Ethnicity Pay Gap, reporting and taking action

With mandatory ethnicity pay gap reporting in the UK imminent, what can businesses do to make a start and how should they use the results?  Different organisations are at different stages of their journey a fact highlighted in PWC’s Ethnicity Pay Gap reporting 2020 survey; 23% of businesses surveyed are now calculating their ethnicity pay gap compared to 5% in 2018 and 10% are now voluntarily disclosing their ethnicity pay gap.

Pay gaps of all types are almost always a reflection of non-inclusive culture and go hand in hand with other symptoms such as low demographic disclosure rates, expensive talent attrition, low internal career progression and poor engagement levels.

Woman in office

Collecting and understanding your diversity or demographic data is hugely important as it provides valuable insight into where you are today, identifying barriers as well as opportunities to be more inclusive to ensure that you attract and retain the best talent.  Your data will highlight areas of disproportion amongst colleagues pay, zoom in on areas of potential bias and inequality, allow you to understand the scale of the challenge and demonstrate your public commitment to effect and measure change.

This essential starting point in changing a complex issue works just as well in small, large and global organisations.   It allows you to understand the real root causes of your ethnicity pay gap and means you can address them rather than just treating the symptoms.  The most common challenges to data collection relate to legal requirements and the capability of systems to collect and store the data so that meaningful reports and questions can be answered.

Gaining meaningful information from the raw data requires preparation, consistent processes and trust. Ensuring employees feel confident in sharing personal data is paramount which relies on creating a culture of trust. So what are the main things to incorporate when understanding your ethnicity pay gap.


Consider the questions you want your data to answer and check existing sources, you may have some of it recorded already for different purposes.   It is important that when asking sensitive questions, you are clear on your approach. This will ensure that you adhere to data protection law as well as increase the chances of your employees answering your questions honestly. 

Address topics such as:

  • Who will hold overall responsibility for the project?
  • Who will have access to the data?
  • How the data will be used?
  • How will you ensure confidentiality?
  • How you can guarantee the security of the data and that you are compliant with what is legally and culturally acceptable within each of the geographies you operate.
  • How the impact of new initiatives/policies/ activities will be monitored.

Collecting data

Consider your data collection template and reporting mechanism – in the absence of anything official an initial survey can be a good start point as it does not necessarily have to rely on your HR systems and can capture a specific part of the employee lifecycle.

Assessing the impact of circumstances rather than simply applying a ‘label’ to an employee dependent on a characteristic of their circumstance, e.g. ethnicity or disability, is a more involving approach for employees and results in a much higher level of engagement and disclosure.

  • Find out who wants to work for your organisation
  • Analyse if there are any characteristics more likely to leave the organisation
  • Understand if there are any trends associated with grievances, redundancies or dismissals
  • See who is represented at senior levels of the organisation
  • Get a snapshot of what your overall workforce looks like and how this may change
  • When conducting training (internally and externally) capture this information within the sign-up process.
  • Ask your third-party recruiters to introduce monitoring as part of their process. Not only is this a good way of monitoring their performance, it adds rich data for you to use internally


  • Ensure reporting is meaningful and leads to action
  • Be transparent in reporting both internally and externally
  • Introduce trend analysis so that change can be tracked and action plans adapted

Taking Action

With successful communication of your data collection and insight leading to an engaged workforce, an action plan of specific and achievable actions across all stakeholder groups are essential to making progress.   There is always a tendency to focus on doing something new however we recommend that you consider making changes to the way you already operate to embed inclusive practice and avoid initiatives that do not have long lasting impact.

Challenging and changing existing behaviours requires a continuous focus and most importantly of all, support at Board level.  Leadership behaviours dictate what is ‘acceptable behaviour’ to the whole of an organisation and without this there is little sustainable impact.

Employee network groups are also a great way to engage people within the organisation, amplify the voices of diverse talent and visibly commit to taking action. Allowing them to become properly funded, strategic partners with an established purpose and objectives will ensure collaboration and engagement across the organisation.

Inevitably, there will be a significant need for education and this will be at all levels of the organisation. It’s worth including leadership coaching, HR training and practice guidance, Recruiter and Hiring Manager awareness training and specific skills development for those involved in job design, competency assessment and employee development decision making.

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