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In July’s King’s Speech, the new Labour government promised to extend pay gap reporting requirements for ‘big’ employers beyond gender to include other protected characteristics, including disability and ethnicity.
Under the likely expansion, companies employing 250 or more staff members would be required to collect and disclose percentage differences between disabled and non-disabled employees, as well as between different ethnicities.
This brings significant challenges to businesses, including HR and compensation teams, who will be mandated to collect consistent and accurate data. Beyond the usual complexities of data collection – quantity, quality, and security – lie specific difficulties including employee disclosure.
Given the nature of the data employers must collect, accurately recording ethnicity and disability pay gap data requires them to overcome concerns over disclosure such as fear of discrimination and privacy concerns.
This “data dilemma” will be discussed at a forthcoming roundtable led by HR Grapevine and Brightmine; but ahead of the conversation, we’re taking an initial look at the disclosure barrier, and how employers can prepare today for the challenges that further changes to legislation look set to bring.
What are the challenges of ethnicity and disability data disclosure?
Although the methodology for ethnicity and disability pay gap reporting will broadly mirror that of gender pay gap reporting, the nature of these protected characteristics lead to multiple complexities that make accurate analysis all the more challenging.
Ethnicity pay gap reporting, for example, involves collecting and analysing data across multiple groups; and with each organisation defining and categorising ethnicities differently, the matter becomes subjective. With inconsistent classification so commonplace, drawing meaningful analysis becomes a tricky task.
Similarly, with disability pay reporting, a lack of a globally consistent definition of disability results in variations in how disabilities are defined and classified. Self-identification can therefore result in inaccurate company-wide reporting.
Moreover, stigma represents a particular challenge for disability pay reporting, as the fear of discrimination and retaliation after revealing disabilities can lead employees to be less likely to disclose.
How can employers overcome the data disclosure dilemma?
These problems have no easy answers, which is why HR Grapevine and Brightmine are inviting HR and compensation professionals to share and reflect on best practices in line with the ongoing challenges around disclosure and data collection faced by big employers.
Some guidance is already in place. Brightmine recognises the importance Governmant Statistical Service (GSS) guidance which offers steps for businesses introducing disability and ethnicity pay gap reporting to follow, whether in preparation for forthcoming expansion to legal requirements or because there is buy-in across the business that improving pay equity is non-negotiable.
The GSS guidance, for example, recommends collecting data by asking employees to report their ethnicity but to offer aggregated categories that allow for comparison. “The data gathered could be distilled into five aggregated categories. For example, the data could be grouped into: Asian; black; mixed; white; and other (alongside a sixth “prefer not to say” category),” the guidance says.
Ethnicity or disability data can be collected in a variety of ways, including anonymous surveys and questionnaires that can overcome fears of self-identification.
“Employers should clearly communicate the purpose of the survey and how the data will be used to improve workplace equity,” Brightmine recommends, referencing the GSS guidance. “Educate managers and employees on the importance of collecting this data and how it will contribute to a fairer workplace.”
Including data collection as a part of the onboarding process and augmenting this with regular reviews to ensure data is up to date can help gain participation and buy-in from the workforce.
Clear communication about how data will be used and stored can also overcome privacy concerns which are particularly present in employees asked to self-identify protected characteristics like ethnicity and disabilities. Greater trust encourages higher participation rates and disclosure, resulting in more accurate self-identification and more complete data sets for analysis.
Join HR Grapevine and Brightmine’s pay equity roundtable
How can we improve data disclosure, whilst building transparency, and fostering trust? How can clear communication and data usage transparency impact employee participation? How can organisations measure progress against DEI and pay equity goals about industry benchmarks?
The points raised earlier in this article only scratched the surface when it comes to answering these questions. They are issues that all UK-based big employers must face in the coming weeks, months, and years.
To play a critical role in leading the conversation around pay equity, as well as learn more about the best practices already being implemented by leading HR professionals, join us in person for a morning of insightful discussion and be a part of the solution around pay equity challenges in UK workplaces.
