Risk & Economy » Diversity » AAT calls for more action on ethnicity pay reporting

The Association of Accounting Technicians (AAT), says voluntary action on ethnicity pay reporting is a very small step in the right direction.

Last week, public participation charity INvolve announced that 15 companies, including the big four accountancy firms; banks Citi, Santander and the Bank of England committed to report their ethnicity pay gap data.

The AAT, who had called for such action more than six months ago, said it had welcomed the decision but called for Government to go further.

Phil Hall, AAT Head of Public Affairs & Public Policy, said: “AAT is pleased that six months after AAT first recommended companies be compelled to report on ethnicity pay gap data, 15 companies – including the big four accountancy firms – have agreed to voluntary do so. This is a very good but very small step in the right direction. There is much more to do. For example, AAT has long called for ethnicity pay gap reporting requirements – and gender pay gap requirements – to apply to all companies with more than 50 staff.

In response to concerns about any administrative burden that reducing reporting requirements to firms with more than 50 employees rather than over 250, Hall said: “The smaller the company is, the easier reporting calculations should be. What’s more, 99% of UK businesses employ less than 250 people, so reducing the ethnicity pay gap at smaller companies is likely to lead to more compelling outcomes than simply requiring change at big companies employing more than 250 employees.”

The INvolve announcement last week also came just a month after AAT published its YouGov polling of Members of Parliament (MPs) on the issue. This showed that more than two thirds of MPs (69%) believe that new Ethnicity Pay Ratio reporting requirements are, “…a good start in tackling pay reported problems but much more needs to be done.” 

Almost a quarter of MPs (23%) strongly agreed with this statement whilst a further 46% agreed. In contrast, 13% of MPs either disagreed or strongly disagreed with this statement, with 3% stating they “don’t know”.

Involve said last week: “On 12 October 2018, Theresa May announced that the Government would launch a consultation on mandatory ethnicity pay gap reporting for UK businesses. Independent of any government mandate to report, we firmly believe that it is essential for businesses to examine their ethnicity pay gap.

“There exists a litany of cases for which the practice of such voluntary transparency has enhanced the recruitment, attraction, and retention of a diverse workforce – and the business case for diversity is well established. We have convened a forum of senior leaders and champions of ethnic minority inclusion to work towards reporting the ethnicity pay gap for their respective businesses ahead of any government mandate to do so. Not simply because it will be required, but because it is prudent to do so.

The charity said ethnicity pay gap reporting is a vital step in opening up conversations about race at work, eliminating structural and inbuilt biases, conscious or unconscious, in the policies and processes of businesses at large, and ensuring the working world is fair and equal for all. “We hope that in encouraging and supporting businesses to investigate their ethnicity pay gap, industry will be catalysed to take action to ameliorate disparities in the lived experiences of ethnic minorities in the workplace.

“A lack of diverse representation across all levels of a business results in outputs which do not reflect society at large, and businesses are at risk of alienating increasingly diverse populations. For any organisation, collecting and analysing this data is as much about understanding your employees and potential pressure points for minority talent as it is about capturing business opportunities and addressing potential injustices,” it said.

The ethnicity pay gap is not the final word in the state of affairs, but rather an essential mechanism to communicate about wider issues and disparities in the experiences of ethnic minorities in business, said INvolve. “Reporting sends a signal that your firm is ready to have difficult conversations and, importantly, take actions to ensure everyone receives equal opportunity and treatment,” it added.