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Contractors’ blind spot: The ethnic pay gap timebomb

Despite the revelations that construction has the UK’s worst gender pay gap, there is a chronic lack of data on what could be an even bigger disparity. Lucy Alderson finds out why ethnicity pay gaps need the industry’s attention.

When Paul Bogle was eight years old and thinking about what he’d do when he grew up, his dad gave him some advice he still refers back to today.

“Because you’re black,” Mr Bogle’s dad said, “you’ll have to try twice as hard in order to get the same recognition as anyone else.”

Now the National Federation of Builders’ head of policy and research, Mr Bogle describes this guidance as being “unrelentingly negative” yet also constructive. 

“When I go into a meeting where I am the only black person in the room […] you’ll see the looks of other people as if to say, ‘Someone who looks completely different has walked into the room’,” he says. “But you condition yourself to ignore this, and remind yourself that you’re around that table because you have expertise that is needed.”

Despite this, Mr Bogle describes himself as “very lucky” as one of the few non-white people to have made it into an industry boardroom.

A lack of board-level ethnic diversity is an issue many industries face, according to research conducted last year by EY for the Department for Business, Energy and Industrial Strategy.

Just 2 per cent of directors on FTSE 100 boards are from a British minority ethnic background, according to the report, which was led by Laing O’Rourke chairman Sir John Parker.

But in construction, the issue is particularly acute. BEIS data released in 2017 showed the sector’s workforce had the highest proportion of white people of any UK industry.

Around 7.9 per cent of white people currently working in the UK are employed in construction. Yet for black working people, this stands at 3.6 per cent; for Indian workers, 3.8 per cent; and for Pakistani / Bangladeshi employees, 2.2 per cent.

“When I go into a meeting where I am the only black person in the room […] you’ll see the looks of other people as if to say, ‘Someone who looks completely different has walked into the room’”

Paul Bogle, National Federation of Builders

The Office for National Statistics told CN is does not record data on the exact number of BAME workers in construction. Furthermore, there is no data currently available on the ethnic diversity of those in senior, highly paid industry roles.

One of the reasons this aspect is so important was highlighted by the revelations surrounding the industry’s gender pay gap earlier this year.

Companies employing more than 250 people were forced to publicly disclose their gender pay gaps – the difference between the average male and average female pay packets.

The construction sector was found to have the highest gap of all UK industries. Many companies suggested an under-representation of women at higher-paid senior positions had widened the disparities.

This raises the question: could the same factor be producing an ethnicity pay gap?

What is an ethnicity pay gap?

The Equality and Human Rights Commission defines the ethnicity pay gap as “the difference between the average hourly pay of ethnic minorities and white British people”.

At present, it is not mandatory for companies to publish this information. However, that may soon change. In October this year, the government launched a consultation asking companies for their views on how ethnicity pay gap reporting should be approached. The consultation closes in January, after which businesses will have a clearer picture of what information they could be asked to publish.

The industry’s current ethnicity pay gap is hard to gauge due to the lack of data.

When CN asked the UK’s 20 largest contractors by turnover whether there was an ethnicity pay gap in their business, not one was able to provide a figure. Thirteen of the top 20 said they did not record this data. Four contractors – Balfour Beatty, Bowmer & Kirkland, Laing O’Rourke and VolkerWessels UK – did not respond to the request at the time of writing.

Skanska would not confirm or deny whether it tracked ethnicity pay gap data, issuing the following statement: “We keep under regular review our pay levels to ensure they reflect our approach to equality and that there is no bias.”

Sir Robert McAlpine said it was “currently pulling together” information in this area, adding: “Therefore, we do not have any statistics that we can share at this immediate time.”

Morgan Sindall was the only contractor to stat that it currently monitors its ethnicity pay gap.

The group began collecting data in April this year, six months before the government launched its consultation. However, Morgan Sindall has not disclosed this data to CN, stating that it was in the process of being verified. The contractor also declined to be interviewed.

