EPG 2025 Report Dec 25

UNIVERSITY OF EAST LONDON

BRIDGING THE GAP: CLOSING THE ETHNICITY PAY GAP IN THE UK

A SECTOR REPORT FROM THE 2025 ETHNICITY PAY GAP (EPG) CONFERENCE REPORT

Produced by: OFFICE FOR INSTITUTIONAL EQUITY, UNIVERSITY OF EAST LONDON

Leadership & Convening DR JUMMY OKOYA

Dean of the Office for Institutional Equity, University of East London

Written and Collated by: SAMSON OLAGBAMI

Associate Director of EDI, Office for Institutional Equity, University of East London

With contributions from Senior Leaders, Researchers, Practitioners and Policymakers from across the UK and International sectors, including: PROF DENISE HAWKES PROF. DAVID MBA SHAUNA ROPER PROF. JASON ARDAY BERNADETTE THOMPSON RICHARD DENETTO (Full list in Appendix G - Page 40)

TABLE OF CONTENT

CASE STUDIES & BEST PRACTICES 05 INTRODUCTION 01 02 03 04

UNDERSTANDING EPG

BARRIERS TO PROGRESS & PRACTICAL ACTIONS

FROM POLICY TO PRACTICE: WHAT WORKS

06 07 08 09 10

RECOMMENDATIONS FOR EMPLOYERS

RECOMMENDATIONS FOR GOVERNMENT & POLICYMAKERS

EMBEDDING SUSTAINABLE CHANGE

CONCLUSION

APPENDICES

Institutional Context

This report is published as part of the University of East London’s commitment to Vision 2028, where social justice, equity and sustainability are cross-cutting priorities shaping how the University educates, employs and engages.

How to cite this report:

Office for Institutional Equity (2026). Bridging the Gap: Closing the Ethnicity Pay Gap in the UK. Written by Samson Olagbami. University of East London.

DR JUMMY OKOYA DEAN’S FOREWORD

The ethnicity pay gap is one of the most visible indicators of how inequality continues to be produced and reproduced across our society. It is not simply a question of pay, but of access to opportunity, recognition, progression and power. At the University of East London, we understand that these issues sit at the heart of our mission as a civic, socially-just university rooted in one of the most diverse and dynamic communities in the country. This report emerges from the 2025 Ethnicity Pay Gap Conference, convened by the Office for Institutional Equity as part of our commitment to make social justice a cross-cutting priority of UEL’s Vision 2028. We brought together leaders from across sectors because we believe that addressing racialised economic inequality requires more than compliance, statements or one- off initiatives. It requires system-level leadership, data-driven accountability and the courage to redesign how organisations actually work. As Dean of Institutional Equity, I see every day how structural inequities shape people’s life chances not only in the workplace, but across education, health, housing and access to opportunity. The ethnicity pay gap reflects the cumulative impact of these forces. It is not an anomaly. It is the outcome of how institutions recruit, develop, promote and value people. That is why closing it is not an HR exercise, but a test of leadership integrity and organisational purpose.

At UEL, we believe that equity and sustainability are inseparable. Institutions that fail to create fair pathways into leadership, high-value roles and decision- making positions undermine their own resilience, innovation and credibility. By contrast, organisations that design for inclusion build trust, unlock talent and strengthen long-term performance. This principle sits at the core of our work through the Office for Institutional Equity and across the University. This report offers more than diagnosis. It brings together evidence, lived experience and practical insight to support leaders, policymakers and organisations to move from intention to impact. The voices captured here reflect both the urgency of the challenge and the possibility of change when equity is treated as a strategic priority rather than a peripheral concern. I am grateful to all those who contributed their time, expertise and honesty to this work. I hope this report serves not only as a resource, but as a catalyst encouraging organisations across the UK to take bold, accountable and sustained action to close the ethnicity pay gap and to build workplaces that are fairer, stronger and more just. At UEL, we will continue to play our part in this work, using our position as an anchor institution in East London and a global university to advance social justice, institutional equity and meaningful change. Dr. Jummy Okoya Dean of the Office for Institutional Equity University of East London

SHAUNA ROPER FOREWORD

As a panellist at the Ethnicity Pay Gap Conference 2025, I was encouraged by the clarity, urgency, and conviction reflected in our discussions. The ethnicity pay gap remains one of the clearest indicators of persistent structural inequality in the UK workforce. Awareness is no longer our barrier; the real challenge is our collective response. This report, Bridging the Gap: Closing the Ethnicity Pay Gap in the UK, reflects both the progress achieved and the decisive action now required. Across sectors, organisations are beginning to confront the uncomfortable realities embedded within their systems, cultures, and decision-making structures. Yet this progress remains inconsistent often driven by the commitment of isolated leaders rather than embedded within organisational frameworks. The evidence is unequivocal: when leaders choose transparency, set clear accountability mechanisms, and integrate equity into strategic and operational decisions, measurable progress follows. The work of initiatives such as Change the Race Ratio reinforces this point: focused scrutiny, robust data, and consistent action are what drive sustainable improvement. Diversity and inclusion must shift from statements of principle to strategic imperatives that shape governance, workforce planning, and organisational culture.

