In the UK, under new legislation proposed in the King’s Speech, employers will soon have to expand their pay gap reporting to ethnicity and disability. But building a global picture can be complex, as Aniela Unguresan explains.
In the evolving landscape of diversity, equity, and inclusion (DEI), organisations face a difficult balance between the need for comprehensive data and varying international regulations.
With an Equality (Race and Disability) Bill announced in the new government’s first King’s Speech, ethnicity and disability pay gap reporting will become requirements for larger employers and no longer just a “nice to have”.
Collecting data across global borders, which some employers may seek to do, can be challenging. But while some countries restrict the collection of ethnicity data, this should not impede progress towards workplace equity.
Pay gap reporting
A recent analysis of DEI policies in 20 countries by EquiNations found a complex tapestry. From expanding parental leave allowances to gender pay gap reporting mandates, global organisations must navigate diverse regulatory environments.
However, these variations should not be viewed as obstacles, but as opportunities to innovate in DE&I practices. Indeed, with true commitment, international organisations can find ways to gather the necessary data and insights to advance DE&I efforts whilst still respecting local laws.
Intersectional approach
When discussing pay transparency and pay equity, the focus so far has often been on the gender pay gap. Companies trying to reach DEI maturity, however, need to be adopting an intersectional approach, exploring all facets of employee identity and examining how these may be contributing to their workplace experience.
Ethnicity is an important consideration when examining disparities through an intersectional lens, as ethnicity pay gaps are pervasive across the globe. According to the Office for National Statistics, Black, African, Caribbean or Black British employees earned a median hourly rate of £13.53 in 2022, while white employees earned £14.35. Mixed ethnicity (White and Black Caribbean) employees earned the lowest median hourly rate, of £11.75.
Leaders, DEI and HR teams must avoid the trap of only considering that equal pay for equivalent work is equitable; true equity requires equal representation across organisations.
Promotion and progression
To ensure there are equal progression opportunities for diverse talent, all workflows must be examined beyond diversity hiring quotas, extending to progression and retention.
A study by the European Network Against Racism (ENAR) into structural racism at work found that ethnic minorities were over-represented in what are deemed ‘less desirable’ jobs that were considered low-skill, low-paid, and temporary, in various European countries including France and Germany.
More recently, the TUC revealed that one in six ethnic minority workers are in insecure jobs, compared to one in nine white employees.
Ethnicity data should be collected and used as a vital tool for identifying these key gaps and inequities in pay, representation, and job seniority/progression.
For example, organisations should be examining how many ethnic minority employees there are across all levels, or any pay gaps in which minority employees are being paid less than their white counterparts, to paint a more accurate picture.
Accelerating change
This is where data becomes indispensable. Harnessing the right data and analysing it enables us to better understand our organisation and use meaningful insight to take the necessary actions to accelerate change and unlock the competitive advantages that a diverse workforce offers.
Due to legal restrictions in certain countries, the collection of ethnicity data can be challenging. International organisations will often need a global multi-market DEI plan that recognises the restrictions and compliance challenges in certain localities and is adaptable for each market to capture the data required.
Differing data collection laws across the world must not be used as an excuse for not putting in the work.
International organisations that operate in European countries such as Austria, Belgium, France, and Germany may be familiar with laws which forbid the collection of ethnicity data.
These regulations are in place to mitigate the risk of discrimination and safeguard the privacy of individuals. Nevertheless, where there are clear pay disparities and inequalities, we must act, and ethnicity data can be key to identifying and addressing any inequities that may exist.
No excuse
Differing data collection laws across the world must not be used as an excuse for not putting in the work. With true commitment, organisations can find ways to gather the necessary data and insights to advance DEI efforts while still respecting local jurisdictions.
An effective way to gather this data is through voluntary, opt-in surveys. This encourages employees to volunteer the information themselves, which therefore does not breach any EU laws.
New approaches can be used to maximise the number of employees taking part, such as using QR codes in a range of locations within workplace buildings to promote engagement and quick and easy contribution.
Employee participation is essential for successful data collection, as without it, can be a challenge to develop effective DEI strategies.
Organisations must clearly communicate the importance of this data and foster a culture of trust to encourage open and honest contributions.
How to build employee input
Ultimately, breaking down barriers and addressing inequities requires a collaborative effort from both leadership and employees. A top-down approach alone is insufficient; genuine progress depends on a strong bottom-up commitment as well.
Navigating these changes requires the implementation of impactful actions, such as:
- An authentic policy on equal pay that measures and addresses unexplained pay gaps.
- A way to lead the company towards embracing an intersectional approach, allowing it to understand how various criteria intersect pay discrepancies.
- A clear remediation strategy to build an equal talent pipeline.
- Transparent communication, fostering conversation around pay equity.
- Ways to empower line managers to facilitate constructive conversations on pay equity.
There is still much work to be done to create equitable workplaces in our rapidly evolving global society.
Research has proven that making conscious decisions around pay gaps can deliver a proven competitive advantage. While we may be experiencing a noticeable shift in addressing quotas around the gender pay gap, it could only be a matter of time before quotas around ethnicity and other pay gaps are implemented.
An intersectional approach to DE&I will help future-proof your organisation and ease changes to reporting and compliance as it evolves.
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