Ethnicity and gender pay gaps priority for firms but many still struggle to level the playing-field

For many UK employers pay gap reporting remains a key priority but little progress has been made on reducing gender and ethnicity pay gaps. According to Mercer’s new UK Gender and Ethnicity Pay Gap trends report, three-quarters (75%) of respondents disagreed with the government’s decision to suspend gender pay gap reporting in 2020. Although almost three quarters (74%) of respondents reported their numbers to show a continued commitment for inclusion despite the suspension, there has been minimal progress made in closing the gap.

The report reveals that fewer than one in three (30%) employers reduced its gender pay gap by 2% between 2019 and 2020. Alarmingly, nearly one in five employers (18%) reported an increase in pay gap from 2019 to 2020. Recently reported government figures on the UK gender pay gap numbers suggest a median gap of 10.4% for 2020, compared to 9.7% from 2019. A similar theme to Mercer’s 2021 Gender and Ethnicity Pay Gap Trends survey.

Michelle Sequeira, Diversity, Equity and Inclusion Consulting Leader, Mercer UK said: “Our research reveals employers are struggling to narrow their pay gaps. Key drivers of pay gaps range from issues with attracting and retaining women to failing to eliminate the barriers to career progression that prevent female and diverse employees from entering more senior roles.”

Following many unfortunate events globally surrounding race, employers are now looking beyond gender. Nearly two-thirds (65%) supported legislation enabling ethnicity pay gaps to be reported on and addressed and almost half (45%) of respondents claimed they felt under pressure to conduct ethnicity pay gap analysis.