Yesterday PricewaterhouseCoopers published their ethnic minority pay gap figures alongside gender pay. The BBC and other outlets drew attention to the headline figure of a 13% difference between the pay packets of Black, Asian and minority-ethnic staff (BAME) and other employees, garnering negative publicity about a company-wide lack of diversity.

There are two points I’d like to make in response to this story. First, while we should applaud PwC’s efforts to tackle the challenges of ethnic discrimination, as with gender pay, the headline figures are often misleading and only reveal that a problem exists, not its extent or how to solve it. Second, HRDs need to be aware of the significance of their BAME figures, since it seems this may be the next step in pay reporting. Perhaps not this year, perhaps not the next, but it’s worth thinking now about how your figures might look and how to improve them.

Much like gender pay, the aims of ethnic minority pay reporting are excellent, but the demands of the reporting process mean the gesture is often counterproductive, since the raw data is meaningless unless you have some insight. In the PwC example, the company have explained their 13% headline gap by pointing out that BAME employees are concentrated in administrative and junior roles. Here the data is distorted by unequal distribution of roles, and it could suggest, for example, a much wider problem with career progression or recruitment bias. Therefore, a supposedly simple figure requires a lot of explanation to achieve its purpose of greater transparency.

Pay gaps are a symptom, not a cause, of a society-wide malaise. As such, companies' reporting needs to be accompanied by detailed analysis around the headline figure to explain and contextualise it. Without understanding exactly how and why a pay gap exists, it’s impossible to take practical steps to close it.  For example, a lack of BAME employees in senior management roles suggests changes are needed to recruitment procedures. Is the wording or accessibility of job advertisements putting off ethnic minority candidates? Do existing management attitudes or the induction process also play a part? It’s worth considering changes to your practices now, to avoid exposing a significant pay gap in a few years’ time.

It can be disruptive for a company to acknowledge its pay gap, but as the saying goes, ‘The first step is admitting you have a problem.’ Headline figures don’t tell the whole story, so smart companies create their own narrative and communicate it effectively to their employees, the press and the public. BAME pay gap reporting may be in its infancy, but the winds of change are only blowing one way. Get ahead of the curve and take control of your figures now.

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