Ethnicity pay gap reporting pushed back again as the term encompasses “multiple categories”

Since 2017, gender pay gap reporting for companies with 250 employees or more has helped systemically address the disparities women face in business. Meanwhile, gender diversity is approached in a much more structured way and has forced this to be a high and recurring priority on many employers’ agendas. Similarly, the prospect of ethnicity pay gap reporting was introduced in 2017 but was ultimately rejected despite it being a key recommendation from a government-commissioned review – published by the Mitie Group. Yet again, reporting has been pushed back by the government, who state that substituting a binary protected characteristic with one that has multiple categories would create data and statistical issues.

QU – business coaching experts for ethnic minority owned SMEs – suggest that applying the term “ethnic minority” as a catch-all term, isn’t reflective of the diversity present in the UK business ecosystem, with the UK’s ethnic minorities encompassing a vast range of cultures and backgrounds. Nevertheless, introducing efficient reporting to understand and address the challenges that ethnic minorities face in business is crucial for social and economic progress. To reinforce this notion, a new report from The Centre for Research in Ethnic Minority Entrepreneurship stated that additional support for the full scale of ethnic minority founded businesses could grow the British economy by £75bn.

Furthermore, QU notes the practice of reporting is essential for assisting female entrepreneurs of colour, whom according to the British Business Bank are less likely to post profitability, with only 65% of Asian-female founded SMEs and 64% of Black-female businesses reportingprofitability last year. According to the Hatch enterprise, 19 out of 20 female founders of colour will fail over a three-year period, further compounding the issue.

Marla Ubhi, Co-Founder of QU, comments on the barriers for female and ethnic minority led SMEs:

“Britain’s inclusive business practices have driven us towards progress over the past couple of decades, however, the culture encourages women and people of colour to get their foot in the door, only to leave them without support once they step in. For far too long, these groups have had to focus on survival with minimal assistance.

For female start-up founders, little has changed in terms of acquiring finance and external support from the government and VCs to take their businesses to the next level and scale effectively, the issue is far worst for the ethnic minority community. We designed QU to be an inclusive confidence-inspiring personal and business brand-building programme for everyone, enabling our community of like-minded entrepreneurs to break through the barriers.”