Gender pay gaps have been revealed, but what about the diversity pay gap?

While 12.5% of the UK working-age population come from a black or minority ethnic background, they make up only 10% of the workforce. So who’s taking action on race equality?

When Ruby McGregor-Smith was asked by the government to author a review on race in the workplace in Britain (pdf), she admits she didn’t want to do it. “I never wanted to talk about race because it’s so complicated. When you’ve lived here most of your life … you’re not actually comfortable with it yourself.

“But it was a real eye opener for me,” she continues. “I thought things had improved since I was a kid. But everyone I met basically said it’s diabolical.”

Lady McGregor-Smith was born in India but moved to the UK with her parents when she was two. In writing her review, she found evidence of discrimination and bias that can exist at every stage of an individual’s career. While one in eight(pdf) of the working-age population in the UK come from a black or minority ethnic (BME) – also sometimes described as black, asian or minority ethnic (BAME) – background, they make up only 10% of the workforce (pdf) and are mostly clustered in the lowest-paid positions. Only 6% hold top management positions (pdf). According to research by the Chartered Institute for Personnel Development (pdf), almost one in three (29%) black employees say their career progression has not met their expectations because of discrimination.

That bias often begins even before someone is hired: “Organisations and individuals tend to hire in their own image, whether consciously or not,” she adds. At a time when companies with more than 250 employees have had to publish their gender pay gaps, McGregor-Smith says doing the same for diversity would help them talk about their own figures and make changes to redress the balance.

In 2017, PwC became one of the first organisations to publish its BAME pay gap(12.8%). EY (pdf) and KPMG (pdf) soon followed suit. Laura Hinton, chief people officer at PwC, says she was initially nervous about the report’s publication, but that the feedback has been overwhelmingly positive. “I got many, many notes from our people who are from a BAME background saying they were proud of the firm for putting its head above the parapet and shining a spotlight on the issue.”

Part of the work PwC has been involved with to improve the gender split at the firm – and within the technology sector more broadly – has been helpful in forming an action plan to tackle the ethnic diversity gap, she says. The firm’s gender pay gap has narrowed to 13.7% in 2017, from 15.1% in 2014, when the results were first published, and over half of the global leadership team (nine positions) are now female.

The firm also launched the Tech She Can Charter in 2018 and now has 45 organisations working together to improve the ratio of women working in technology. Almost a third of the 120 students offered places on the PwC Technology Degree Apprenticeship programme are female. The average percentage of women who study computer science and technology degrees is about 16%.

“I am certainly not claiming victory, [or saying] we’ve achieved everything we need to on gender, but I think we were really clear on our strategy,” Hinton says. “Our people could feel the momentum in the business. We didn’t have that same momentum from a BAME perspective [before publishing the diversity pay gap data].”

There are crossovers too in terms of concerns about language. “People struggle a bit with language and gender – should I say woman, female, lady, girl … but with BAME, people were so worried about saying the wrong thing, using the wrong word, or offending somebody, they were avoiding the conversation. That’s the worst of both worlds.”

The reluctance to discuss race in the workplace was identified by McGregor-Smith as a key factor when it comes to improving the potential of BAME people to thrive at work. In response, Business in the Community published the pocket guide, Let’s talk about race (pdf), including insights gleaned from its 2015 survey. While one in three people said they didn’t mind what terms are used, the pocket guide recommends employers survey BAME employees to decide on an agreed terminology to use internally, and encourage people to have those conversations.

Another tool, the Investing in Ethnicity & Race Maturity Matrix, was published in January by diversity and inclusion expert Sarah Garrett, in partnership with MP Dawn Butler, shadow secretary of state for women and equalities and chair of the all-party parliamentary group for governance and inclusive leadership. It includes recommendations such as appointing a senior executive to champion ethnicity and race throughout the organisation, implementing a BAME mentoring programme, and setting goals to improve career progression for BAME employees.

“While companies are doing all this work and auditing their gender pay gap, why not include other areas where we know there’s a massive disparity, especially around ethnicity,” Garrett says. “We’ve shown there’s a problem. Companies now need to step up and improve on this.”

McGregor-Smith estimates the potential benefit to the UK economy from full representation of BAME individuals is £24bn a year. “We argue about skills shortages [and productivity] but actually we don’t look at what we’ve got,” she says. “[There are] over-qualified people who don’t get enough opportunity in the UK because it goes to a small number … these are really critical, big issues for organisations that can really help drive performance.

Almost a third (32.1%) of children of primary school age in the UK are BAME. They’re all hitting the workplace in the next 15 years. And by the time they hit the workplace, you’re going to have a real issue on skills if you don’t promote them.”

PwC’s Women in Tech initiative

Student opportunities in tech

Experienced hire technology opportunities

These articles were co-created with The Guardian.