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Pay gap reporting and targets for leaders vital to BAME workforce equality

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  • 23/06/2020
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Pay gap reporting and targets for leaders vital to BAME workforce equality
Fully integrating equality for Black, Asian and Minority Ethnic (BAME) people into the workforce could boost the UK economy by £24bn a year, but significant measures by government and businesses will be needed to succeed.

 

Speakers at the Westminster Employment Forum BAME equality in the workplace event highlighted that while there was talent everywhere in minority communities, the opportunities to progress in careers were not.

They argued that strong measures such as mandatory pay gap reporting, setting targets and holding leadership accountable were among the key items needed to stop businesses “looking like a glass of Guinness – black on the bottom and white on the top”.

Equality and Human Rights Commission (EHRC) chairman David Isaac said he and the organisation strongly supported the calls for mandatory ethnicity pay gap reporting, as is already in place for gender pay differences – and that it should be for smaller firms with over 50 employees, not just larger ones.

“We hope this will be part of the recommendations from the prime minister’s inequality commission,” he said.

“It’s not just about headline pay, it’s about recruitment, retention and promotion.

“Only three per cent of organisations actively analyse their data to see pay and progression differences,” he added.

Isaac also noted that while the limited data at present showed a pay gap of only 3.8 per cent, it was important to breakdown the ethnic groupings to see where the major differences lay.

“This is a once in a generation opportunity to resolve this issue, we do need action,” he concluded.

 

Embedded discrimination exposed

Sandra Kerr race equality director of Business in the Community agreed that, aside from the obvious moral necessity for equality, there was also a clear business case for promoting non-white people into senior positions.

She highlighted that organisations with ethnically diverse leadership perform 33 per cent better than peers.

And the embedded discrimination within society and workplaces had been exposed during the coronavirus crisis: “When the UK was saying it had returned to normality, BAME people were unemployed,” she said.

“We are pushing for tangible change. Pay gap reporting will ensure that a conversation will happen at the top table at least once a year. I don’t think there’s any reasons for anyone to hide from this.

“Objectives should be linked to remuneration, it’s fascinating how these things move when they are linked to pay and reward,” she added.

 

NatWest engaging people

Two major organisations explained how they had integrated goals to increase the representation of non-white people within their businesses at all levels – NatWest and KPMG.

Karen Flynn Macfarlane, colleague experience lead for ethnicity at Natwest said the lender, which is part of Royal Bank of Scotland, felt it was “important” to report its ethnic pay gap on annual reports and its website.

“We have a positive action plan in place and targets. That’s tied to performance.”

And when engaging the wider workforce, she said while buy-in from the top was important, the message had to come from multiple sources, it cannot just be human resources teams.

It must involve employee groups, working groups, networking groups and other ways that allow people to talk about those issues and feed them up to managers.

“Working with trade unions and unions within the banks is important, they are a critical part of it,” she continued.

“If you’re finding it hard to build traction and get responses from staff then you may realise you have wider problems in the workplace culture. Employers need to learn from it and share with other employees within the organisation.”

Macfarlane highlighted that employers needed to deal with complaints fairly.

“Don’t give the impression there will be come backs on complainants. They must ask what organisations can do to change their behaviour, not decide that BAME employees need to change themselves,” she added.

 

Hold leadership accountable

KPMG partner Richard Iferenta explained one way in which the consulting firm had addressed the situation.

“We set targets for black recruitment out of university,” he said.

“When we realised we were not on course to meet it we created a specific initiative, we didn’t reduce the target.

“If you have targets that are signed off by leadership of the business and hold them accountable you should meet your objectives.

“In all instances setting targets will help you to get there provided you hold leadership accountable,” he added.

However, despite positive action like this, data analysed by Dr Doyin Atewologun, lead academic adviser for the Parker Review, showed progress was painfully slow.

“There is limited or no progress in setting or meeting ethnic diversity objectives among the UK’s major firms,” she said.

Of the FTSE100 only 13 per cent of companies were doing so, while in the FTSE350 this figure remained stubbornly low at just two per cent.

 

How fair is recruitment?

Along with using employee networks and giving employees a greater voice, the issue of recruitment and interviews is a key block to ethnic minorities progressing in the workplace.

Bernadette Thompson, deputy director inclusion, wellbeing and public appointments people capabilities and change directorate at the Ministry of Housing, Communities and Local Government (MHCLG) asked “How fair is the recruitment process?”

She continued: “Businesses are like a Guinness glass – black on the bottom and white on the top. Let’s shake that up.”

“We must have ethnic diversity at interview panels, for every recruit we should have someone of colour at the panel. It’s the same argument as gender, so I don’t know why we are debating it.

“Interview questions are just not fit for purpose.”

She added that unconscious bias training should be mandatory around recruitment.

“We should be increasing people’s awareness around how people from different backgrounds may respond differently. That doesn’t mean it’s a worse [answer] than others,” she added.

With the high profile of these racism and discrimination currently, the window for change is open now, but it could easily be shut if the opportunity is not taken or blocked.

Rob Neil, head of embedding culture change at the Department for Education, highlighted that this must not be allowed to happen.

“Talent is everywhere, opportunity is not. The data is everywhere that workplaces are not an accurate representation,” he said.

“We have been here before though and most of the debate is a distraction. The real indicators are how many people of BAME are recruited into top roles.

“We didn’t get here by accident. We are going to have to work our way out of it. Employee networks should not just be involved but be in the room when people are interviewed.”

Neil added that plans should be made “so the accountability is baked in”.

Concluding the event, Dawn Butler, Labour MP for Brent Central, said there was no need for the prime minister’s newly announced commission, calling it “unnecessary” as so many reviews and investigations had been conducted previously.

“Read the [previous] reports and start actioning them, that’s what will dismantle the racism,” she said.

 

 

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