Why ethnicity pay gap reporting holds intrinsic value for businesses

30 Jul 2020 By Saskia Bewley

Saskia Bewley explains how publishing data has helped her company start to drive meaningful change, and shares tips for organisations that want to follow suit

The ethnicity pay gap has been covered widely by the media, with Zurich being the latest company to join a small pool of employers voluntarily reporting their figures. A petition was recently created to lobby the government to introduce mandatory ethnicity pay gap reporting, which has now exceeded 100,000 signatures. But why should employers care about this issue when there’s currently no legal requirement to report?

Conversations about diversity and inclusion have been given an added impetus by the events of the last few months, not least because Covid-19 has disproportionately affected black, Asian and minority ethnic (BAME) people. Introducing an ethnicity pay gap report is one very tangible way in which companies can ‘walk the talk’ on D&I because it will help them to measure progress and drive forward meaningful change. For Hachette UK, there is so much intrinsic value in reporting our ethnicity pay gap and we’ve committed to it for the last two years and will continue to report in the years to come. Let me explain why.

First, it’s a way to confront the issue of representation, head-on and as a business priority. As our CEO, David Shelley, said: “Diversity is key to the creativity and culture that will make us a better publisher.” It’s not only our duty as a responsible employer to ensure that opportunities are open to people of all backgrounds, but a creative and commercial imperative. 

Second, even if – and especially if – the figures make for uncomfortable reading, it’s important to listen to the story they are telling in order to take action and be accountable for long-term change.  We became the first, and currently only, publisher to report our numbers in 2019 following a request from THRIVE, our BAME employee network, which was fully supported by our CEO and board. The board recognised that this would be a crucial step forward in moving from anecdotal data to actionable change around representation, which formed part of a wider programme of D&I work at Hachette UK known as Changing the Story – a core pillar of our business strategy. 

In 2019 Hachette UK pledged a BAME representation target of 15 per cent of the total group workforce within five years. Our recently published second ethnicity pay gap report shows the number of BAME employees has increased from 7.7 per cent to 9.6 per cent last year, which means that we are now 5.4 per cent away from our target. However, the mean average pay gap has widened. While we recognise that we’re taking steps in the right direction, our data suggests there’s much more to be done – a narrative that many companies will no doubt recognise and echo.  

Third, it’s a springboard to talk actively about race and ethnicity in the workplace. It's important that employees feel seen and heard, and transparent discussion around the ethnicity pay gap report is vital to driving meaningful change. Since the publication of our first report in 2019, our CEO has chaired several company-wide workshops to hear directly from colleagues and converse openly about race and ethnicity in the workplace. That feedback has formed the basis of a robust action plan covering four key areas: recruitment, progression, retention and representation in our publishing. 

Finally, it’s important to use the data to implement tangible, positive change. Since our last report, we have recruited a third cohort of publishing trainees as part of a programme that focuses on candidates from BAME backgrounds, published a new respect and inclusion policy, and held our first Changing the Story Day – a company-wide showcase exploring ways to become more diverse and inclusive. 

Although there are positive elements to our story, we have a long way to go and anyone working in this realm will recognise that it will be a journey. With that in mind, here are our top five tips for employers looking to start reporting their ethnicity pay gap figures:

  • Proactively engage your relevant employee networks as early as possible. Collaboration is key throughout the ethnicity pay gap reporting process.
  • Be mindful of the emotional impact of the report and the ways in which colleagues with BAME backgrounds may feel ‘othered’ or ‘hyper visible’, particularly in the context of predominantly non-BAME teams. Ensure that you have plenty of safe spaces and opportunities for open discussion and feedback.
  • Prepare senior leadership to actively lead discussions. Do not let the report be met with silence or expect BAME colleagues to carry the conversation and the emotional labour.
  • Create an action plan. The report is just a starting point and it should lead to tangible, clear commitments with accountabilities and timelines.
  • Beware the binary. There are multiple realities, identities and lived experiences within the term BAME, and discussion and action plans need nuance to support colleagues appropriately and increase representation across ethnic groups. Although BAME itself continues to be a contentious and limited term, it will be difficult to move away from this in the context of pay gap reporting until representation of the groups within it is much higher and we can break down the data further.

Saskia Bewley is head of diversity and inclusion at Hachette UK

Notes on Hachette UK’s ethnicity pay report: The report includes both mean and median figures. The mean pay gap is calculated by taking the average earnings of every BAME (black, Asian and minority ethnic) employee, and the average of every non-BAME employee, in the company. The difference between the two averages is our pay gap, which is expressed as a percentage of non-BAME employees’ earnings. 

The median is best explained by imagining that all BAME employees are lined up from lowest to highest in terms of pay, and the same for non-BAME employees. The salaries of the people in the middle of each line are then compared, which gives us the median ethnicity pay gap.

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