Only a third of managers are taking action in relation to ethnicity pay gap reporting or developing an action plan to improve inclusion of people from different ethnic groups, the Chartered Management Institute (CMI) has found.
The Institute, which is among the bodies calling on the government to act on its pledge to introduce mandatory ethnicity pay gap reporting, said that organisations should be embracing management and leadership training to promote diversity and inclusion, which it believes will in turn create more equitable pay structures and provide better working environments for non-white employees.
Forty-three per cent of the 857 managers who responded to the CMI’s poll in October said their senior management teams had no staff from diverse ethnic groups, an only 47% said their organisation was actively increasing the proportion of employees from different ethnic backgrounds through their recruitment practices.
Chief executive Ann Francke said the survey results made it clear that not enough firms are taking action to improve diversity.
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“The evidence is clear, businesses that are truly more inclusive and representative are more productive organisations,” she said, citing recent CMI analysis that found full ethnic minority representation could contribute an additional £24bn to the UK’s GDP.
“We’re certain that the government’s ambition of building back better will ring hollow if the ethnicity pay gap continues to be ignored.
“The government has quite rightly mandated gender pay gap reporting for large organisations. There is no excuse for not introducing similar requirements around the ethnicity pay gap. If we are to see a levelled up, stronger and more resilient economy we need to ensure our workforces are as inclusive as possible.”
In September, business minister Paul Scully admitted that establishing a framework for mandatory ethnicity pay gap reporting is complex, as the data is not binary and there are challenges with anonymity and data collection.
He said: “The key to that is determining what it makes sense to report on and what use the data can be put to. It’s far from straightforward.”
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