This report draws upon quantitative evidence, lived experience, and sector expertise to illuminate both what is working and where urgent gaps remain. It is not a narrative of deficit, but of potential demonstrating what becomes possible when organisations act with intention, rigour, and integrity. Closing the ethnicity pay gap is not symbolic; it is a structural and economic necessity. It strengthens organisational performance, builds trust, widens opportunity, and ensures that talent is nurtured and recognised equitably. Most importantly, closing the ethnicity pay gap is not only about parity in pay. It is about equity in opportunity, representation, and decision-making power. It is about creating systems in which individuals from all ethnic backgrounds can progress, lead, and thrive. To bridge the gap, we must sustain our efforts with courage, consistency, and collaboration. Meaningful change is not only possible it is already happening where leadership is transparent, accountable, and unwavering in its commitment to equity. The pathway forward is clear. What remains is the will to act. Shauna Roper Panellist, Ethnicity Pay Gap Conference 2025 October 2025

Shauna Roper Business & EDI Advisor

RICHARD DENETTO FOREWORD

An ethnicity pay gap acts as a handbrake on economic growth at a time when the UK needs its economy firing on all cylinders. As this report shows, these gaps are driven largely by a lack of ethnic minority representation in senior, higher-paid roles and an over-representation in lower-paid ones. This underrepresentation in leadership is more than a fairness issue; it is an economic loss and a strategic risk. UK businesses are leaving billions in potential value untapped. The McGregor-Smith Review estimated that fully utilising ethnic minority talent could add £24 billion or 1.3% of GDP to our economy every year. We cannot afford to wait. Today, one in five Britons identifies as non-white, and the UK is set to become even more diverse. Business in the Community projects that by 2051, one-third of the population will come from an ethnic minority background. The choices companies make now will determine whether they are prepared for that future or resigned to playing catch-up. Since 2020, Change the Race Ratio founded by Lord Bilimoria, has

advocated for greater ethnic minority representation in business leadership. A core principle of our campaign is the power of data and the necessity of setting clear, public targets. Ethnicity pay gap reporting is a critical tool for any organisation serious about building an inclusive workplace. It signals commitment, exposes disparities, and drives accountability. The evidence is unequivocal: targets work. Through Change the Race Ratio, ethnic minority representation in senior management amongst members has risen from 9% to over 15% in just four years. Similarly, the Parker Review and the FTSE Women Leaders Review have helped to ensure that non-diverse boards are now a thing of the past in the FTSE 350. Understanding the demographics of your workforce and how those demographics shape people’s experiences at work is essential to unlocking productivity. It is time to make this standard practice, not the preserve of the 1–2% of leading organisations already prepared to release the handbrake on productivity.

Richard DeNetto CEO, Change the Race Ratio

EXECUTIVE SUMMARY

Key Findings The ethnicity pay gap in the UK remains a persistent and visible indicator of deeper systemic inequities across all sectors. Despite increased awareness and isolated progress, ethnic minority employees continue to be overrepresented in lower- paid roles and underrepresented in leadership and decision-making positions. Many organisations report improvements in their pay gap figures, but these headline statistics often mask ongoing disparities in career progression, representation, and structural inclusion. A critical barrier to meaningful progress on the ethnicity pay gap is the lack of contextual understanding within organisations about the root causes of inequality. While national-level data can provide broad insights, it often masks important local dynamics, workplace cultures, and systemic issues. One such issue is the persistence of societal stereotypes and occupational role grouping, where certain professions are still perceived as more suitable for men or for women. This reinforces the concentration of specific groups, particularly women and ethnic minorities, in lower-paid or lower-status roles, restricting mobility and contributing to entrenched pay disparities. To address these challenges, organisations must go beyond surface-level data and invest in understanding the unique barriers within their own structures, practices, and cultures, enabling more targeted and sustainable action.

Another barrier to meaningful change is the lack of accurate, granular, and transparent data. Geography, such as regional pay disparities and the "London effect," further complicates analysis. These challenges highlight the urgent need for organisations to collect their own high-quality ethnicity pay data, benchmark against best practices, and confront systemic biases within their own structures. Core Recommendations To close the ethnicity pay gap, this report offers a set of practical and strategic recommendations, including: Mandatory, standardised ethnicity pay gap reporting for all employers. Investment in robust internal data collection and disaggregated analysis. Clear leadership accountability for closing pay gaps, supported by transparent governance. Targeted development and progression initiatives for underrepresented ethnic groups. Co-designed action plans with employees, focusing on long-term, systemic change. Integration of intersectional analysis to address overlapping barriers related to race, gender, disability, class, and socio- economic background.

EXECUTIVE SUMMARY

Urgency and Call to Action

Addressing the ethnicity pay gap requires more than just policy compliance or data collection, it demands a fundamental shift in how organisations understand inequality and act on it. Institutions and organisations are not isolated systems; they are microcosms of society, reflecting and often reinforcing wider societal norms, stereotypes, and inequities. This gives them both the opportunity and the responsibility to be agents of change. By actively challenging occupational stereotypes, dismantling role-based assumptions, and interrogating how structural and cultural barriers manifest internally, organisations

can reshape narratives about who belongs where, and why. This work begins with honest reflection: understanding the specific barriers within each organisational context, acknowledging uncomfortable truths, and committing to sustained action. Leaders must prioritise equity as a strategic imperative, embed accountability at every level, and engage meaningfully with staff, particularly those from underrepresented and marginalised backgrounds. Now is the time for bold, context-driven leadership that drives transformation from within.

