Ethnicity Pay Gap Reporting is Key – New Guidance Available

The UK government has published new guidance for employers on how to measure, report on and address ethnicity pay differences within their workforce.

This resource assists employers to start reporting on ethnicity pay gaps, which we know is a key area for improvement based on our 2022 Diversity Data Benchmarking Results. The guidance is particularly relevant to those operating in the construction and built environment sector.

Our most recent Diversity Data Benchmarking Report found that only 4% of companies surveyed collect ethnicity pay gap data. Whilst it is promising that close to 28% intend to do so in the future, the vast majority (almost 68%) of companies in the sector had no intentions of reporting on ethnicity pay gaps.

Yet, at the same time, we know that people from ethnic minority backgrounds:

• Make up nearly 40% of all applicants for jobs in our sector
• Are significantly less likely to secure a job in the sector – on average, it takes 50 applicants to achieve 1 successful hire from an ethnic minority background, compared to 16 white applicants (for some ethnic minority backgrounds, this ratio is as high as 78 applicants to 1 successful hire)
• When working in the sector, are subject to an 8.3% pay gap
• Generally receive smaller bonuses (25.3% lower bonuses than white workers)
• Leave their jobs in higher proportion than their representation in the sector itself, particularly if they are women or part of the LGBTI+ community

We know the sector needs to do better with recruiting, attracting, promoting and rewarding people from ethnic minority backgrounds.

Businesses must understand their workforce across diversity metrics to identify areas for improvement and start to take meaningful action to close the gap.

This excellent resource assists employers to start collecting and reporting on ethnicity pay gaps, in addition to gender pay gap reporting.  It covers common queries such as confidentiality, aggregation and location of employees, provides recommendations regarding collection, calculating and reporting, and includes step-by-step instructions to ensure a consistent approach and allow for meaningful comparisons. Finally, it supports an evidence-based approach towards designing actions to improve, following data analysis and reporting.

The Fairness, Inclusion & Respect (FIR) Programme provides an extensive range of training, tools, guidance and resources to assist organisations in addressing workplace culture challenges and building inclusive and respectful environments.

Our resources are free and accessible to anyone working in or aspiring to work in the built environment.  FIR is one of the arms of the People Matter Charter, a workforce strategy for the built environment.  Businesses can set learning pathways for staff and track progress on their dedicated corporate dashboard and can complete our FIR Growth Assessment, a structured maturity assessment tool which delivers a bespoke 10-point action plan suited to where they are on the FIR journey.

Explore the FIR Programme here.