Two months ago, the Department for Business & Trade (DfB&T) in collaboration with the Equality Hub (EqHub) and Race Disparity Unit (RDU) published Ethnicity pay reporting: guidance for employers. This is “guidance for employers on how to measure, report on and address any ethnicity pay differences within their workforce” and fulfills Action 16 of the government’s Inclusive Britain action plan. I was asked to write the draft version of this guidance and I have to confess to being disappointed with the final version published. I will explain why I am disappointed and why I have decided to publish an edited version of my draft as well.
“We’re committed to Gender Equality!”
As we approach International Women’s Day next month, expect to see more and more employers saying something like this in their PR. It’s an easy statement to make but what does Gender Equality mean to them and you? To encourage employers to be clearer on what this means for them, I want to explore 6 possible definitions. Along the way, I show some definitions of gender equality are out of reach unless half a million women working for the NHS are replaced by men.
“I mentioned it once but I think I got away with it!”
Basil Fawlty didn’t get away with it in Torquay and neither did this manager.
HR Manager – “Our disability pay gap is zero which surprises me”
Me – “How many disabled employees do you have?”
My response sums up my view on Disability Pay Gap Reporting (DPGR). The manager commented on their pay gap whilst I queried their employment gap. As a statistician who happens to be disabled, I consider the conventional disability pay gap statistic to be at best irrelevant and at worse a lie.
… & why are gender pay gaps so small at male dominated private sector employers?
When I asked people recently who on average had the larger gender pay gap, the results were –
- 62% said female dominated (>80% employees are women) public sector (snapshot date 31st March) employers. There were 420 such employers in April 2021 who reported their UK gender pay gap.
- 38% said male dominated (>80% employees are men) private sector (snapshot date 5th April) employers. There were 1584 such employers in April 2021 who reported their UK gender pay gap.
The majority are correct. In April 2021, for every £1 paid to the average man, the average woman was paid 90p at the average male dominated private sector employer and 77p at the average female dominated public sector employer. For context, the average woman at the average employer in the finance sector (who are often in the news for having large pay gaps) is paid 75p.
The 5 steps to close a pay gap are –
- Define what success looks like i.e. where you want to be in the future.
- Measure where you are today.
- Analyse your data to understand why you are where you are today & what the key drivers are of your gaps
- Identify & implement actions that will move you from today to where you want to be.
- Continuously monitor key drivers to ensure you are on the right track
All steps require the use of statistical thinking and statistical methods. Of course, other skills and processes are also needed but they cannot succeed on their own without the help of statistics
Is pay gap reporting about transparency or accountability? This was the main theme of the House of Lords debate on Ethnicity Pay Gap Reporting (EPGR) on 25th October 2021, unlike the Commons debate that preceded it in September. The 9 peers who spoke could be split between those who see EPGR as an exercise in employer transparency and those who see EPGR as an exercise in employer accountability and I consider this to be a fundamental question that has not yet been answered. In this article, I will discuss the implications of both answers to this question for any future EPGR legislation.
The UK Parliament debated Ethnicity Pay Gap Reporting (EPGR) on 20th September 2021 in Westminster Hall. Seven MPs spoke in the hour long debate and, as debates go, I thought it was actually quite good. There was cross party consensus on the merits of EPGR but I saw a divide between those who recognise EPGR is complex and requires trade offs and those who think the complexities of EPGR can be solved with government guidance.
The UK Parliament is about to debate whether or not ethnicity pay gap reporting (EPGR) by UK employers should be made mandatory. The debate will start at 4.30pm on Monday 20th September 2021 and is a result of an e-petition reaching the threshold to require a parliamentary debate. To assist MPs, journalists, campaigners and anyone else interested in this debate, I have written a briefing note which lists 9 key points that need to be addressed during the debate.
When I submitted my evidence to the Commission on Racial and Ethnic Disparities (CRED) in November 2020, I recommended that ethnicity pay gap reporting (EPGR) using the Big 5 ethnicities of White, Asian, Black, Mixed & Other be made mandatory. In the CRED report published in March 2021, recommendation 24 called for analysis of ethnicity to use the Office of National Statistics (ONS) 18+1 ethnicities as much as possible and it is my opinion this is one of the reasons why CRED stopped short of recommending mandatory EPGR in recommendation 9. In June 2021, I published 7 + 5 recommendations for improving gender pay gap reporting (GPGR) and I made it clear that all 12 of my recommendations would also apply to any EPGR system introduced by the government. However, I stated my 2nd recommendation on number of categories to be reported needed more details before it could be applied to EPGR and this article will fill in those details whilst also recording my response to recommendations 9, 10, 23 & 24 of the CRED report.
Five months ago, I introduced the gender swap number as a superior statistic to the median gender pay gap. Feedback from clients and others since then has confirmed my hope they would find it more intuitive to use and interpret. This encouraged me to call on Parliament to amend the UK gender pay gap legislation so that swap numbers could be published for employers with 250 or more employees. I now want to build on this by showing a couple of simple calculations that can turn a swap number into an estimate of how long it will take an employer to close its pay gap.