“The status quo is not neutral; inaction is a choice.”

1. INTRODUCTION

BACKGROUND AND PURPOSE OF THE REPORT The ethnicity pay gap in the UK is not simply a matter of earnings. It is a structural indicator of how opportunity, progression and leadership are distributed across the labour market. It exposes deep-rooted patterns of occupational segregation, unequal access to senior roles, differential career progression and exclusion from influential professional networks. While awareness of these issues has increased and many organisations have made public commitments to equity, progress has been inconsistent and too often slow. This report, Bridging the Gap: Closing the Ethnicity Pay Gap in the UK, draws on the insights, evidence and practical experience shared at the 2025 Ethnicity Pay Gap Conference, hosted by the University of East London’s Office for Institutional Equity. Its purpose is to move the conversation from intention to impact. By focusing on leadership, data, organisational culture and accountability, the report provides a strategic framework for employers, policymakers and sector leaders seeking to deliver measurable and sustained change. Rather than treating the pay gap as a technical reporting issue, the report positions it as a test of organisational fairness, leadership integrity and long-term sustainability. CONTEXT: ETHNICITY PAY GAP IN THE UK The ethnicity pay gap has gained increased attention in recent years, driven by wider public debate about racial justice, economic inclusion and workplace equity. However, national datasets continue to provide only a partial picture of the scale and nature of the problem. For example, the Office for National Statistics dataset covering 2012–2022 is based on a relatively small sample of the working population and has been widely criticised for its limited granularity and lack of intersectional analysis. Aggregated national figures often conceal significant variation between ethnic groups, regions, industries and organisational levels. They also do little to explain the mechanisms that produce unequal outcomes. What is increasingly clear is that ethnicity pay gaps are rarely about unequal pay for the same job. They are primarily driven by unequal access to higher-value roles, leadership positions and progression pathways.

“The causes of ethnicity pay gap are systemic and structural. Complexity must not be an excuse for inaction” – Shauna Roper

INTRODUCTION

Ethnic minority employees are disproportionately concentrated in lower-paid, less secure roles and remain under-represented in senior and decision-making positions. These patterns are shaped by a combination of organisational practices and wider social dynamics, including informal networks, proximity bias, cultural exclusion and persistent stereotypes about who is seen as “leadership material.” Long-standing assumptions about which roles and professions are appropriate for particular groups continue to influence recruitment, development and promotion, reinforcing inequality across the workforce. Understanding and addressing these structural drivers is essential if the ethnicity pay gap is to be closed in a meaningful and sustainable way.

EQUAL PAY AND THE ETHNICITY PAY GAP

It is important to distinguish between equal pay and the ethnicity pay gap, as they address different aspects of pay inequality and require different approaches. Equal pay refers to the legal requirement that individuals doing equal or comparable work must receive equal remuneration, regardless of gender, ethnicity, or any other protected characteristic. It focuses on direct comparisons, ensuring that two people performing the same or similar roles are paid fairly and without discrimination. Equal pay is governed by legislation such as the Equal Pay Act 1970 and the Equality Act 2010 and can often be identified and addressed through individual cases or legal redress. In contrast, the ethnicity pay gap (EPG) is a broader measure. It reflects the difference in average earnings between ethnic minority groups and their white counterparts across an organisation or workforce, regardless of role. The EPG is not necessarily about unlawful discrimination in individual pay decisions, but rather about the distribution of people across roles, grades, and pay bands. It highlights systemic issues such as underrepresentation in leadership, overrepresentation in lower-paid roles, and barriers to progression. While equal pay and the ethnicity pay gap are distinct, they may be correlated in environments where bias or discrimination shapes both pay-setting and access to opportunities. For example, if certain ethnic groups are disproportionately placed in lower- paying roles or lack access to development opportunities, this can reinforce both unequal pay outcomes and wider pay disparities. This report focuses specifically on the ethnicity pay gap, its causes, implications, and the strategies needed to close it. While equal pay remains a fundamental legal and ethical obligation, the EPG offers a window into structural inequality that extends beyond individual cases and points to the need for systemic reform.

“Pay equity is about social cohesion. It is about trust” – Professor David Mba “You narrow the gap by being intentional about what you can influence.” – Shauna Roper

INTRODUCTION

AIMS AND SCOPE The primary aim of this report is to move beyond headlines and provide a detailed, action- oriented framework for addressing the ethnicity pay gap across sectors. Specifically, this report seeks to: Clarify the structural roots of the ethnicity pay gap and dispel common misconceptions. Explore the role of leadership and systemic accountability in driving sustainable change. Highlight best practices in data collection, action planning, sponsorship, and governance. Provide sector-wide recommendations that balance ambition with practicality. Incorporate an intersectional lens to ensure strategies are inclusive of the full range of identities and experiences. The scope of the report includes insights from a range of professional sectors, HEIs, finance, public services, healthcare, creative industries, and more, while reflecting the lived realities of employees navigating overlapping barriers based on race, gender, disability, and socio- economic background.

