Stats & Steps For Closing The Ethnicity Pay Gap

Published by:
Kayla Ihrig
April 4, 2022
12
 min read

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You want your employees to all have equal opportunities.

Your company believes that everyone deserves a shot at attaining a senior or board-level position within the company. In your ideal world, your company would be diverse at every level. 

Yet, it’s not happening, is it? 

People that belong to underrepresented ethnicities still regularly run into glass walls and ceilings, something that’s clearly supported by the ever-present differences in average yearly income.

Here’s what your organisation can do to close that ethnicity pay gap and take action right away.

What is the ethnicity pay gap?

The ethnicity pay gap is the difference in average yearly income within a given workforce between someone belonging to the demographic majority and someone belonging to any of the ethnic minority groups. 

A common misconception about the ethnicity pay gap is that this gap is a reflection of unequal pay (i.e. receiving a lower salary while doing the same work). Wage gaps between workers performing the same job do exist, but it’s not the root cause of the ethnicity pay gap. 

What the ethnicity pay gap truly represents is unequal opportunities. 

It indicates that positions with the highest annual earnings are generally held by white men, and not those belonging to diverse ethnic groups. 

While diversity for entry level positions is more common, statistics show that the same isn’t true for positions at the senior or board levels. 

Think back: have you ever worked at a company that didn’t have any Black women in management, senior roles of leadership? Yet, Black women were common in the office support staff roles? I know I have. 

You could probably find 1,000 movies and television shows where this plays out, too. 

We’ve heard this story before. It’s known as occupational segregation, and when groups are divided by ethnicity, it’s the root cause of the pay gap. It doesn’t start or stop with Black women, either. 

We all know the ethnicity pay gap indiscretion to be true when we reflect on our own personal experience, and the wage gap statistics show how shocking and urgent this really is.

Quick ethnicity pay gap statistics

Many conversations around closing the ethnicity pay gap overly focus on the statistics while skimming over the causes and solutions for closing the economic divide. 

This won’t be one of those conversations, but I’d be remiss to not touch on some pay gap reporting before moving into the action plan. 

  • According to a 2020 population survey, the mean pay gap in the United Kingdom was 26.4% and the median pay gap was 28.8%. Across the entire spectrum, underrepresented ethnicity workers earned significantly less per year than white men. 
  • In the US, Hispanic or Latinx people make up 37% of building and grounds maintenance and cleaning occupations, all of which are low-paying positions. This is one of the most perpetuated examples of occupational segregation in the US today. 
  • As of 2019, only 19% of UK employers even reported on ethnicity pay. Lack of reporting makes bottlenecks onerous to identify and difficult to change. 

When you look at the median income within almost any given workforce, it’s clear that a person belonging to an underrepresented ethnic group is still paid less than someone that is part of the demographic majority. 

This glass ceiling must be actively shattered, and the data is clear on how to do it. 

How to close the ethnicity pay gap

At first glance, there seem to be many approaches to closing the ethnicity pay gap. 

You can enforce organisational diversity by imposing quotas

Or you can choose to fix the root of the problem by creating equal opportunities for everyone. 

While quotas do increase diversity in the short term, they are very much a surface-level solution that fails to enact lasting change. 

Imposing quotas do little to break down the barriers that make the playing field unequal in the first place. 

Additionally, raising one underrepresented group through instating a favourable quota might accidentally harm another. 

The only way to create meaningful change is to stop treating diversity itself as a goal and start seeing it as a desirable and unavoidable result of a fair hiring process. 

Only by fixing the process and by creating equal opportunities for all parties within the workforce can true diversity, and eventually inclusion, be accomplished. 

In order to close the ethnicity pay gap from the ground up, your organisation needs to work on three things: 

You might have diversity at entry level positions, but is there a point at which that disappears? The data says that there probably is, and if you pretend it isn’t there, you become a part of the problem. 

Your organisation must take an active role in closing your ethnicity pay gap. Only by addressing and tracking the hiring process can true diversity and equality be increased across your organisation at all levels. 

Diversity in your pool of applicants

Creating true equality starts with attracting a diverse group of applicants. After all, how can you hire a more diverse workforce if there is no diversity in the people that apply? 

Here are three action items for attracting a more diverse group of candidates. 

Advertise to a diverse group of people

When you post your job advertisement, who are the people that normally see it? Are you mainly posting in spaces that are dominated by the demographic majority? 

If you want a more diverse group of people, start listing job openings on more diverse platforms. There are many job boards that specialise in diversity hiring: 

Specialist job board examples

Show your diversity efforts and initiatives on your careers page

Your careers page is an important factor in a candidate’s decision to apply. The way you position your organisation determines whether a candidate decides to work with you or your competitor. 

A LinkedIn study showed that not knowing what an organisation is like on the inside is the number one reason for rejecting a job offer. It also shows that 75% of job seekers check out a company’s career page before even applying.

A lack of diversity repels applicants. A survey by Glassdoor showed that 32% of applicants would not apply to a job at a company that lacks a diverse workforce.

The data speaks for itself. If you want a diverse group of applicants, make sure your organisation makes an impression as one that values inclusion and diversity. 

Paint a genuine picture of what it’s like to work for your organisation. The better you do this, the more diverse your applicants will eventually be. 

Write inclusive job descriptions

You didn’t see this one coming, did you? It’s a stealthy killer in your hiring process. Your job descriptions have a direct impact on the demographic that considers a job at your organisation. 

To make your job listings as inclusive as possible, first lower the requirements to key requirements only. 

Out of the requirements you listed in your last job description, how many of them were essential and how many were just niceties? 

Unnecessary requirements as well as subconscious choices, like the language you use, influences who applies. 

