Accountancy firms push for mandatory ethnicity pay gap reporting

EY, KPMG and Deloitte are among 15 of the biggest UK companies calling for mandatory ethnicity pay gap reporting among businesses with more than 250 staff

A total of 15 companies signed a commitment to work towards the enforcement of ethnicity pay gap disclosures, encouraging other businesses to follow the lead.

INvolve, an organisation that champions diversity and inclusion in business, said other signatories were Bank of England, Bupa, Citi, Creative Equals, ITN, Jomas Associates, Lloyds of London, Reluctantly Brave, Santander, Sodexo, Stella McCartney and WPP.

The organisation predicts white people earn on average £67 to £209 more per week than similarly qualified individuals of a different ethnic background and but that the most ethnically diverse workplaces are 35% more likely to financially outperform industry averages.

As a result, these business are not only calling for mandatory reporting of pay disparities but also working towards bringing about institutional change through visibility of data and open discussion of why the ethnicity pay gap exists within their organisations.

Currently, only 3% of large businesses have voluntarily reported their ethnic pay gaps. All the Big Four firms have done so.

PwC has previously disclosed that its Black, Asian and Minority Ethnic (BAME) pay gap for employees and partners stood at 35.9%, while Deloitte’s was 43.9%, EY’s stood at 38.1% and KPMG’s was 34%.

Suki Sandhu, CEO and Founder of INvolve said, “Addressing hard issues like disparity and race is never easy, but the moral and business case for taking action must win out. For many businesses the idea of increasing corporate reporting is not a welcome one. But, as shown by mandatory gender pay gap reporting, it is vital to encourage discussion and help businesses to deliver impactful change.

“We know firms who are more diverse and inclusive enjoy a significant diversity dividend – enhanced profitability, productivity, innovation and sustainability. We hope by publishing this framework and white paper more businesses will voluntarily take up reporting on the ethnicity pay gap, while we await the outcome of the government’s policy decision.”

PwC was not included in the list of signatories but said, "We support mandatory pay reporting and have contributed to the government's consultation on making this mandatory ."

The Equality and Human Rights Commission has also called for mandatory ethnicity and disability pay gaps reporting. It argued that the UK needs to place the same level of scrutiny and action on tackling pay disparities among ethnic minority and disabled staff that it currently puts on gender pay inequality.

Originally published in Economia on 1 March 2019.