“We know the issues; we know what needs doing. Why isn’t it happening?” – Professor David Mba

METHODOLOGY AND SOURCES

This report is grounded in a combination of expert insight, sector-specific research, and practical experience. It draws heavily on the rich discussions and strategic recommendations shared by esteemed panellists at the Ethnicity Pay Gap Conference 2025, hosted by the University of East London’s Office for Institutional Equity (OIE). These contributors brought diverse perspectives from higher education, the private sector, policy, and community advocacy, offering lived experiences, organisational case studies, and forward-thinking solutions. In addition to the conference proceedings, the report integrates data and insights from a range of reputable sources, including: The Office for Institutional Equity (OIE) – providing thought leadership and research on structural equity in education and employment. Inclusive Employers – offering evidence-based practices and frameworks for building inclusive workplace cultures. Chartered Management Institute (CMI) – contributing research on inclusive leadership and organisational accountability. Change the Race Ratio – supplying key data on board and senior leadership representation, transparency practices, and ethnicity disclosure trends.

INTRODUCTION

This multi-source approach ensures a comprehensive understanding of the ethnicity pay gap, linking national and sectoral trends with real-world organisational experience. The report aims to synthesise these findings into practical, evidence-informed guidance for employers, policymakers, and practitioners committed to long-term, systemic change. Panellists present at the EPG Conference, that have contributed directly and indirectly to this report:

1.Professor David Mba 2.Shauna Roper

3.Bernadette Thompson OBE 4.Professor Denise Hawkes 5.Anthony Horrigan 6.Pauline Miller 7.Dr. Nero Ughwujabo 8.Addison Barnett 9.Vivienne Artz OBE 10.Helene Reardon-Bond OBE 11.Dianne Greyson

See a detailed list in Appendix G (Page 40)

2. UNDERSTANDING ETHNICITY PAY GAP HISTORICAL AND STRUCTURAL CONTEXT

The ethnicity pay gap is a longstanding issue rooted in structural, institutional, and societal inequities. It reflects historical patterns of exclusion that continue to shape access to opportunity, workforce participation, and the value placed on different types of work. These include: Racialised labour market segmentation. Unequal access to education, networks, and financial capital. Discriminatory recruitment, pay-setting, and performance management. Cultural bias and proximity-based privilege in decision-making. Historically, racialised labour market segmentation has steered ethnic minority groups into lower-paid, less secure, or less visible roles, often limiting upward mobility. This has been compounded by unequal access to high-quality education, influential professional networks, and the financial capital required to navigate and advance in many careers. Cultural stereotypes and role assumptions continue to influence who is seen as “suitable” for certain jobs, reinforcing occupational clustering and limiting diversity in senior roles. Informal hiring, geographic disparities in opportunity, and narrow definitions of “fit” further entrench these patterns. THE SYSTEMIC NATURE OF THE PAY GAP Organisational systems, from recruitment pipelines to leadership selection, are often designed around a default majority profile, inadvertently locking out those from racially minoritised backgrounds. This leads to: Proximity bias, where those physically or culturally “closer” to leadership receive more opportunities. Gatekeeping by informal networks, which exclude diverse talent from development opportunities. A lack of transparent criteria in hiring and promotions, enabling bias to flourish unchecked.

“Transparency without action can breed mistrust.”

“Fair pathways into leadership don’t just transform organisations they transform student ambition and belonging.” Dr Jummy Okoya

UNDERSTANDING EPG

WHY CLOSING THE ETHNICITY PAY GAP MATTERS Economic Impacts: Research has shown that a more diverse and inclusive workforce increases productivity and innovation, improves decision-making and risk management and drives stronger financial performance. Social Justice and Equity: At its core, closing the ethnicity pay gap is a question of fairness, dignity, and trust. The persistence of pay disparities reinforces a cycle of disadvantage that starts long before employment and extends across lifetimes. It diminishes trust in organisations and public institutions and sends a damaging message about who is seen as “leadership material.” Organisational Performance and Reputation: Organisations that fail to take ethnicity pay gaps seriously risk eroding employee engagement and morale, facing reputational damage among customers, investors, and the wider public. They also potentially stand the risk of missing out on top talent from an increasingly diverse and multigenerational workforce. Employee Retention, Engagement and Belonging: Pay equity is closely linked to how employees feel valued, seen, and supported. Where inequity persists, employees from minoritised backgrounds are more likely to exit prematurely due to poor progression prospects, experience lower engagement, leading to underperformance and withhold discretionary effort or emotionally disengage. Closing the pay gap goes beyond financial fairness, it fosters psychological safety; boosts trust in leadership and affirms that advancement is possible for everyone.

"Performative inclusion drives attrition. Authentic equity drives belonging."