Morgan Sindall’s more forward-thinking approach could in part be explained by its involvement with Moving On Up, an initiative supported by the mayor of London to reduce unemployment among London’s young black men.

Moving on Up is chaired by Bola Abisogun, a fellow of the Royal Institution of Chartered Surveyors, who says construction has been identified as a key source of opportunities for young black Londoners. Morgan Sindall head of HR Dawn Moore also sits on the initiative’s construction employers group.

bame index

bame index

However, Mr Abisogun says industry engagement with the initiative and willingness to provide work opportunities for this demographic has been “abysmal” and “embarrassing”. “It’s a conversation that […] just isn’t happening,” he says. “We’re still trying to unpick why.”

He believes this reflects deep-rooted shortcomings in construction’s engagement with the BAME community. “There are some cultural, systemic issues that are prevalent in the sector,” he says. “We talk about a skills shortage, but there are areas of society – BAME included – who are available to participate but are often overlooked.”

Asked why this is the case, Mr Abisogun says: “It’s a good question […] we need to engage in a conversation about what it means to be different.”

However, he says the industry is not having the conversations needed to increase understanding among its majority-white workforce. “It’s a sensitive issue,” he says. “And it has been made more sensitive because there is an inability, or a lack of will, to have those conversations. Meanwhile, the rest of the world has moved on and construction is still a long way behind.”

However, Mr Abisogun says there has been some “marked improvement” over recent years in the industry’s approach to tackling its lack of diversity more widely. One such example has been client Tideway providing appropriate PPE for Muslim women to observe the hijab and burka on construction sites.

Does construction have an ethnicity pay gap?

As we’ve seen, only one out of the UK’s top 20 contractors currently monitors its ethnicity pay gap. The question is: why?

One commonly cited issue is the choice staff have over whether they disclose their ethnicity in company documentation or not, as a Vinci spokesman points out.

“Right now, ethnicity data is recorded on a voluntary basis and a small proportion of our people prefer not to divulge their ethnic background,” he says. “We are looking at ways to encourage our employees to help us be more transparent about their background, which will help us form plans to look at any gap that may exist.”

Other contractors in the top 20 say they are focusing on putting in place changes on the back of disclosing their gender pay gaps.

According to one director at a top-20 contractor, speaking to CN anonymously, the resources needed to record the gender pay gap have been substantial, bumping the ethnicity disparity down the list of priorities.

Because of this, he predicts the industry’s ethnicity pay gap could be much greater than that for gender, which averages 30.2 per cent among the 10 biggest contractors by turnover.

“The ethnicity pay gap could be bigger […] because the industry has focused more on closing the gender pay gap,” the director says. “We’ve also worked more on trying to make construction more attractive to [female workers].”

National Centre for Diversity chief executive Solat Chaudhry agrees. His organisation works with major contractors such as Bouygues, Interserve and Kier, helping them to increase diversity.

Mr Chaudhry insists there is “absolutely” an ethnicity pay gap in the industry. “In fact, I predict it could actually be starker than the gender pay gap,” he says. “The major reason is that, as yet, ethnic minorities haven’t risen to the top of organisations. They are still employed at the lower reaches, where the pay is lower – which is still the case across most industries.”

Ethnicity pay gap reporting

Although ethnicity pay gap reporting has not yet been made mandatory, what is the law around the issue? Taylor Wessing’s Natalie Pilagos and Michael Chattle explain.

The ethnicity pay gap consultation closes in January 2019. Any new legislation isn’t likely to come into force until late 2019/20.

If it does become a requirement, it is likely that it’ll be similar to the current gender pay reporting requirements, which only apply to companies with 250 or more employees.

However, under the Equality Act 2010, race is one of nine protected characteristics. Under the act, it is unlawful for an employer to:

  • Discriminate directly – ie treating a job applicant or employee less favourably than others because of race
  • Discriminate indirectly – ie by applying a provision that disadvantages job applicants or employees of a particular racial group without justification
  • Subject a job applicant or employee to harassment related to race
  • Victimise a job applicant or employee because they have made or intend to make a race discrimination under the act, or because they have done or intend to do other things in connection with the act

It would certainly appear to make sense to have measures that address race disparity, following on from the focus on gender pay gap.

