“There’s a strong sense that black people are being paid less.”
Simon Woolley, a former senior government adviser on race disparity until last year, says it should now be mandatory for companies to disclose their ethnicity pay gap.
Unlike gender pay gap reporting, it is not a legal requirement to publish pay-related data based on ethnicity or race.
“It is not the silver bullet,” Lord Woolley says. “But your company will be more vibrant if people are being paid what they’re worth.”
Business Secretary Kwasi Kwarteng told the BBC on Thursday the government took equality “extremely seriously”, but he wouldn’t be drawn on whether ethnicity pay reporting should be a legal requirement.
“We’re very focused on equal opportunities for everybody right up and down this country… We want to take people’s talents and ingenuity fairly and represent opportunities to everybody,” he said.
Calls for firms to improve diversity and equality in the workplace gathered pace in 2020 – a seismic year.
Following the deaths of black Americans George Floyd, Breonna Taylor and Ahmaud Arbery, the subsequent series of protests calling for an end to racial discrimination prompted a public outpouring of support from the corporate world.
Companies large and small, around the world, scrambled to make pledges to tackle racism and improve diversity and inclusion. But a year on, what progress have they made?
BBC Radio 5 Live’s Wake Up to Money programme contacted 28 UK-based businesses that were the first to sign up to a pledge to tackle racism in their workplaces. The leaders of those organisations had signed a letter printed in The Sunday Times on 21 June 2020, promising their support to the cause.
Some of the measures included creating more diverse workforces by setting targets for black talent in recruitment and more diverse shortlists of candidates.
Of the 28 companies the BBC approached, 23 responded.
A spokesperson for one firm told the BBC they were unable to comment because they were still collecting the relevant information, while three of the businesses did not respond.
Accountancy giant KPMG was among those companies to sign the pledge.
John McCalla Leacy, a partner and board member, tells the BBC: “I think, at a personal level, we all saw those awful images come in from the US – and we’re a partnership.
“There was just a huge outpouring to do what we could, both individually and corporately. That’s what inspired me and my fellow partners to sign this letter.”
‘Businesses making bold claims’
KPMG quickly published a Black Lives Matter action plan containing five key areas to focus on.
Mr McCalla Leacy, who is of black West Indian/Jamaican heritage, says the aim was to create an environment “where people can talk and learn about challenges that people face, and talk and engage in a constructive way”.
The pledge KPMG and others signed up to now has more than 80 companies involved, and is being co-ordinated by Involve People, a charity promoting diversity and inclusivity in the workplace.
Its chief executive and co-founder, Suki Sandhu, says: “The aim of the open letter was to effectively hold the companies accountable for driving race and black inclusion in business.
“We’re not going to let this be virtue-signalling or something for [businesses] to tick a box. The whole point of them signing is to take the actions in the letter.”
What’s been done?
Almost every firm that shared their progress with the BBC said they had started conversations or “listening sessions”, with the company seeking input from colleagues from ethnic minority backgrounds to hear their concerns and see what action could be taken as a result.
The outsourcing firm Capita said their listening sessions had been attended by more than 2,500 people. Other prominent proponents include Tesco and Marks & Spencer.
Many of the 23 businesses said they now deliver training to raise awareness of anti-racism and promote inclusion while the term “unconscious bias” was explicitly mentioned by six of the 23 companies.
Meanwhile, nine of those 23 firms have committed to publish an ethnicity pay gap report each year.
Two of the reports the BBC has seen show a lack of ethnic minority talent in senior roles.
Sandra Kerr, race director at Business in the Community, a charity that works with companies to make a social impact, tells the BBC: “One of the things I wrote last August was a black voices report – and we found real disparities in black employees feeling like they aren’t listened to and are unable to get their ideas to the bosses.”
Wake Up to Money spoke to a black employee, David (not his real name), who’s been working in the rail industry for more than a decade.
“It’s a struggle to go any further [in the industry] in terms of career progression. I have applied for many jobs before, senior roles and I have been knocked back. I’ve never been given the feedback even though I’ve requested it.”
Several times he has applied for positions unsuccessfully, only for the firm to go and recruit externally.
“Sometimes I feel like your face has got to fit or you’ve got to know somebody. It’s not about your skill set. It’s not about what you know, it’s about who you know.”
Ms Kerr says firms need to “involve black staff in recruitment processes and idea generation” to help them climb up the career ladder.
Like Lord Woolley she supports mandatory ethnicity pay reporting, adding that leadership is needed from government.
A government spokesperson said: “The Commission on Race and Ethnic Disparities published its independent report earlier this year, which included recommendations on ethnicity pay reporting.
“We are considering the Commission’s findings on this matter alongside feedback to our consultation on this issue and other work, and will respond to the Commission’s report in due course.”
Some measures aimed at making workplaces more diverse and inclusive have been criticised in the past.
The government’s Commission on Race and Ethnic Disparities report quoted research from Harvard University, which said that mandatory diversity and inclusion measures have not always been successful, while the Equality and Human Rights Commission found that training on unconscious bias can have limited effect and the potential to back-fire.
But the death of George Floyd really has changed the way the corporate world views diversity, KPMG’s John McCalla Leacy argues.
“In the time of the pandemic, whereby we’re all stuck in lockdown and watching our TVs and phones, you couldn’t have missed not only the tragic murder of George Floyd, but the events afterwards.
“There was an outpouring of grief that we’ve seen among our clients and corporate friends.
“Businesses are making bold claims and want to drive lasting change – and the business community is really supportive of each other so that we can all progress forwards.”