Management body calls on government to initiate mandatory ethnicity pay gap reporting

• Shilpa Sharma
• 4 January, 2022

By: Shilpa Sharma

With the six-month ‘grace period’ on UK gender pay gap (GPG) reporting ending in October, the Chartered Management Institute (CMI) has called on the government to now introduce mandatory ethnicity pay gap reporting for large employers.

“The Government has quite rightly mandated gender pay gap reporting for large organisations. There is no excuse for not introducing similar requirements around the ethnicity pay gap. If we are to see a levelled up, stronger and more resilient economy we need to ensure our workforces are as inclusive as possible,” CMI chief executive Ann Francke, said.

She added that the government’s aim of “building back better will ring hollow if the ethnicity pay gap continues to be ignored.”

The institute’s call follows the release of its survey report which revealed that only 33 per cent of the managers’ have taken only one measure in relation to ethnicity pay gap reporting.

Forty-three per cent of the 857 polled managers reported that their senior management teams had no staff from diverse ethnic groups, while only 47 per cent said their organisation was taking active steps to improve representation of diverse ethnic groups through recruitment practices.

Commenting on the survey report, Francke said: “While we have seen positive changes in the world of work in recent years, progress on diversity and inclusion remains far too slow.

“Our new research makes it clear that not enough organisations are taking action to enhance diversity, whether through recruitment or training.”

Besides urging the government, CMI also encouraged businesses to embrace management and leadership training to promote more diverse and inclusive working environments.

Citing a recent CMI analysis Francke said that full ethnic minority representation could contribute an additional £24 billion to the UK’s GDP.

“The evidence is clear, businesses that are truly more inclusive and representative are more productive organisations.”

Since 2017, employers with 250 employees or more are required by law to report their gender pay gap, however, no such legal requirement is there for ethnicity pay gap.