For example, requiring someone to be a native speaker of English excludes anyone who speaks English as a second language. Rephrase your job description by using the word fluency to make your listing more inclusive and garner a higher volume of applicants. 

The steeper the requirements, the less likely an applicant from an underrepresented demographic is to apply. 

Reasons candidates don't apply for jobs (chart)

Next, let go of the required education and experience requirements.  

I know! The idea of letting go of perceived essentials like this may seem outrageous at first but as long your assessment methods are predictive, your organisation has nothing to worry about. 

Research has shown that education and past job experience are poor indicators of future performance, so why make them a factor in the first place?

Let’s face it: bragging rights like attending top universities are flashy, but top universities are not known for their diversity. A 2017 survey showed that 80% of Oxbridge attendees came from the most privileged groups. Yet, seeing Oxford or Cambridge on a CV would likely float an applicant to the top of the list. 

A perfectly suitable candidate from a less privileged background is less likely to have attended top schools and is therefore at a disadvantage. Plus, if a factor doesn’t matter to the position itself, why even spend your time on it? 

Individually these factors might sound just sound like minutia, but let’s add them up: 

  • Poor recruiting 
  • No display of company values 
  • Uninclusive job descriptions 
  • Starchy requirements 

Summed up, these micro transgressions amount to a homogeneous pool of applicants and a lack of diversity at every single level of your organisation. 

But checking these boxes isn’t enough to end up with a completely diverse workforce at every level, ending your ethnicity page gap indiscretion. 

Once you have a more diverse pool of applicants, the interview and hiring processes also need to be debiased. 

How to implement a fair and predictive hiring process

Despite years of unconscious bias training, the traditional hiring process is still broken. 

The only way to create meaningful change in closing the ethnicity pay gap and truly embracing diversity and inclusion is to revisit the hiring process as a whole. 

That includes screening your diversified pool of applicants in the right way. 

Anonymize the screening process

What use is having a diverse group of applicants if diversity is killed at the screening stage?

Studies have shown that even something as negligible as having a foreign-sounding name can unfairly disadvantage applicants. 

This ripple effect is further exaggerated with every single piece of information a candidate provides. 

The scales are tipped for or against them as more and more particulars are revealed about themselves, such as: 

  • Whether they’re a man or woman 
  • If they were born in your country or not 
  • Where they went to school 
  • The name of the last company that they worked for 
  • What they look like 
  • Their age 

The statistics don’t lie. Almost every piece of information about a candidate leads to unconscious bias, and only by keeping the amount to a bare minimum can you ensure a fair process.

Extra CVs needed to get a callback (chart)

In order to create an anonymous and fair screening process, you must remove any personal information from CVs. We recommend going as far as assigning numbers to each candidate instead of names. 

We can help automate this for you. Book a free Applied demo today. 

Fix your interviews

The interview is commonly thought of as the moment when you truly get to know a candidate. You get to ask them questions and based on their answers, you try to get a clear picture of how they would behave in the position. 

If this is so important, why wait for the interview? Move this focus on assessing skills up to the application process. 

The most predictive way to do this is by asking work sample questions at the time of application:

Example work sample question

If you’re not sure where to start, grab our work sample cheat sheet

Then, by the time a candidate does get to the interview, they’ve already passed through the most predictive form of screening and they’re ready to be asked even more pointed questions about the position. 

Questions that are predetermined and regimented between applications. I’m talking about structured interviews, which avoid go-with-the-flow questioning and instead result in…

  • Every candidate being asked the same set of questions and in the same order.
  • Candidates’ answers then being scored using a premade scoring rubric.
  • Multiple interviewers being present to make scoring more objective. 

An interview process like this one enables you to assess a candidate’s performance using actual data. You walk away with a clear, objective picture of which candidate is most suitable for the job.

When done correctly, interviews have immense predictive value and contribute to a hiring process that’s fair for everyone. 

This process works as well for your part-time marketing intern as it does for your full-time CFO. Data-proofing your entire approach to finding and vetting candidates at every single level of your organisation is the only way to close your company’s ethnicity pay gap. 

Track diversity

If you want to keep track of diversity within your organisation, you need data. 

In order to get data, you need to measure diversity.

Here at Applied, candidates are presented with an equal opportunities form at the beginning of the screening process. This is what we recommend for you, too. 

The first thing a candidate sees is an explanation of the reasons they are presented with this form, as well as an assurance that the information they provide will be confidential. Filling out this form is both anonymous and optional. 

Applied platform diversity data (screenshot)

Through the use of equal opportunity forms, it’s possible to track sensitive pieces of information such as ethnicity and social class without isolating potential candidates.

With this information, it becomes possible to take a critical look and, where necessary, adjust the hiring process at your organisation. 

If a specific job listing only attracts men, then maybe it contains gendered language we overlooked. 

Likewise, if the pool of candidates suddenly sees a sharp drop in diversity after the interview round, then you know where to improve.

If you’re unfamiliar with equal opportunity forms, don’t hesitate to use ours

How can Applied help?

We are helping organisations close all of their pay gaps, from ethnicity to gender to race.

Side effect: it also results in companies not hiring the wrong people anymore. Consider yourself warned. 

At Applied, we’re making the hiring process as fair and effective as possible for everyone. 

Using assessment methods with a solid foundation in behavioural science, we help companies improve their hiring practices and stop overlooking their best candidates and improving ethnic diversity. 

We’ve seen all of the diversity hiring mistakes in the book, and we want to help your organisation make the changes that will have a real impact. 

From writing your job descriptions to getting the right people to apply, your ethnicity pay gap needs addressed Take action now by booking a free Applied demo to start closing it yourself.