Why is gap between white and non-white staff’s pay widening at UK agencies?

The latest IPA Census – an industry-wide survey that polls over 20,000 agency staffers – found the ethnicity pay gap widened over the past 12 months. The census also pointed to alarming findings concerning UK agencies’ stalling investment in staff development.

In 2023, the ethnicity pay gap stood at 21.6% in favor of white employees. In 2021, that figure stood at 21.2%, and in 2022, it was 21.1%.

Commenting on the findings, Siddiqi says: “There is a stalling of progress this year in terms of the recruitment, progression and remuneration of ethnically diverse talent.”

Non-white employees account for 23.3% of the industry in the UK, according to the census, but make up 35.5% of junior and entry-level positions. Given that the Census showed that the latter number has increased by 2.3% over the last year, Siddiqi suggested that directing investment in learning and development programs might help close the gap.

But the census also found the number of first-year trainees and apprentices at agencies declining year-on-year: 45.5% and 1.8%, respectively.

“Extra attention and fair opportunities need to be given here, with possible interventions including insisting on diverse shortlists when working with recruitment agencies or using the Apprenticeship Levy for upskilling,” says Siddiqi. “By shining a light on areas that need our attention, we can make speedier progress. The richer and more diverse the composition of our industry, the more relevant and interesting we will be for our clients, audiences and modern-day British society.”

Amina Folarin, UK group chief executive of London-based agency Oliver, tells The Drum that agencies need to hire more non-white leaders to make serious progress.

Oliver is an outlier relative to the rest of the industry, with an overall pay gap in favor of non-white employees of 8%. “We are now several years into our journey of championing DEI. Internally, our data highlights a positive deviation from industry norms where, in a lot of cases, momentum seems to have dwindled,” says Folarin.

“It is important to note that the positive skew in our median ethnicity pay gap is down to the inclusion of my role and ethnicity as a Black female CEO. As such, we can’t ignore that there will be disparities throughout the organization, which will be addressed through our equitable pay review process.”

26% of the agency’s leadership roles were held by staff representing Black, Asian or minority ethnic backgrounds, she notes.

“While taking pride in our progress, we humbly acknowledge the ongoing need for industry-wide efforts. And it is an industry-wide effort. We need to address all the biases our industry holds across every level of seniority, from the onset of careers, helping to reduce future pay gaps, all the way up to the boardroom. Our commitment at Oliver persists in identifying and rectifying disparities, ensuring an authentically inclusive workplace for all.”

Sandra Arnold, regional head of learning & effectiveness, at media agency GroupM UK & EMEA’s business was dismayed to see the number of apprenticeships fall. She says such schemes are vital to making the industry a more diverse, representative place.

”It’s a shame to see that overall apprenticeship numbers are dropping, given the vital role they play in ensuring the advertising world is representative of modern Britain,” she tells The Drum. ”Over the last few years, we’ve welcomed a range of apprentices, our most recent cohort from our Embark scheme is designed to provide school leavers, graduates and career changers an opportunity to join our industry – regardless of education level.”

”We’ve also launched a data acceleration program supporting high potential talent, resulting in a data technician level 3 qualification, as well as opportunities for employees to upskill through a range of apprenticeship opportunities such as AI and machine learning. We are proud to have also supported some of our apprentices into degree-level status and look forward to continuing to support these people as they progress through GroupM.”

In contrast to the ethnicity statistics, the IPA’s survey provided evidence that the gender pay gap was closing. In 2021, the gap stood at 23.3%, but in 2023, it fell to 15.2% – although that is still almost double the UK-wide gender pay gap of 7.7% estimated by the Office for National Statistics last April.