Last reviewed 21 September 2020

The number of companies calculating their ethnicity pay gap has grown significantly in the past two years, according to a survey conducted by PricewaterhouseCoopers (PwC).

The survey of more than 100 UK businesses, collectively employing more than one million people, also shows significant increases in the number of companies collecting ethnicity data and publicly reporting their pay gaps.

Specifically, the percentage of companies surveyed now collecting ethnicity data on their people is up to 67% from 53% in 2018 while the percentage of companies calculating their ethnicity pay gap has risen from 5% in 2018 to 23% in 2020.

Director in PwC’s HR consulting practice, Katy Bennett, said: “It’s very encouraging to see so many more companies taking action to collect, analyse and publish their ethnicity pay gap data. Doing this is a critical first step towards identifying the actions that will drive real and sustainable change”.

At a time when issues surrounding race and ethnicity in the workplace are in sharp focus, she went on, it is positive to see more companies looking to demonstrate a commitment to improving ethnic diversity.

Around seven in 10 companies say they are planning new initiatives to encourage more staff to voluntarily share their ethnicity data.

More than a third (39%) are now providing career sponsorship and advice to employees from an ethnic minority background. Two years ago, no employers said they were taking such action.

Other actions and activities highlighted by PwC include ensuring recruitment processes are open and attractive to all via use of new tools to reduce unintended bias (77%), setting a clear strategy on the action they will take to address ethnic diversity (70%) and taking steps to provide fair access to the best work opportunities (63%).

Comment by Peninsula Associate Director of Advisory Kate Palmer

With the gender pay gap often taking the spotlight when it comes to conversations surrounding pay disparities, the realisation that an ethnicity pay gap is a cause for concern may be surprising to some employers.

This may therefore encourage them to also review any potential ethnicity pay gaps within their business.

Race being a protected characteristic means that we may see employers treading carefully with this issue as this new development could open the floodgates to costly race discrimination claims.