“The ethnicity pay gap is a mirror, reflecting not just pay disparities, but institutional trust, cultural health, and leadership credibility.” - Prof. David Mba

3. BARRIERS TO PROGRESS AND PRACTICAL ACTIONS LACK OF DATA AND TRANSPARENCY One of the most persistent barriers to addressing the ethnicity pay gap is the limited availability and quality of accurate, granular, and transparent data. While national-level datasets, such as those produced by the Office for National Statistics (ONS), can provide high-level insights, they are often hindered by methodological challenges. For example, the ONS dataset from 2012–2022 sampled less than 1% of the working population, with inconsistent methodologies and a reliance on aggregated figures that obscure meaningful differences between ethnic subgroups, regions, and occupational levels. At the organisational level, the picture is similarly constrained. Many employers do not collect detailed ethnicity and pay data, and where data is gathered, it is frequently incomplete, poorly analysed, or withheld from publication due to fear of reputational risk. This lack of transparency undermines trust, limits accountability, and leaves staff, particularly those from underrepresented backgrounds, without a clear sense of whether progress is being made or whether their concerns are being taken seriously. Even when data is shared, it often takes the form of broad headline figures, percentages devoid of context or connection to lived experience. This reductive approach risks depersonalising the issue and overlooks the structural, cultural, and interpersonal dynamics that shape disparities. Ethnicity pay gaps are not simply statistical anomalies, they are the cumulative result of deeply embedded practices and assumptions across the employment lifecycle. PRACTICAL ACTIONS FOR MAKING CHANGES Organisations must therefore move beyond compliance-driven data exercises and adopt a more critical, ethical, and purposeful approach to data use. This includes: Collecting disaggregated data to capture the experiences of different ethnic groups. Analysing data in the context of role, grade, progression, and retention. Engaging affected communities in interpreting findings and shaping responses. Being transparent with data, not just to meet expectations, but to build credibility and drive informed action.

“Publish! Be honest, include narrative and lived experience safely and meaningfully.” – Bernadette Thompson OBE

BARRIERS TO PROGRESS AND PRACTICAL ACTIONS

In short, data should not be a shield, it should be a spotlight. Used thoughtfully, it can illuminate structural barriers and guide meaningful change. Used poorly or defensively, it can obscure the very issues organisations claim to be addressing.

STRUCTURAL RACISM AND DISCRIMINATION The ethnicity pay gap is not merely a technical challenge, it is a visible outcome of longstanding structural and systemic inequalities embedded within organisational cultures and wider society. It reflects not just unequal outcomes, but the cumulative effect of how opportunity, access, and value are distributed. Throughout the conference, panellists highlighted how racialised dynamics are often woven into the very fabric of workplace systems and norms, including: Gatekeeping through informal networks that determine who is seen, heard, and supported, often to the exclusion of minoritised staff. Proximity bias, which favours individuals who are either physically present in power centres (e.g. head offices) or culturally aligned with those in leadership. Recruitment practices that rely on subjective notions of “culture fit” rather than evidence of competence, narrowing the entry point for diverse talent. A persistent pattern where ethnic minority employees are over-mentored but under- sponsored, receiving advice without the advocacy required to access leadership roles and opportunities. These issues are not incidental. They are symptoms of systems that reward familiarity, comfort, and conformity, often penalising difference, innovation, and alternative leadership styles. Structural racism operates not only through explicit exclusion, but through the normalisation of practices that disadvantage those outside dominant groups. Policies alone cannot dismantle these dynamics. Progress requires organisations to critically examine how their structures, both formal and informal, shape who advances, who is valued, and who is left behind. It also demands courage: to challenge long-held norms, interrupt bias even when it is inconvenient, and actively create cultures where equity is not just an aspiration, but a lived reality.

PRACTICAL ACTIONS FOR MAKING CHANGES

Conduct a comprehensive audit of recruitment practices by reviewing job adverts and person specifications for biased language, assess shortlisting and interview data by protected characteristics and then identifying patterns of exclusion or advantage at each recruitment stage. Recruitment and Hiring Practices

BARRIERS TO PROGRESS AND PRACTICAL ACTIONS

PRACTICAL ACTIONS FOR MAKING CHANGES

Implement inclusive recruitment strategies by using diverse hiring panels, anonymising applications during initial screening and including structured interview questions with scoring rubrics to reduce subjectivity. Track and report recruitment outcomes regularly and share outcomes transparently with leadership and staff, followed by setting goals for improving diversity in applicant pools and hires. Recruitment and Hiring Practices Career Development and Promotion Define and publish clear career development pathways through outlined competencies and expectations for progression, offering development plans tailored to individual goals and roles. Introduce transparent promotion metrics and processes to ensure all staff understand criteria for promotion and provide feedback and support to those not promoted. Conduct regular audits of promotion data and analyse outcomes by ethnicity, gender, disability, etc. looking out for trends in who is or isn't being promoted, and at what pace. Mitigating Bias in Performance and Progression Set up review panels for performance scoring and review scores for consistency across departments, identifying and challenging anomalies or patterns of bias. Conduct random sampling of annual appraisals to ensure performance assessments are fair and evidence based. Provide calibration training for line managers if needed. Mandatory bias training for managers and reviewers which focus on performance reviews, promotion decisions, and feedback delivery. Ongoing Monitoring and Accountability Create an internal task force or working group: Set KPIs and monitor progress e.g. link diversity and inclusion metrics to senior leadership performance objectives. Report progress to staff regularly to build trust and show accountability through consistent communication.

