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Businesses must build ‘trusting cultures’ to ensure ethnicity pay reporting succeeds

16 May 2019 By Maggie Baska

Experts at CIPD Diversity and Inclusion Conference share concerns and challenges over poor rates of disclosure, with legislation expected soon 

Building a culture of trust and belonging are just as important as the ability to crunch the numbers when it comes to ethnicity pay gap reporting, according to experts at the CIPD Diversity and Inclusion Conference. 

While many HR departments are expected to find it challenging to gather critical information around ethnicity, speakers told delegates that gaining employee trust was vital to fulfilling mandatory reporting obligations, which are expected to come into force soon.

Pauline Miller (pictured centre), head of talent development and inclusion at Lloyd's of London, encouraged senior business leaders – especially those who identify as black, Asian and minority ethnicity (BAME) – to speak about their own experiences of sharing their ethnicity data. 

She explained that the rate of disclosure around ethnicity at the insurer was relatively high, but that the real challenge was the “huge number” who preferred not to identify their ethnicity.



Miller added it was critical to get the message out that collecting data was not just about statutory requirements but also about supporting employees. 

“What I think will send a really critical message is making sure you talk to employees, let them tell you who they are,” Miller said. “[It’s] not necessarily them telling you something so you can meet your statutory requirement down the line. Because I’m telling you now, I wouldn’t give that data if it was just for a statutory requirement  I’ve got to know you’ll do something about it.” 

The introduction of mandatory ethnicity pay gap reporting has been widely anticipated since the government closed its consultation on the specifics of reporting in January. Prime minister Theresa May gave her backing to the concept when the consultation was launched in October 2018. 

But while ethnicity is viewed as an even more significant factor in determining pay than gender, it is also more complex to calculate and information on race is not routinely collected by many businesses.

Dawn Moore (pictured left), director of human resources for construction firm Morgan Sindall, said her business had already undertaken a test run of reporting on its ethnicity pay gap. 

While she did not share the size of the gap, she said one of the biggest challenges was that the non-declaration rate around ethnicity was usually high for a sector she described as “normally very forthright”. 

“When we got to our ethnicity data, or lack of it, it really made us question our culture,” Moore said. “Why was it that people felt they couldn’t tell us? Is it because they couldn’t identify with a particular group, or was the type of categories we were using wrong? Was there a different way of collecting data that would work better?” 

Many HR professionals have also raised concerns about how they would collect the ethnicity data required for reporting. A study published last year by the Equality and Human Rights Commission found more than half (51 per cent) of employers felt they face barriers when collecting ethnicity data, which in turn meant they would face problems calculating their pay gap.

The same report found a third (32 per cent) felt collecting ethnicity data was “too intrusive”, while 27 per cent thought their employees did not want to share the information.

Speaking at the event yesterday, Moore said previous employee surveys revealed many workers felt uncomfortable talking to their line managers about ethnicity, with one reason being that the language and behaviours around diversity did not “reflect what made them comfortable”. 

“As a result of that, we said they [employees] needed to help us because we clearly are getting it wrong. We’re not going to change overnight – but help us get the right terminology,” Moore said.

“And we’re started to use that when we look at things like ethnicity pay gap and categories. Your employees can give you great feedback on the types of things they identify with as a group, and I think you can’t underestimate that.” 

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