Setting the pace on ethnicity pay gap reporting.

Vanguard businesses forge ahead on ethnic minority representation and pay gap reporting. 

Change the Race Ratio (CtRR), the campaign group of 120 UK businesses set up to lead corporate action on ethnic minority data collection & reporting, leadership representation and reward has published its annual survey of members’ performance data. It comes ahead of the new government’s consultation on a new race and disability equality legislation, focusing on equal pay. 

The survey shows a striking increase in companies’ reporting on ethnicity pay gaps, with 79% of CtRR members now publishing relevant data

Publishing a race action plan and ethnicity pay gap report within two years of joining, is one of the four commitments required of CtRR companies. The other three are;

  • Increase racial and ethnic minority representation among Board members
  • Set targets and Increase racial and ethnic minority representation in senior leadership
  • Create an inclusive culture for all talent to thrive 

Signatories have made progress against all four commitments including progress on increasing representation on boards and at ExCo and ExCo minus 1 (Senior Management). This year has seen a 25% increase in racial and ethnic minority representation in senior management for FTSE350 respondents.

Furthermore 91% of FTSE 350 signatories have set a target to increase representation, compared to 37% of the whole FTSE350 as reported by the Parker Review. 

One third of members reporting have set specific targets for senior black representation, a consistent weakness in corporate leadership.

Key findings:

  • 91.2% of all our respondents now have at least one racial or ethnic minority board director, up from 83% for the year prior
  • Board representation stood on average at 15.32% up from 14% the year before
  • Almost half of respondents reported having 2 or more ethnic minority directors on their board, with the average board comprising of 10 members
  • All Change the Race Ratio FTSE350 signatories achieved their Parker target of having at least one ethnic minority board director, compared with 77% of the whole FTSE350
  • 85% of all respondents have set a target for senior management, up from 74% the year prior
  • The number of respondents to set black-specific targets stands at one third, the average target is 3.7% to be achieved by 2026
  • There is a small positive difference in attrition for ethnic minority employees, 12%, compared to 13% for all colleagues suggesting that steps have been made to create a more inclusive workplace. 

Change the Race Ratio continues to be the leading UK campaign to increase ethnic minority representation in business leadership positions. We now have 120 signatories including some of the UK’s largest employers, totalling around 700,000 employers across 30 sectors. 

Sir Trevor Phillips, Chair, Change the Race Ratio, Comments on the findings of the study

“Our signatories have focused on the needs of their stakeholders, customers, employees and investors and have doubled down on increasing representation to ensure better business outcomes. The CTRR members are demonstrating that acting on the data and evidence they see in their business, they are making rapid progress they have made towards our 4 commitments to change, and towards fulfilling the expectations of both their staff and their customers.”

Syreeta Brown, Vice Chair, Change the Race Ratio and Chief People and Communications Officer, Virgin Money plc Comments on the findings of the study

“It’s hugely encouraging to see the progress our signatories have made on ethnicity pay gap reporting over the past three years.  There is definitely opportunity for more firms in the UK to join our signatories to use data as the bedrock for their decision making in making sure we continue to create equity in pay outcomes.  With the government set to mandate ethnicity pay gap reporting we stand ready to share our insights to ensure the policy works for business and that we see positive change for underrepresented communities.”

David Tyler and Soumen Das, Parker Review said:

“At the Parker Review, we set out the moral and economic case for greater ethnic diversity at Board and senior management level. The CtRR signatories clearly understand the opportunity that comes with working with the widest possible talent pool, and we commend them on the excellent progress towards CtRR’s commitments.
 
Looking ahead, we firmly believe that the commitment both to better data and to the sharing of best practice will enable more UK companies to provide wider opportunities for ethnic minority talent. It will also help those companies to be more competitive and more profitable."

Amanda Cusdin, Chief People Officer, Sage plc said:

“Creating a workplace that reflects the community we live in is a strategic priority for Sage – we’ve always maintained that increased diversity and inclusion is not just the right thing to do, it’s also demonstrably good for business. I’m pleased to see the progress outlined within this report, which also reflects much of the hard work we’ve been putting in at Sage, but there is a long way to go for business as a whole. I look forward to continued partnership with Change the Race Ratio to maintain momentum in the coming months and years.”

Business leaders comment on the importance of Ethnicity Pay Gap Reporting

Nathan Coe, CEO of Auto Trader said:

“At Auto Trader we have a strategic commitment to create a representative workforce across all levels of our organisation. We pursue our aim both authentically and systemically, expecting to see improvements in metrics, but not being driven solely by the pursuit of metrics. We believe it is important to remain accountable and transparent which is why we publish our ethnicity pay gap.”

Danny Harmer, Chief People Officer, Aviva plc, said

“Our ambition is for our people to reflect the customers and communities we serve. We are using data to drive improvements and our ethnicity pay gap report is a fundamental source of that data.”

Fiona Vines, Group Chief Inclusion Officer, BT plc said 

"Having a workforce that reflects our customers is mission critical for BT Group to ensure our products and services are accessible and inclusive by design.  That’s why we are committed to building an equitable and inclusive culture across our business. Ethnicity pay gap reporting is very important because it shines a light on the systemic causes of inequality. Only by asking the question about what is driving the pay gap, can we see the changes we need to make, both inside and also beyond our organisation."

Muniya Barua, Deputy Chief Executive of BusinessLDN, said: 

“Diverse teams give businesses a competitive edge by helping them better understand the needs of their customers, suppliers and staff. It’s welcome to see the positive trends in Change the Race Ratio’s report as we work together to boost racial and ethnic minority representation at the top of the capital’s businesses. 

“To accelerate progress, we support the Government’s plans to introduce mandatory ethnicity pay gap reporting – for firms with more than 250 staff – so that this data can be used to help tackle the inequity that different groups face. London has the most diverse workforce in the country but we must do more to tackle the pay gap and ensure talented individuals can succeed regardless of their background.”

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