What is the Ethnicity Pay Gap & How to Combat It

Business colleagues in meeting with female amputee sitting on desk

In October 2018, then-prime minister Teresa May announced she was launching a consultation on whether mandatory reporting would help bridge the pay and career gap for minorities. The government’s resolve to tackle the ethnicity pay gap intensified with the release of the government’s first report into ethnicity pay gaps in July. Titled, ‘Ethnicity pay gaps in Great Britain: 2018’, it analyses newly reweighted 2018 earnings data taken from the ONS Annual Population Survey. Here are a few of the top-level findings:

  • Workers of Bangladeshi descent earned 20.2 percent less on average than white workers
  • Employees of Chinese, Indian and mixed ethnicity have the highest median hourly pay, receiving £15.75, £13.47 and £12.33, respectively 
  • Employees of Pakistani and Bangladeshi descent have the lowest median hourly pay, receiving £10.00 and £9.60, respectively 
  • In comparison, white employees on average earn £12.03 per hour 
  • In London, a 21.7 percent difference exists in the median hourly pay between whites and minorities — this is the largest gap in the UK

This pay disparity has a three-fold effect;

  1. It affects a worker’s ability to have a decent standard of living
  2. Businesses which create a reputation for underpaying their staff struggle to attract and retain the best people, which impacts staff morale and the businesses profitability 
  3. According to research by the Centre for Economics and Business Research (CEBR), ethnic pay discrimination costs the UK economy around £2.6 billion a year

Ethnicity Pay Gaps: the Hidden Truth

People aren’t usually comfortable talking about money, particularly how much they earn. And if you were to ask them, they probably wouldn’t tell you. This limits your ability to understand if what you’re earning is comparable to your colleagues. But fortunately, there are other ways to check if you’re being paid what you’re worth: 

  • If the company is hiring for a similar role, check to see if there’s a salary bracket included in the job description, and determine whether what you’re getting paid falls within that range
  • Speak to external recruiters to see what the expected average salary is for someone doing your role
  • Use Glassdoor’s Salaries tool to see what others with your job title and location are earning
  • Tap into your professional network and ask them what salary they would expect to receive for doing your role 
  • If you’re a member of a professional organisation, they may be able to provide you with details of average salary grades for your industry

If you suspect you are being paid less than your colleagues because of your ethnicity, you may want to arrange a meeting with your direct line manager or HR team to discuss your concerns. 

The release of the ‘Ethnicity pay gaps in Great Britain: 2018’ report confirms that a pay difference continues to exist between people of different ethnicities who are doing similar roles. Business leaders and experts both recognise that a cultural shift starting at the board level is needed for organisations to make gains in levelling out the pay gap. But organisational culture shifts don’t happen overnight. In the meantime, there are things you can do yourself to help bridge the pay gap. These include: 

1. Asking for a Pay Review

The thought of approaching your manager and asking for a pay review may give you nightmares. But put simply, if you feel you are consistently working above what is outlined in your job description, or if you are frequently smashing your targets, you should be financially compensated for it. The worst that can happen is that you get turned down for a pay rise — asking for a pay review is so common that you’re very unlikely to suffer professional consequences from it.

Gather all your facts and figures before broaching your boss for a pay review. First, know your worth. This means understanding where your salary stands compared to the market average. Second, provide your employers with evidence as to why you’re worth the extra money. Showing them that you have a history of hitting sales figures, bringing in large contracts or finding big cost-savings is hard to argue against.

2. Upskilling 

Upleveling your skillset demonstrates to your employers that you’re worth keeping around. You can also use this as leverage for a pay rise. Plus, it will make you more employable, if you’re in the market for a new job.

Technology has increased the ease and reduced the cost of learning. Numerous online providers offer free or reasonably priced training. Some employers offer a training allowance as part of their employment package, so check your contract to see if you get this. Also, professional organisation like CIMA or AAT sometimes offer free or discounted training programmes to members. 

3. Becoming Your Own Boss 

The makeup of the workforce is changing, and it’s easier than ever before to set yourself up as an independent contractor or freelancerBut before you hand in your notice, it’s important to realise that being your own boss is not as easy as it may sound. Is there a demand for someone with my skills? How will I find customers? What taxes will I need to pay? These are among the questions you should be finding the answers to before you leave your job.

However, if you feel you can make being self-employment a success, you can look forward to having the freedom to work when you want, with who you want and charge what you feel your skills and experience are worth.

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