5 Expert Tips on Tackling Pay Gaps

from Asad Dhunna, Founder & CEO, The Unmistakables

Over the years countless organisations have placed inclusivity or the notion of being inclusive as central to their values and objectives. To achieve this ambition means taking an insight-led approach, and pay gap data is a vital part of this. We view 'pay, reward and recognition' as a central component of Inside Out Inclusion, which is our research and behavioural-science led approach to embedding inclusion within organisations.

Fair and equitable pay requires a nuanced approach that factors in competencies, capability, benefits and of course compensation. As we saw with gender pay gap reporting, having the data is the first step in identifying the problem, the next step is to put in long-term solutions and system changes that will shift the needle for ethnic minority colleagues and for companies that want a workforce that reflects the nation. We recommend:

• Unlock the Extent of the Issue: There’s no one-size-fits-all solution to tackling ethnicity pay gaps. Tailor your approach to your company’s size, structure, and vision. Establish clear principles rooted in leadership ambition to attract top talent and back diversity statements with actionable, equitable practices.

• Understand the Historical Context: Our attitudes to money often stem from family and cultural histories. For many ethnic minority individuals, the link between colonial heritage and today’s pay gaps is significant. Addressing these gaps requires transparency and recognition of systemic inequalities, with a shared commitment to close them.

• Apply Robust Frameworks for Pay Discussions: Using structured models, like the 'ORCE' framework (Observe, Record, Classify, Evaluate), ensures objectivity in pay and performance reviews. This benefits both decision-makers and employees, helping to align expectations and decisions with clear, fair criteria.

• Equip Leaders with Cultural Confidence: Bias can creep in during performance and pay evaluations. Train line managers and leaders to have culturally aware, confident conversations about pay and reward. This involves understanding the impact of pay gaps on morale and knowing how to address them effectively.

• Commit to Long-Term Solutions: Closing the pay gap requires systemic change. Use pay gap data to implement sustainable solutions that benefit ethnic minority colleagues and align with broader organisational goals. Long-term planning will shift the needle towards fairness and equity.