Ultimately, closing the ethnicity pay gap is not only about redistributing pay, but also about rebalancing power.

“Use your sphere of influence to take action. Talent is watching, communities are watching” – Bernadette Thompson OBE

BARRIERS TO PROGRESS AND PRACTICAL ACTIONS

LIMITED REPRESENTATION IN SENIOR ROLES One of the most visible and persistent manifestations of the ethnicity pay gap is the lack of ethnic minority representation at senior levels. While many sectors have made progress in diversifying entry-level recruitment, this diversity often fails to translate into leadership. The data, and lived experience, consistently reveal: Strong ethnic diversity at junior levels, often concentrated in operational or support roles. Steep drop-offs at middle management, where decision-making influence begins to emerge. Minimal presence at executive and board levels, where strategic direction and power are consolidated. This pattern reflects a “broken pipeline” in which talented individuals are systemically stalled or diverted at key transition points. The absence of diverse leadership signals more than just a representation gap, it sends a powerful message about who is valued, who belongs, and who has the authority to lead. The consequences are significant. When staff do not see people who look like them or share similar lived experiences in positions of power, it can undermine confidence, engagement, and aspiration. This fosters mistrust in organisational commitment to equity and contributes to cycles of attrition and underrepresentation that reinforce existing disparities. Crucially, leadership representation is not merely symbolic, it actively shapes how organisations function. It determines: Whose voices are heard and validated in strategic conversations. Whose potential is recognised and invested in. Which issues are prioritised and how inclusion is resourced and embedded.

PRACTICAL ACTIONS FOR MAKING CHANGES To close the ethnicity pay gap, organisations must move beyond pipeline rhetoric and interrogate the structural and cultural conditions that prevent

progression. This includes:

Rethinking leadership criteria, Investing in equitable development pathways, Driving leadership accountability using data insights Creating environments where diverse leadership is the norm, not the exception.

BARRIERS TO PROGRESS AND PRACTICAL ACTIONS

CULTURAL RESISTANCE AND LACK OF BUY-IN Despite growing awareness of the ethnicity pay gap, efforts to address it often encounter resistance, both overt and subtle. This resistance can stall progress, dilute impact, and shift attention away from the structural change required. It is not always loud or oppositional; more often, it emerges in the form of hesitation, minimisation, or performative gestures. Panellists at the conference highlighted several common forms of resistance: A reluctance to name racism or acknowledge how bias operates within systems. The use of tokenistic language or symbolic diversity statements without sustained follow- through. Fatigue or defensiveness among majority-group leaders when confronted with uncomfortable truths about inequality and privilege. These dynamics are not unique to any one sector, they are common challenges in equity work across the board. At their core, they reveal a tension between organisational aspiration and the discomfort of transformational change. Naming these tensions is essential, but so too is creating structures that sustain momentum beyond individual enthusiasm. Without visible, senior-level commitment and a sense of shared responsibility across teams, EDI efforts risk becoming siloed or deprioritised. Equity cannot be framed as an ‘HR issue’ or the remit of a single department, it must be positioned as a core business imperative. PRACTICAL ACTIONS FOR MAKING CHANGES Many panellists advocated for practical mechanisms to embed accountability, including: Integrating equity goals into executive scorecards and performance reviews. Linking pay equity progress to organisational objectives and KPIs. Ensuring regular, transparent reporting on actions taken and outcomes achieved.

True accountability means creating systems where progress is expected, measured, and rewarded, just like any other strategic priority. Resistance should not be seen as a barrier, but as a signal that change is happening, and that it must be stewarded with clarity, persistence, and leadership from the top.

BARRIERS TO PROGRESS AND PRACTICAL ACTIONS

INTERSECTIONALITY AND COMPOUNDED INEQUITIES Efforts to address the ethnicity pay gap often fall short when they adopt a one-size-fits-all approach to diversity. Such approaches fail to account for the complex, overlapping identities that shape how individuals experience exclusion, opportunity, and advancement. Ethnicity does not operate in isolation, it intersects with other aspects of identity such as gender, disability, class, nationality, and educational background, producing layered and compounded barriers. For example: Black women may face both racialised and gendered assumptions that affect hiring, progression, and leadership visibility. Disabled employees of colour often navigate both accessibility challenges and racial bias, resulting in exclusion from formal development pathways. Individuals from lower socioeconomic backgrounds may be further disadvantaged by lack of access to professional networks or expectations around workplace ‘polish’ and cultural fluency. Despite these realities, current reporting frameworks and interventions tend to focus on single-axis categories, limiting their effectiveness. Without intersectional data and strategies, key disparities remain hidden, particularly for those most marginalised, and are therefore not addressed in equity planning. PRACTICAL ACTIONS FOR MAKING CHANGES To move from surface-level inclusion to meaningful change, organisations must: Collect and analyse disaggregated, intersectional data to better understand how different identity groups experience the workplace. Provide targeted support, sponsorship, and progression pathways tailored to the specific barriers faced by intersectionally marginalised staff. Foster a culture that recognises complexity, moves beyond simplistic categories, and challenges assumptions that reinforce homogeneity at senior levels.

