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Penguin’s First Ever Ethnicity Pay Gap Report: The Breakdown

Introduction


As the biggest publishing house worldwide, Penguin Random House employs over 2,000 people in the UK, and with diversity at the forefront of everyone’s minds this year, we were intrigued to read Penguin’s first Ethnicity Pay Gap Report. In its open letter to the industry the Black Writers’ Guild demanded data on Black employees and this is the industry’s first step in improving transparency and racial diversity within its ranks. Here we’re going to break down the data for you, but if you would like to read the full report, you can do so here.


The Ethnicity Pay Gap Explained


As the report explained,


“The ethnicity pay gap is the percentage difference in hourly pay and bonus pay between all Black, Asian and minority ethnic colleagues working in our organisation when compared with white colleagues, calculated in terms of the mean and median.”


Penguin used the same methodology set out by the Government Equalities Office for gender pay gap reporting as there is no official guidance in place at the moment when calculating ethnicity pay gaps.


In order to calculate an overall ethnicity pay gap, Penguin grouped together all colleagues that identify as Black, Asian and minority ethnic and made a comparison with the colleagues that identify as white. This poses a number of challenges as well as the fact that the data used in this report is only based on the 56.9% of employees who voluntarily disclosed their ethnicity. This not only limits the accuracy of the report but poses problems in the future: if more employees were to voluntarily disclose their information this could skew the data significantly. This, however, is arguably necessary to provide a more holistic reflection of the ethnicity pay gap within their organisation.


The bonus pay gap which is discussed is “based on total variable pay over the previous 12 months, representing cash bonus paid,” plus any extra proceeds.


The ethnicity pay gap is “based on an hourly pay rate for each relevant employee, reflecting base salary and certain allowances.” The ethnicity pay gap is calculated in terms of the mean and the median as shown in the image below:


Our Ethnicity Pay Gap Data


The hourly pay gap is shown in the image below:


The bonus pay gap is shown in the image below:



From the total number of employees that have disclosed their ethnicity, 86.7% are white and 13.3% are Black, Asian, or minority ethnic individuals. The diagram below shows the distribution of Black, Asian, or minority ethnic employees in different job levels.



The pay gap exists because most Black, Asian, or minority ethnic employees are in entry level or early career roles. This causes the medium and mean of the hourly pay of white employees to be higher than Black, Asian, or minority ethnic employees. Likewise, for the bonus pay gap, there are more white employees in higher positions who would receive more bonus pay because of their higher salaries. It is important to note that Penguin has no Black, Asian, or minority ethnic individuals in leadership positions. Penguin wants to address this lack of representation through recruitment, progression and retention of Black, Asian, or minority ethnic individuals.


The report has also published the hourly and bonus pay gap between different ethnicities.




The large percentage pay gap difference between Asian/Asian British and Black/Black British is because Asian/Asian British employees hold more middle to senior positions in the company, while the majority of Black/Black British employees hold entry level to mid-level roles. In acknowledging their need to improve representation in senior positions, Penguin aims to prioritise their Black employees in their inclusivity action plan.


Addressing Our Ethnicity Pay Gap


As is continuously stated throughout the report, the main contributor to the staggering ethnicity pay gap is the lack of Black, Asian, or minority ethnic employees in senior leadership and upper quartile roles. While remedying this absence remains their key priority, Penguin is also aiming to recruit a workforce that is reflective of the different ethnicities in UK society by 2023. One example of how this will be achieved is through a new senior editorial positive action traineeship that will open to Black, Asian, or minority ethnic people at Commissioning Editor level in 2021. Furthermore, all interview shortlists will include at least one under-represented candidate. While every department has developed their own Inclusivity Action Plan, an especially commendable move is that from the new year every colleague will have an annual personal objective related to inclusivity. It is important to keep in mind that the results of the report are based on the responses of 57% of Penguin’s Black, Asian, or minority ethnic employees and that, consequently, the actual ethnicity pay gap may be even bigger. When the next report comes around, we can only hope that these measures will have both increased Black, Asian, or minority ethnic pay transparency and reduced racism to produce more accurate, and equitable, results.



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