Theresa May launches consultation into forcing firms to report ethnicity pay figures

Alexandra Rogers
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Top names such as WPP and RBS have signed the prime minister's race charter (Source: Getty)

KPMG, WPP and the Royal Bank of Scotland (RBS) are among a number of businesses to have signed up to a new charter by Theresa May that aims to improve the recruitment and progression of ethnic minority employees.

Alongside the charter the Prime Minister has also launched a consultation into mandatory ethnicity pay reporting, following last year's race disparity audit which revealed that ethnic minority employees bore the brunt of significant disparities in pay.

The consultation, which will remain open until January 2019, will ask employers what they think of mandatory ethnicity pay reporting. Currently only a small number of organisations publish such information on a voluntary basis.

Other signatories to the race at work charter include the NHS, Standard Life Aberdeen, Saatchi & Saatchi and banking giant Lloyds, which is the first FTSE 100 company to set a goal to increase the representation of ethnic minority employees at senior levels.

May said: "One year on from publishing the race disparity audit, the government is delivering on its promise to explain or change ethnic disparities in all areas of society, taking action to support young people into work with funding of £90m from dormant bank accounts, and acting on the recommendations of the Lammy review including by increasing diversity within prison officer recruitment.

“Our focus is now on making sure the UK’s organisations, boardrooms and senior management teams are truly reflective of the workplaces they manage, and the measures we are taking today will help employers identify the actions needed to create a fairer and more diverse workforce.”

The government appointed WPP UK country manager and chairwoman of MediaCom Karen Blackett as its Race at Work Champion.

Blackett said: “Embracing diversity and inclusion is not a choice, it’s a business necessity. Clients choose WPP precisely because of the capability and creativity of our people; it’s why we’re focused on attracting, developing and promoting the best talent from across a range of backgrounds. Creativity powers business growth and this only happens by having diversity of talent in the room and reflecting society in the content we create."

CBI chief UK policy director Matthew Fell said transparency had proved to be a "catalyst for action" in the debate on gender pay reporting, in which businesses with over 250 employers were forced to publish figures on their gender pay gap.

He added: “Reporting must be done in a way that is supported by both businesses and employees, to recognise the wide range of ethnic groups and legitimate staff concerns about intrusiveness where sample sizes are small. Companies want to work with the government to achieve their goal of becoming more inclusive employers.”

Read more: Women put off by gender pay gaps when looking for new jobs, study finds