Ethnic minority managers face pay gap of more than £4,000, analysis reveals

Data shows managers with Chinese backgrounds are most adversely affected, as charity calls for introduction of mandatory reporting

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Employees from ethnic minority groups experience steep pay gaps in management roles, with some exceeding £4,000 per year, research has found.

Analysis of previous Business in the Community (BITC) Race at Work surveys revealed that managers with Black African, Chinese, Indian, mixed race, Pakistani and Bangladeshi backgrounds encounter higher pay gaps than employees with other ethnic backgrounds.

The research found that managers with a Chinese background faced the biggest average annual pay gap of £5,911, and received a median annual gross income of £22,500.

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While acknowledging that some organisations were speaking up and leading the way by taking action on ethnicity pay disparity, Dr Jummy Okoya, associate programme leader at the University of East London, said: “Most organisations do not prioritise the issue because the ethnicity pay gap isn't made compulsory. Therefore, it's not considered an urgent priority, or for some, the issue is completely missing from the list of priorities.”

“Many are in the dreamland of hosting diversity and inclusion events and feeling proud that they’ve got D&I sorted,” Okoya said, adding that “moving beyond diversity by putting a focus on equity of pay and experience for minority groups is the starting point for eradicating the ethnicity pay gap”.

The data showed that managers with a Pakistani or Bangladeshi background saw an average annual pay gap of £4,186, and a median annual gross income of £17,500, while managers with a Black African background were facing an average annual pay gap of £2,134, and a median annual gross income of £32,500.

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Managers with an Indian background in turn identified an average annual pay gap of £1,170, and a median annual gross income of £22,500, this was followed by managers with a mixed background who faced an average annual pay gap of £1,164, and a median annual gross income of £27,500.

With the cost of living crisis adding more financial pressure, BITC has urged employers to ensure equal pay and to eliminate ethnicity pay gaps in jobs across all levels of the organisation.

Sandra Kerr, race director at BITC, said the charity had been calling for the government to introduce mandatory ethnicity pay gap reporting and take action to address unacceptable pay gaps.

“If the government doesn’t make reporting mandatory, and we rely on voluntary action, our research shows that we could be waiting until 2075 for the UK’s true ethnicity pay gap to be known,” Kerr said.

Echoing this, Suki Sandhu, CEO and founder of INvolve and Audeliss, said that while there was currently no legal mandate, businesses taking EDI seriously should be stepping up and reporting their ethnicity pay gaps.

“In fact, INvolve recently found that 95 per cent of employees are willing to share the data needed for companies to report on their ethnicity pay gaps, which is incredibly encouraging and suggests a real appetite for change and transparency across businesses,” Sandhu said, adding that “we’ve seen how gender pay gap reporting has impacted representation for women, we need the same momentum for ethnically diverse employees”.

Additionally, the CIPD has also outlined as part of its guide for UK employers on ethnicity pay reporting that in the absence of legislation, “employers should aim to voluntarily compile ethnicity pay reports as part of their organisation’s approach to improve inclusion and tackle inequality in the workplace”.