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
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