Mind the gap: Exploring the ethnicity pay gap in light of ASOS revealing their own.

With the fashion retailer ASOS revealing their ethnicity pay gap for the first time, we’ve decided to break down the disparity between wage averages for white and BAME employees, and to see how employers can work to close the ethnicity pay gap and support greater workplace diversity overall.

What is the ethnicity pay gap?

Despite the importance of fair and equitable pay, the ethnicity pay gap remains a common issue in majority white countries. Essentially, it’s the difference between how much your average white employee in any given profession makes, versus the average employee of a non-white ethnicity. While employers can do a lot of good by opening up the conversation around workplace diversity to their employees, the gap between pay for white and non-white employees is a massive obstacle on the path to true workplace equality.

The most recent ONS stats for the UK’s ethnicity pay gap were released in 2019. ONS found that, in that year, the gap shrank in England and Wales to its lowest recorded level since 2012. Some minority groups (Chinese, White-Irish, White-Asian and Indian) actually earned more hourly pay than White-British employees. Despite that, however, most minority ethnic groups continue to earn less.

The ethnicity pay gap is larger for men than women, although within ethnic groups, men are still typically paid more than women. Surprisingly, the gap was also larger for employees aged 30 and over compared to those aged 16-29.

So, why is there an ethnicity pay gap when racial and cultural backgrounds fall under what’s known as a protected class? This should mean, at least on paper, that discriminating against someone for one of these reasons is absolutely illegal. Unfortunately, there are numerous layers to the discrimination that minority employees experience on what can be a daily basis.

If all racism boiled down to screaming threats and slurs, it would be much easier to remove. But a lot of workplace discrimination is subtle. It can even be unintentional a lot of the time, due to things like unconscious favouritism and the proliferation of casual stereotypes. The lack of diversity in the leadership of many businesses allows unconscious discrimination and unspoken favouritism to flourish.

What steps have ASOS taken?

ASOS, a popular online fashion retailer, recently released their EPG stats. While ASOS has been tracking their ethnicity pay stats for some time, this marks the first time they’ve actually released them to the public.

According to ASOS’ findings, this year is the first time that the median pay for BAME employees exceeded their white colleagues by 5.9%. This is a vast improvement over their findings for the previous year, which were released for comparison. Last year, ASOS’ minority employees earned an average of 15.3% less than white employees. This represents vital progress towards creating a fair and equitable workplace culture.

But, in case you thought ASOS just released these figures to make themselves look good, you should know it’s not all sunshine and roses. Despite the overall improvement for BAME employees, there are still large gaps for specific ethnic groups. Black employees were paid an average of 13.4% less than white co-workers, and that figure rose past 14% for employees from mixed ethnic backgrounds.

Additionally, ASOS still has problems with employee diversity, and more specifically, a lack of diverse leadership. Ethnic minority employees make up just under a fifth of ASOS’ overall staffing, but only account for 7% of leadership personnel. This is a major problem, as diversifying management and senior leadership in any business is essential for quashing unconscious racial biases in the workplace.

Other businesses reporting on their EPG

So, we know how things look for ASOS. But they’re just one company out of countless numbers of them, each with their own workplace culture to contend with. That raises the question, how are other businesses doing in terms of their ethnicity pay gap?

In 2019, fifteen UK businesses agreed to actively publish their annual ethnicity pay gap stats, including Deloitte (who have already been publishing these stats since 2017). So, let’s look at some of these companies to see how they’re doing:

• Deloitte: According to their 2020 stats, Deloitte has a mean average EPG of 14.6%. Not only is this close to ASOS’ 2019 levels, it’s also worse than Deloitte’s own figures from that year (12.9%). Things get even worse when you consider bonuses, as Deloitte had a mean ethnicity bonus gap of 44.4% in 2020.
  
• Santander: In 2020, Santander had a mean average pay gap of 8.9% (Which gives them a median of 7.2%). Their mean bonus gap was 28.5%. So, while there are still clear issues, they’re at least doing better than Deloitte in terms of fair pay.
  
• Lloyds of London: Of these three companies, Lloyds seems to be doing the best. According to their 2020 report, their mean EPG in 2020 was 6.8% with a 26.3% mean bonus gap. However, only 12.5% of their employees are BAME, with only 8.5% at the senior management level, showing that they’re still affected by the same issues of representation as other businesses.

Closing the ethnicity pay gap and enabling greater diversity

So, now that we’ve buried you under a mountain of ethnicity pay gap statistics, it’s time for some practical advice about how to overcome EPG issues in your business:

• Mentorship can especially benefit your BAME employees: Workplace mentorships can do your workplace culture so much good. Not only do they benefit the careers of both the mentor and mentee, but mentorships can also be especially valuable to BAME staff. A mentor who’s been in your position can give you sound, empathetic advice to help you make decisions and self-advocate more effectively.
  
• You need to invest in effective management training: When it comes to unintentional favouritism or discrimination, it’s often a manager’s lack of effective training that’s to blame. Managers play a key role in engaging and retaining talent for your business, so investing in proper diversity training and developing soft skills like emotional intelligence is absolutely essential. Biases affect us all, but with a bit of foresight and training you’re managers can learn to overcome their own.
  
• Take financial wellbeing seriously: And finally, don’t forget the importance of financial wellbeing for everyone in your organisation. As the highest earners, it’s easy for CEOs and other senior leaders to become disconnected from the everyday struggles of their ground-level staff. And even a promotion doesn’t necessarily guarantee financial security. Employers will never close the ethnicity pay gap if they don’t start taking the financial wellbeing of every employee seriously.

A weekly employee check-in can help shine a light on issues related to diversity and inclusivity quicker. Why not check out how Weekly10 can help you, your managers and your people.