Ethnicity pay gap

25 November 2018

This article was featured in the December 2018 / January 2019  issue of the magazine.

Danny Done, managing director at Portfolio Payroll, discusses the proposed reporting and how to improve ethnic diversity in the workplace 

As announced in October, the government has begun an open consultation on plans to make employers report on their ethnicity pay gap. Whilst this proposal is still in its formative stages, it is apparent that an added emphasis is being placed on improving the opportunities for black, asian and minority ethnic (BAME) individuals at work, with many commentators calling on employers to take a greater responsibility for this. 

Although the details remain under consideration, it has been suggested that the proposed ethnicity pay gap requirements will mirror that of the gender pay gap regulations. This means eligible employers can be expected to calculate the difference in pay between staff of different ethnicities and publish these figures online for the public to see. Employers have also been encouraged to sign up to the government’s new ‘Race At Work’ charter, committing to five main principles which are designed to improve the progression of minorities at work.  These principles include appointing an executive sponsor for race within the organisation and taking a zero tolerance approach to bullying from managerial staff. 

In light of these developments, employers are advised to review existing business practices with a view to amending them in order to enhance opportunities for ethnic minorities in their workforce.

One area with significant scope for positive change is recruitment. To guarantee they are taking an open and considered approach when recruiting, employers may review how they advertise available positions, making sure to use as many platforms as possible to guarantee a diverse range of applicants. 

...use a pre-determined checklist of required skills and expertise...


Employers may also consider introducing ‘blind recruitment’, whereby they automatically remove all personal identification information from job applications, such as names, which can often be an indication of racial or ethnic origin. This process should help avoid the existence of unconscious bias in the recruitment process and increase the chances of more BAME individuals reaching the interview stage.

During the interview process itself, employers should ensure multiple interviewers are present, wherever possible, to prevent any further bias in decision-making. Furthermore, employers should also avoid asking any unnecessary questions regarding a prospective employee’s race or ethnic background. 

When it comes to deciding who to hire, employers are advised to use a pre-determined checklist of required skills and expertise to make sure they are choosing the right person regardless of their race. However, when faced with two or more employees who are equally matched, it is lawful to select an applicant based on their race or ethnicity, providing their particular race or religion is underrepresented in the organisation. This is known as positive action. 

The culture of an organisation can also play an important role here and employers would do well to consider ways to actively promote diversity in their organisation. These efforts can range from introducing workplace policies on equality and diversity to educating staff on the dangers of workplace banter. 

Additionally, to get a more nuanced sense of the culture of their organisation, employers may look to conduct an employee survey. These can be used to get a true sense of individuals’ opinions on a variety of topics, including the level of support available to BAME staff. Where carried out appropriately, the survey responses can be used to improve the situation and make the workplace a more welcoming environment for all. 

Employers must also ensure BAME employees are protected from discrimination at work. As such, it is important that employers have clear and reliable grievance reporting methods in place, encouraging staff to disclose any incidents of bullying or harassment that they have suffered at work. 

Conscientious employers should also assess the risk of employees suffering abuse relating to their race or ethnicity at the hands of third parties. Although there is no legal obligation to do so, employers should really consider the detrimental impact that the actions of customers, or the general public, could have on the wellbeing of their employees, ensuring appropriate measures are in place to dissuade offensive behaviour.  

It has been said that a key motivator behind the proposed ethnicity pay gap reports is the concerning lack of BAME employees in senior managerial positions. With this in mind, employers should apply the same unbiased approach prescribed for recruitment when making decisions on internal promotions and pay rises. 

Employers should also consider the added benefit that a diverse management team can have on employee retention, as seeing individuals with similar characteristics to themselves can reassure talented employees that they can progress within the organisation, regardless of their race or ethnicity, and prevent any unwelcome departures. 

Ultimately, whilst it may go some way to alleviating the situation, the proposed ethnicity pay gap requirement cannot be expected to resolve the problems facing BAME employees singlehandedly. To achieve significant progress employers must not assume that a lack of diversity is simply a coincidence and, instead, examine how their existing practices may be contributing to this.