Two in five Black employees impacted by ethnicity pay gaps, study shows

Poll also reveals majority think employers must do more to address disparities, with most citing salary transparency as a key solution

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Two in five Black employees are affected by ethnicity pay gaps at their organisations, a study has found.

The research by Glassdoor, which looked at data from 2,000 employees in April this year, found that 43 per cent of Black employees had experienced a pay gap at their company, or believed it exists there.

In contrast, almost three in five (57 per cent) white workers thought there was no ethnicity pay gap at their company.

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Additionally, half (51 per cent) of Black employees said the pay gap had widened since the pandemic, compared to only a third (29 per cent) of white workers.

And two-thirds (66 per cent) of Black employees said their employer needed to do more to close the gap, but only two in five (40 per cent) white workers thought the same.

When considering what could be done to close the gap, almost three in five (57 per cent) of the Black employees polled believed the solution would be increased salary transparency. 

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Lauren Thomas, economist at Glassdoor, said that while inclusion and diversity has been prioritised in recent years, more needs to be done to achieve workplace equality. Increased transparency around inclusion and diversity can be a “powerful way to highlight progress and incentivise accountability”, she said.

“Ultimately, company investments in diversity and inclusion efforts are both a social good and a critical part of a company’s workforce management strategy – a particularly salient consideration at a time when finding and retaining talent is so difficult.”

Meanwhile, Nishi Mayor, business director at Business in the Community, called on the government to introduce mandatory ethnicity pay gap reporting, adding that Black employees clearly faced serious barriers in the workplace. “Employers need to examine their pay scales and look for where Black employees may be suffering from pay inequalities,” she said. “If the government can require companies to report their ethnicity pay gaps, we will start to see real change, with more businesses looking closely at their internal pay structures.”

Suki Sandhu, chief executive and founder of INvolve and Audeliss, agreed that honest and transparent measurements that create benchmarks for progress were critical, and cited ethnicity pay gap reporting as one vital tool. “While there is currently no legal mandate, businesses taking DEI seriously should be stepping up and reporting their ethnicity pay gaps,” he said. “We’ve seen how gender pay gap reporting has impacted representation for women; we need the same momentum for ethnically diverse employees.”

Charles Cotton, senior reward adviser for the CIPD, said ethnicity pay gap reporting can be an essential tool in exposing barriers that cause inequality and marginalisation. “If pay differences do exist, then organisations should explore what is causing these gaps and what steps can be taken to reduce their size.”

Employers should also work with staff, and their representatives, to explain what they are doing, and how staff can get involved. “Employers should also consider how they will communicate their findings and possible action plans, both with employees and external stakeholders, such as investors,” he said.