Addressing the ethnicity pay gap through an intersectional lens is not just more equitable, it is more accurate. Without this depth of understanding, strategies will continue to serve the few while leaving the most affected behind.

“What gets measured gets improved. But only if you measure what matters, segment it meaningfully, and follow it with accountability.” - Anthony Horrigan

BARRIERS TO PROGRESS AND PRACTICAL ACTIONS

SOCIETAL STEREOTYPES AND OCCUPATIONAL ROLE GROUPING One of the more insidious and often overlooked barriers to closing the ethnicity pay gap lies in the enduring influence of societal stereotypes and occupational role grouping. These are the unwritten rules and cultural norms that subtly shape how different roles, professions, and industries are perceived in terms of who is ‘naturally’ suited to them. Over time, these perceptions influence both organisational practices and individual career trajectories, often without conscious intent. Certain jobs, particularly those associated with authority, visibility, and high pay, are still predominantly associated with white, male leadership. Meanwhile, roles seen as ‘supportive,’ ‘caring,’ or ‘administrative’ are more likely to be associated with women and, disproportionately, ethnic minority employees. This clustering is not a reflection of ability or aspiration, but of limited access, exposure, and encouragement, often shaped by early socialisation, institutional cultures, and historical patterns of workforce segregation. This dynamic contributes to the overrepresentation of ethnic minority staff in lower-paid roles and the underrepresentation in decision-making positions. It also limits opportunities for progression, as individuals may be unintentionally steered into roles perceived to align with their identity rather than their potential. Furthermore, assumptions about leadership style, communication norms, or ‘cultural fit’ can hinder ethnic minority candidates in both recruitment and promotion processes. To overcome this barrier, organisations must critically examine how role expectations are formed, who is encouraged into leadership pathways, and how progression criteria may inadvertently favour certain groups. This includes challenging cultural assumptions, widening talent pipelines, and redefining what inclusive leadership looks like in practice.

“As a Black disabled woman, I don’t experience the world in siloes. The system wasn’t built for me, but I still show up. The question is, will your workplace show up for me?” - Dianne Greyson

4. FROM POLICY TO PRACTICE: WHAT WORKS Bridging the gap between intent and impact requires organisations to move from well- meaning policies to systemic, measurable, and co-created practices. Insights from the Ethnicity Pay Gap Conference 2025 reveal that sustainable progress is achievable, but only when organisations embed equity into the heart of how they operate. This section outlines the practical pillars of effective intervention.

G.A.P. FRAMEWORK by Bernadette Thompson O.B.E.

Organisations seeking to address the ethnicity pay gap must move beyond statements of intent and adopt a clear, data-informed, and accountable approach. This ‘Gather–Act–Prove It’ framework offers a strategic pathway built on transparency, targeted intervention, and cultural change.

Don’t Guess Know.

GATHER THE RIGHT DATA:

Too often, organisations start from incomplete or overly aggregated data that obscures key disparities. Identifying the true nature of the gap requires: Using precise ethnic categories. Avoid umbrella terms like "BAME" which flatten important distinctions between groups with very different experiences and outcomes. Collecting the data anyway. Even if disclosure is low, begin with what you have and build trust over time through transparency and clear communication. Segmenting data across roles, grades, departments, and locations to reveal where gaps are most pronounced and who is most affected. Incorporating intersectional analysis to understand how ethnicity interacts with gender, disability, class, and other factors. Listening to lived experience. Quantitative data must be complemented with qualitative insights to capture the human context behind the numbers. This diagnostic stage is not a one-off exercise, it must be embedded into ongoing workforce monitoring and review processes.

“Equity has to be an operational norm, not an annual campaign.” – Professor David Mba

FROM POLICY TO PRACTICE: WHAT WORKS

A: Once the problem is clearly understood, action must be targeted, measurable, and connected to wider business strategy. Equity is not a side project; it must be woven into the fabric of organisational decision-making. Intervene with Intention and Accountability Key actions include: Linking EDI outcomes to executive KPIs, scorecards, and performance reviews, ensuring accountability starts at the top. Auditing and reshaping talent pipelines to address where and why minoritised staff fall off or stagnate, particularly at mid-career transition points. Investing in meaningful mentoring and sponsorship schemes that move beyond generic guidance to active advocacy for advancement. Redesigning recruitment and promotion practices to eliminate bias and reward diverse leadership potential, not just similarity to current norms. Embedding equity checks in succession planning, performance appraisals, and development programmes. ACT WITH INTENT AND LEADERSHIP: Intent Is Not Impact.

Acting with intention means aligning equity goals with organisational priorities, not simply delegating them to HR or EDI teams.

