 of the UK\u2019s top 100 listed companies report their ethnicity pay gap? In the era of movements like Black Lives Matter and #MeToo, these figures (and unequal pay in the workplace) have led the Chartered Institute of Personnel and Development (CIPD) to call for a mandatory ethnicity pay gap &#8230;<\/p>\n","protected":false},"author":21,"featured_media":2493,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false,"_links_to":"","_links_to_target":""},"categories":[6],"tags":[765,1607,766,1599,630,1291,1605,1606,1454],"class_list":["post-2492","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-ban_cor","tag-cipd","tag-cta_cor","tag-diversity-and-inclusivity","tag-employee-benefits","tag-employee-wellbeing","tag-ethnicity-pay-gap","tag-ethnicity-pay-gap-reporting","tag-uk"],"acf":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.pacificprime.co.uk\/blog\/wp-content\/uploads\/2021\/10\/pay_gap.png?fit=1140%2C495&ssl=1","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pcnTsc-Ec","amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.pacificprime.co.uk\/blog\/wp-json\/wp\/v2\/posts\/2492","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pacificprime.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pacificprime.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pacificprime.co.uk\/blog\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pacificprime.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=2492"}],"version-history":[{"count":1,"href":"https:\/\/www.pacificprime.co.uk\/blog\/wp-json\/wp\/v2\/posts\/2492\/revisions"}],"predecessor-version":[{"id":2494,"href":"https:\/\/www.pacificprime.co.uk\/blog\/wp-json\/wp\/v2\/posts\/2492\/revisions\/2494"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pacificprime.co.uk\/blog\/wp-json\/wp\/v2\/media\/2493"}],"wp:attachment":[{"href":"https:\/\/www.pacificprime.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=2492"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pacificprime.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=2492"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pacificprime.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=2492"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}