A potential triple win for business

Sandra Kerr OBE, Business in the Community Race Equality Director, welcomes and shares her thoughts on the Fawcett Society research launched today. 

I welcome the Fawcett Society research into ethnicity pay gaps.  This paper sets out the complex picture of gender, ethnicity and pay and the trends over the last 20 years.  It also reinforces that a one-size-fits-all approach to tackling inequality in the labour market will not work.   Employers also need to bear this in mind as they seek to take forward the recommendations from the McGregor-Smith Review to collect and publish data on the ethnicity and pay bands of their workforce.

Last year a study by the Trades Union Congress (TUC) showed that black employees with degrees earned an average of £4.30 less per hour than their white equivalents earned for the same amount of work.  We can see from this data that, for some minority ethnic groups, pay gaps start at the very beginning of their careers.

I welcome the recommendations in the McGregor-Smith Review into Race in the Workplace that call on employers to take action on the ethnicity and pay including the following recommendations:

  • Publicly available data: Listed companies and all businesses and public bodies with more than 50 employees should publish a breakdown of employees by race and pay band.
  • Government legislation: Government should legislate to ensure that all listed companies and businesses employing more than 50 people publish workforce data broken down by race and pay band.

From Race at the Top 2014 we know that although 1 in 10 employed people are from a BAME background, only 1 in 16 senior management positions and 1 in 13 management positions are held by ethnic minorities. The findings also showed that between 2007 and 2012 the share of BAME employees in top management positions increased by just 0.5%. 

Our Race at Work 2015 research highlighted how important career progression is to BAME employees.

There are complex organisational and structural issues for employers to tackle such as ‘internal’ occupational segregation. Ensuring fair and equal access to key roles and opportunities which often are in central and head office functions that often attract the highest performance appraisal assessments - which in turn impacts on pay.

Of course, the call to action for employer is to voluntarily publish this information on race and pay band.  However, if employers are slow to take action on the recommendations, legislation has to be the next step because we know that organisations with more diverse senior executive teams and employees have 35% better financial returns.  1 

Following the recent government review into race in the workplace, we know that there is a potential £24bn boost to the economy, which can be achieved by business commiting to race equality in their organisations.  Actions employers should take include, ensuring there is no bias in their recruitment processes, tracking the speed of career progression and promotion for all of their talented employees and taking action on pay inequality for gender and race.

We are delighted to be taking forward the recommendation in this review for a Best 100 Employer in the UK Listing. Taking action on racial and pay inequality is good for business, good for the economy and good for the employee – a potential triple win.

 

1 Diversity Matters:  Mckinsey, February 2015