Trouble to the top

Six years ago, architect Danna Walker set up a diversity mentoring initiative – the Fluid Diversity Network Programme – having heard the stories of people from diverse backgrounds who were all struggling to advance their careers in construction.

Fluid Diversity Network Programme links construction employees from a variety of different backgrounds (including BAME) to mentors within the industry. Ms Walker says those applying to the 12-month mentoring programme were raising similar issues around why they were struggling to get to the next level in their careers.

“Many people have said that, while they may have completed projects or training, it hasn’t been made clear to them what is needed to get to that next step,” she says. “And there is, and historically has been, a lack of black and ethnic minorities in senior positions. People therefore think, ‘How can I succeed if there is no one like me at the top?’”

Priya Shah, founder of the BAME in Property forum, says the lack of diversity can also act as a barrier to entry. “I found that there was only one type of person at all the networking events I went to,” she says. “The panels weren’t very diverse, and there were generally a lot of white men there.”

She therefore found it difficult to network and make new connections. “I didn’t have the confidence to go up to people. They will all just gravitate towards each other. It was difficult to break into those circles.”

Close the gap

Given experiences such as these and the question marks over corporate data, how should the industry respond?

Mr Abisogun admits there is no silver bullet. What is “frustrating”, he says, is that companies are not being proactive in addressing barriers BAME workers face.

“Companies need to be bold and accept that they need to reflect the diversity of the population within their own workforce,” he says. “They need to start engaging with the BAME population and get them into the industry […] and keep them once they’re in.”

To retain this talent, Mr Abisogun suggests companies simply need to treat them fairly, offer them equal opportunities, and focus on properly supporting them as they try to progress. “There need to be visible role models, visibility of opportunity, and opportunities to network,” he says. “If companies identify they lack diversity, they need to be honest, remove these blockages and take a leap of faith.”

The NFB’s Mr Bogle adds that tackling unconscious bias in the recruitment process will be crucial to increasing BAME representation. “Diversity is about recruiting a workforce that is more reflective of the society we live in,” he says. “But there is a temptation to recruit in your own image […] this has been to the detriment of BAME workers. We need to think more consciously about how we recruit and remove whatever could trigger unconscious bias in this process.”

Has Mr Bogle had to apply his dad’s advice in his career in construction – to try twice as hard because he is black? He says he has kept up this work ethic ever since he was at school. “What I tend to do now when I find myself in a situation, I ask myself, ‘What do I want out of this situation?’ and then just go for it,” he says.

“I ignore any signs of bias, prejudgement or anything like that. I just have to focus on getting the job done.”

Discrimination in construction

CN has spoken to a number of BAME workers about their experiences of discrimination and the subsequent impact on their careers.

One British Indian woman, who works for a tier two contractor and wishes to remain anonymous, says that being a woman of colour has its challenges, especially when she first started as a trade apprentice.

On various occasions when she went on house visits, she would hear openly racist comments made about her. “I would hear people say to the guy I worked with [who was white], ‘You can come in, but she can’t’.”

Now she works at a different company, predominantly on site, but still hears inappropriate comments. “You get a lot of people asking why I would want to work on site, saying that it’s not the sort of thing ‘my people’ tend to do,” she says. “You also get those feelings when you’re on site when people look at you and think, ‘Nah, I’m not having any of this’.”

While she doesn’t feel alienated herself – “I hear crap, but I just get on with it” – she says experiences such as these may isolate other BAME workers, which may lead to them dropping out of the industry.

To tackle this, she suggests that racism should be treated in the same way as a health and safety breach. “If someone makes a racist comment, it should be treated as a red card, one-strike policy,” she says, adding that this would help demonstrate to all employees that racism is not tolerated.

Readers' comments (1)

  • Whilst advances are still being made, there is still a distinct lack of any mention or consideration regarding those in the industry who have disabilities. Are we still going to be forgotten as always, and disregarded?

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