Ethnicity pay reporting in the further education sector: A burden or a boon?

Following an e-petition debate by UK MPs that revealed broad consensus on the need for mandatory data collection on ethnicity pay, Fieldfisher’s Head of Employment, Pensions, Immigration and Compliance Ranjit Dhindsa considers the implications for further education providers.

On 20 September 2021, UK MPs took part in an e-petition debate on the introduction of mandatory ethnicity pay reporting for UK organisations.

The petition, which received more than 130,000 signatures, followed the introduction of mandatory gender pay reporting and the publication of the McGregor-Smith review of race in the workplace, both in 2017, and a government consultation from October 2018 to January 2019 on ethnicity pay reporting.

MPs highlighted evidence suggesting that, as well as lower pay rates, there are fewer job opportunities and less job stability for people from ethnic minorities than their white counterparts, even among ethnic minority workers who were born and educated in the UK.

For the UK’s further education sector, enhancing diversity among those employed by education and training providers is a pertinent issue.

On 5 August 2020, the Black Further Education Leadership Group (BFELG) published an open letter addressed to the Prime Minister Boris Johnson, the then Education Secretary Gavin Williamson, education funders, regulators and membership organisations, calling for a concerted effort to tackle what the BFELG described as “systemic racism in further education”.

Coming in the wake of the murder of George Floyd in the US and Black Lives Matter protests across the world, the letter complained of a “hostile environment” for BAME (a term subsequently rejected by BFELG and other diversity interest groups) students and staff in further education. It also cited deterrents in the UK further education system’s curriculum, culture and recruitment processes that serve as barriers to black staff in particular entering or remaining in the sector.

These and other factors have led to what has been identified as a worrying under-representation of Black, Asian and ethnically diverse leaders in further education.

Although there is no official data, according to information collected by the BFELG, there are currently 19 black Principals and CEOs of the 234 FE colleges (representing around 8.1% of the leadership population, subject to variations due data subjects self-identifying with minority status on the grounds of discriminatory treatment).

BFELG stated in its 2020 letter that the UK’s further education sector has “gone backwards over the last few years in terms of the numbers of black principals, leaders, middle tier managers, teaching staff and governors”.

This is despite the fact that Black, Asian and students from ethnically diverse groups are estimated to now form 30% of the overall population of students taking A-levels, BTEC Nationals and other qualifications for 16 to 18-year-olds.

While there is also no official data on pay levels for different ethnicities employed in the further education sector – which is unsurprising given the lack of mandatory reporting – the paucity of ethnic minority individuals in senior roles suggests the picture is far from rosy.

Broad consensus on the need for mandatory reporting

The e-petition debate by MPs was not a debate in the traditional sense, in that there was general consensus that there should be mandatory ethnicity pay reporting for organisations in the UK.

The views put forward by MPs indicated there is cross-party political support for compulsory data collection, underpinned by strong public support and the backing of business leaders, trade associations and unions.

UNISON, which represents nearly 30,000 members working in further education and sixth form colleges across the UK, has thrown its weight behind the ethnicity pay gap issue as part of its broader campaign for workplace equality.

At its 2020 National Black Members Conference, UNISON passed a resolution put forward by its National Young Members’ Forum to campaign for the ethnicity pay gap to be subject to similar reporting requirements as the gender pay gap, research the impact of the ethnicity pay gap on public service workers and come up with ways of addressing the issue with employers.

During the e-petition debate, MPs highlighted that many employer organisations feel uncomfortable with voluntary reporting and want it to become mandatory, because they feel nervous about creating risk for themselves or causing offence to their staff.

One size does not fit all

MPs acknowledged that while mandatory gender pay reporting for organisations employing more than 250 people in the UK has been deemed successful in reducing pay inequality between men and women, ethnicity pay reporting will require a different framework.

Gender difference is more, though not exclusively, binary and more evenly spread throughout the UK than ethnic diversity.

The fact that ethnic diversity is uneven in the UK, with cities like London, Birmingham and Leicester having much more diverse populations than some other regional towns, cities and rural communities, was identified as a challenge for reporting, and reinforces the need for the government to compile accurate data on the UK’s geographical ethnic makeup.

It may be that a trial in a particular city like London is needed to iron out some of the difficulties in data collection and ensure there is statistical robustness and anonymity.

Thought will also need to be given to reporting thresholds, as the 250 employee limit above which employers must report on gender pay may not be particularly helpful in the context of ethnic diversity.

For the UK’s further education sector in particular, many providers will likely fall below this staffing number, which had been set to ensure small organisations were not unduly burdened with the task of collecting and reporting data.

On top of this, employers face the added complication of recognising and addressing intersectionality, where one individual can be disadvantaged by the combined effect of ethnicity, gender and socio-economic background.

It is also important to be careful about the language used in reporting and categorisation. Much of the discourse during the e-petition debate, and in the research cited above in relation to diversity, refers to race and colour, as opposed to ethnicity, a term that refers specifically to heritage and cultural background.

Without careful, sensitive consideration, there is a risk that well-meaning diversity action plans inadvertently exclude different ethnic groups within broader categories of race and skin colour.

Despite these challenges to collecting and reporting information, MPs noted that, without data, it will be practically impossible for employers to identify and address discrepancies, or define progress.

It was also suggested that the obligation to report pay data should not be seen as a burden, as lessons from big business that report voluntarily show this is an opportunity for employers to reduce structural inequalities in the workplace, maximise value in the workforce and access a wider talent pool.

While it may not be possible to set benchmarks with ethnicity in the way it has been with gender, an alternative approach may be to let organisations identify their own categories for reporting.

It may also be that ethnicity pay is reported (at least initially) on an industry rather than employer level.

This will help further education providers decide what action plans are most appropriate to their circumstances and should help build trust in the process, and deliver improvements that ultimately lead to more granular data collection.

Now is the time to take action

Some MPs observed that the combination of Brexit and the Covid-19 pandemic have significantly disrupted the world of work and there is more upheaval to come with the end of furlough on 30 September 2021.

They suggested that this period of flux, when many aspects of employer-employee relationships are under review, is an opportunity to take decisive action on equal pay.

There is currently no hard deadline for mandatory ethnicity pay gap reporting or any firm proposals for regulatory intervention on workplace inclusiveness and diversity, however scrutiny is increasing and the issue of equality is becoming a potential risk factor for further education providers.

The debate on 20 September 2021 revealed general agreement with, and support for, the principle of mandatory ethnicity pay reporting; the only bone of contention is how to move from that consensus to the detail of how to implement reporting.

Whatever methodology is used, employees need to feel reassured that the aim of the data is to understand the organisation or industry they work in, not to identify them as individuals. Without that reassurance, which was not discussed in the debate, there will not be engagement from the workforce.

This article was authored by Ranjit Dhindsa, Head of Employment, Pensions, Immigration and Compliance at Fieldfisher. Ranjit is an independent member of the Audit and Risk Committee at Aston University.