CBI urges firms to reveal ethnicity pay gap

Companies with more than 250 employees should voluntarily publish their ethnicity pay gap data, in the same format as they already do for gender.

Bridge the Gap – a new CBI guide in collaboration with Eversheds Sutherland – urges firms not to wait for the Government to make ethnicity pay gap reporting mandatory and provides practical guidance on how to close their gaps.

The case for change is clear - embracing a wide range of talent is not just a matter of equality, it represents a real source of competitive advantage. Race equality across the UK labour market would result in a £24 billion boost to the economy per year (1.3% of UK GDP).

With the Parker and McGregor-Smith reviews underlining slow company progress to date, businesses must take urgent action to understand, report and close their ethnicity pay gaps.

Given there’s no one-size-fits-all approach to closing the ethnicity pay gap at work, Bridge the Gap recommends three areas where companies should focus their efforts:

1. Building inclusive company cultures where all employees feel confident to disclose their ethnicity;
2. Leading from the top to champion race equality across organisations and improving how they attract, hire and promote BAME employees;
3. Encouraging open, inclusive conversations about race at work.

Matthew Fell, CBI Chief UK Policy Director, said:

“Closing the UK’s ethnicity pay gap is about making our society fairer and overcoming inequality at work. Not only is it the right thing to do: the business case is watertight. Diverse companies are better companies.

“Firms already know that embracing a wide range of talent represents a real competitive advantage. Which is why they should not be waiting to act until legislation is introduced by Government.

“Companies who are already reporting their ethnicity pay gap understand what long-term, meaningful action they need to take to tackle race inequality at work. They are leading from the front - improving how they attract, hire and promote employees from ethnic minority backgrounds.

“But many companies have so much more they can and should be doing. Firms have to get better at speaking about race at work; developing campaigns to encourage employees to share their ethnicity; and creating strategies to improve BAME representation all the way up to the boardroom.

“Business can be a real force for good. But to build a fairer society, all of us business need to take action now. The CBI is committed to help companies learn from each other and make progress – until UK business is truly representative of the society it serves.”

Naeema Choudry, Partner and Equality Expert, Eversheds Sutherland, said:

“Eversheds Sutherland is delighted to have collaborated with the CBI on this guide and wholeheartedly supports its work in this important area.

“It is imperative for businesses to create the right environment for career advancement and development for all their employees – whatever their ethnicity. Ethnicity pay gap reporting is a key step in ensuring such progression, as it enables businesses to understand any ethnicity pay gaps that may exist and then to carefully consider what practical steps need to be taken to close them.

“This guide provides plenty of advice to organisations that are unsure of where to begin and much needed clarity on the support that’s available.”