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What is the ethnicity pay gap?

The ethnicity pay gap shows the gap in average earnings between different ethnic groups.

Did you know that in the UK, BAME (Black, Asian and minority ethnic) workers earned between five to ten percent less than their white peers between 2012 and 2018? In the US, white men received higher hourly pay than other groups, except for Asian men.

It’s pretty shocking, isn’t it?

It sounds obvious really. People should be paid a fair wage without their race coming into it. But the sad fact is that there is an ethnicity pay gap hiding in plain sight. It takes vulnerability and bravery for organizations to be open with their ethnicity pay gap data. The good news is that the more companies provide this data, the better we can understand what actions we need to take.

Data analyze by @socialbakers.

📊 What’s driving the ethnicity pay gap?

Black, Asian and minority ethnic groups are woefully underrepresented in leadership positions. There’s no single reason why this is happening. Bias, microaggressions and discrimination certainly play a part. To get around this some people of color have resorted to anglicizing their names just to get a job interview.

In the UK ethnic minority representation on boards fell to 7.4% in 2019 from 8.8% in 2018. While female representation in leadership positions is growing, we’re just not seeing the same growth for BAME leaders.

Trevor Phillips Quotes

If you look at the FTSE 100 companies, the lack of representation gets even more depressing. According to Green Park there are only 10 BAME Chairs, CEOs and CFOs in companies in the FTSE 100. Black people are the least represented in this group, at 1.4%.

Pay day money by @feibim.

What your leadership says about your company

Support from managers is vital for helping people achieve their dreams at work. Especially when that dream is to become a leader in the organization.

But research has found that certain groups just aren’t getting that support. A Nielsen survey found that 64% of Black women in the US agreed that their ambition was to make it to the top of their profession. But women of color only represent 4% of C-Level positions in 2018.

So, what’s going on?

McKinsey and study found that these women are less likely to have managers who:

  • promote their work contributions around the office
  • help them navigate company politics
  • socialize with them outside of work

This means they’re excluded from the informal networks that help people reach those leadership positions. It’s up to organizations to ensure that their managers are providing enough support to people on their teams to help them reach their full potential and leadership goals.

This piece from Harvard Business Review includes a list of actions to help women of color get ahead that you and your people leaders can put into action straight away. These include:

✅ Make an effort to get to know women of color on your team better. Invite them out to work socials, or schedule an informal cup of coffee and a chat.

By helping people network informally with senior management in your organization, you can give people great opportunities for their career trajectory.

✅ Give public kudos for good work. Call out good work and publicly thank them. This is something that everyone can do, from the newest intern to the CEO. When someone does well or has an idea, let everyone know where that spark came from and elevate their standing in the company.

✅ Encourage a culture of feedback. Empower your people leaders to give fair and impartial feedback to everyone they manage. It should be specific and delivered in real time. It’s common to want to help people like us, but try and give feedback to everyone on your team.

🔦 Shine a light on the ethnicity pay gap

Despite the efforts of the Black Lives Matter protests calling for racial equality across the world, companies still don’t have to report their ethnicity pay gaps. Without this data, businesses are unable to “diagnose and take action to deal with their ethnicity pay gaps” according to Sandra Kerr, race director at Business in the Community (BITC).

By bringing this data into the light the public can hold companies to account. In the UK progress has been slow. In January 2019 the government closed a consultation on ethnicity pay reporting, but the outcome has yet to be published. In March 2020 a petition calling for mandatory ethnicity pay gap reporting for organizations with 250 or more employees was welcomed.

Some companies have chosen to voluntarily report their ethnicity pay gap data. Is this something that your organization would consider? What can your business do to help bring this data into the light?

The ethnicity pay gap is complex, and driven by several different factors. A lack of representation of people of color in leadership roles makes it hard to close the gap. Reporting of the ethnicity pay gap data and support from managers can help people of color reach leadership positions and help organizations learn what they need to do to narrow and eventually close this pay gap.

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