P: Transparency is not just a compliance exercise; it is a trust-building strategy. Demonstrating progress (or lack thereof) with honesty and depth creates space for learning, accountability, and improvement. Organisations should: Publish ethnicity pay gap data regularly, alongside clear action plans and updates on progress. Include narrative context that explains what the data means, what’s being done in response, and what barriers remain. Incorporate lived experience and employee voice safely and meaningfully, ensuring that sharing personal stories is voluntary, ethical, and well-supported. Report not only on outcomes, but on processes, how decisions are made, who is involved, and what changes have been implemented. PROVE THAT IT IS WORKING: Build Trust Through Transparency

Proving it means showing your work, inviting scrutiny, and being open to change. It’s a signal that equity is not just a message, but a measurable commitment.

FROM POLICY TO PRACTICE: WHAT WORKS

DATA COLLECTION AND ETHNICITY PAY REPORTING Robust, disaggregated data is the foundation of all meaningful action on pay equity. Yet many organisations struggle with either insufficient data quality or low disclosure rates. Effective strategies include: Creating psychologically safe spaces for staff to share ethnicity data. Explaining the purpose and benefits of data collection to build trust and increase participation. Going beyond headline figures to segment data by grade, department, location, length of service, and contract type. Publishing contextualised reports that outline methodology, actions, and outcomes. LEADERSHIP AND ACCOUNTABILITY Leadership is not just a symbolic lever, it is the system’s control panel. When diversity metrics are tied to leadership KPIs, real change happens. Conference speakers consistently emphasised that: Executives should be held accountable for EDI outcomes, including ethnicity pay gaps. Performance evaluations and bonuses must reflect progress on diversity commitments. Leaders must model inclusive behaviours, from sponsoring staff to challenging bias in decision-making forums.

“What gets measured gets done, and what gets rewarded gets prioritised.” – Anthony Horrigan

“Leadership closes the gap. Nothing else really does.” – Bernadette Thompson OBE

“Leadership sets the tone. Accountability drives the action.” - Shauna Roper

FROM POLICY TO PRACTICE: WHAT WORKS

TARGETED RECRUITMENT AND PROGRESSION INITIATIVES Generic inclusion efforts rarely change outcomes. Instead, organisations must intentionally design opportunities for ethnically minoritised staff to enter, grow, and lead. Examples include: Sponsorship programmes, not just mentorship, focused on advocacy and access to high-stakes assignments. Bias-resistant recruitment practices, such as skills-based assessments, blind shortlisting, inclusive panels, and inclusive selection. Transparent pay bands and promotion criteria to reduce subjectivity and close loopholes in advancement decisions. Bernadette Thompson noted that “too many are development-programme junkies, over- trained, but under-promoted.” Development must translate into real career mobility.

INCLUSIVE PERFORMANCE AND PAY PRACTICES

The design of organisational systems, how people are recruited, evaluated, and rewarded, can either reinforce inequity or dismantle it. Effective organisations: Conduct audits of performance evaluations and pay decisions to uncover bias. Eliminate negotiation-based pay practices that disadvantage minoritised staff. Align rewards and recognition with transparent, equitable frameworks. Pay equity must be seen not as an “EDI issue” but a core operational priority, evaluated with the same rigour as finance, risk, or compliance.

EMPLOYEE NETWORKS AND SAFE REPORTING MECHANISMS

Meaningful employee voice is critical in both identifying problems and co-designing solutions. Successful organisations: Co-create action plans with staff networks, particularly those representing racially minoritised groups. Fund and empower networks to go beyond social events to shape policy and accountability. Establish confidential and trusted channels for employees to raise concerns about equity, inclusion, or bias. Networks must not be viewed as peripheral but as strategic partners in building belonging and transforming culture.

5. CASE STUDIES AND BEST PRACTICES To move from theory to transformation, organisations need not reinvent the wheel. Across sectors, several organisations have demonstrated how intentional, data-informed, and accountable approaches can make a measurable difference in closing the ethnicity pay gap. This section presents illustrative examples of what works in practice. Change the Race Ratio, launched in 2020, has shown that when organisations commit to clear targets, transparent reporting, and cultural transformation, meaningful progress in racial and ethnic diversity is achievable. The 2024 Progress Report highlights that among its signatories, comprising 30 FTSE 350 companies, 39 large private businesses, and 49 SMEs, there has been a concerted effort to set and pursue ambitious diversity goals. Key achievements include: A significant increase in the number of companies setting targets for racial and ethnic minority representation at board and executive levels. Enhanced transparency, with more organisations publishing race action plans and ethnicity pay gap data within two years of joining the initiative. The development of more inclusive cultures, supported by cross-company mentoring programs like Mission Include, which has empowered over 3,000 participants from 111 organisations globally. These outcomes underscore the effectiveness of structured commitments and peer accountability in driving diversity and inclusion. The following case studies delve deeper into how participating organisations have implemented these principles, illustrating the tangible benefits of sustained, focused action.

CASE STUDY #1: INCLUSIVE PROGRESSION STRATEGIES (KPMG)

KPMG has used a combination of data segmentation and policy reform to tackle disparities in progression. Key actions: Disaggregated progression data to identify barriers by ethnicity, location, and department. Implemented sponsorship programmes that connected high-potential ethnic minority employees with executive sponsors. Reviewed performance ratings and promotion decisions for equity and transparency. Impact: Improved internal mobility among underrepresented groups. Increased ethnic minority representation in senior leadership roles. Strengthened organisational accountability through annual progress reports.

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