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Should employers also be forced to report on race pay gaps?

A report suggested businesses with 50+ staff should publish a breakdown of their workforce by race and pay band

The Baroness McGregor-Smith Review discloses that people who are from black and minority ethnic (BME) backgrounds continue to be held back in the workplace, despite equality legislation and anti-discriminatory guidelines. 

This comes at a cost of 1.3% GDP per year.

Baroness McGregor-Smith, who led the inquiry, has suggested that employers being made to remove barriers to BME progression would benefit the economy in the UK by over £24bn per year. This would send a message to the world that Britain’s workplace is for everyone rather than just the privileged.

The report also recommends that the businesses publish a breakdown of their workforce by race and pay band, produce diversity targets over a five-year term, and nominate a specific person within the company to assume responsibility for these targets. The report states that the continued lack of diversity within the British workplace, particularly at a high level, does nothing more than damage the economy and end the aspirations of many, and that this must change for both business and moral reasons.

It has been suggested and proven that organisations and business structures that attract, develop and retain employees from the widest pool of talent are those that are consistently able to outperform their competitors. Such changes must be initiated by the managers of such companies in conjunction with their HR and PR teams.

The TUC has confirmed that there is a need for government action to impel businesses to start acting on diversity and has supported the report’s call for the annual publication of pay gaps on racial lines.

These recommendations follow on from the implementation of section 78 of the Equality Act 2010, which obligates companies to report their gender pay gaps. This was needed despite the original equal pay legislation being implemented over 30 years ago.

So far, the government’s response has been limited, although it has already announced that a business diversity and inclusion group will be formed with the aim of bringing together business leaders and other organisations. The broad aim of this group is stated to be removing barriers in the workplace; therefore, it appears that the government at least accepts that there are problematic issues and has shown willing to confront such issues.

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