Gender pay gap and equal pay opportunity are a high focus area for our board and leadership team. As we get ready to release our first ever official report on gender pay gap I wanted to provide the opportunity for you to understand where we are, what the numbers mean, and what we are doing to address the underlying issues we have in this area. Our results are by no means unusual for the UK technology industry and whilst there are improvements to be made, I am pleased to report that regardless of which pay quartile colleagues fall in, the gender disparity on equal pay is negligible.
A gender pay gap is the difference between the average earnings of men and women over a period of time, irrespective of their role or seniority. In other words, it captures pay differences between men and women at a summary level. The difference between gender pay and equal pay are, however, frequently confused. Essentially equal pay is where a person of one gender receives the same pay as a person of the other gender for carrying out the same or a similar job. It is therefore possible for an organisation to comply with equal pay legislation as we do, but to also have a gender pay gap, if for example a majority of women in an organisation are in more junior roles than to men.
It is now a legal requirement for all private and voluntary sector employers with more than 250 employees in England, Scotland and Wales to calculate their gender pay and gender bonus gaps as they are on 5th April every year. To comply with this, we have taken a snapshot date from April 2017 and will publish the information within the set publishing deadline of 5th April 2018. We will publish details of our gender pay gap every year and this information will remain live on the website for three years.
Our vision and commitment to gender equality is to promote a diverse workforce encouraging women into roles at every level within the technical industry. We do not expect to eradicate the gap shown below immediately but to look to understand the gaps and to address them on a longer term basis and within our industry norm.
Overall Gender Pay Gap:
Normally we would also report on bonus payments but as we didn’t pay out any bonuses in 2017, we are unable to provide this data. However, in previous years 74% of employees received a discretionary annual bonus subject to performance targets being achieved – of which 58% were male and 42% were female reflecting the higher proportion of men in management roles at NPS at that time.
In order to understand the gaps in each quartile we have reviewed the proportion of full pay- men and women in each of the four quartile pay bandings with the following results:
Quartile 1 – the proportion of males is 78% and females is 22%
Quartile 2 – the proportion of males is 70% and females is 30%
Quartile 3 – the proportion of males is 52% and females is 48%
Quartile 4 – the proportion of males is 38% and females is 62%
The mean gender pay gap in the UK technical sector industries is currently 25%, higher than the UK average of 18% which in part reflects UK current gender imbalance in participation in science, technology,engineering and mathematics (STEM) subjects throughout education. We are keenly aware that at 26% we have work to do to address the gap in recruitment, development and career progression of women, especially in technical fields but there is also a need nationally to encourage a higher proportion of females to continue with and gain STEM subject qualifications.
In addition to the above reportable data we have gone beyond the legislative requirements and analysed the mean and median pay in each of these quartiles so we could understand the data better as regards equal pay:
Quartile 1 – the mean gap is 2% and the median is 1%
Quartile 2 – the mean gap is 1% and the median is 2%
Quartile 3 – the mean gap is 4% and the median is 3%
Quartile 4 – the mean gap is 0% and the median is 3%
It is clear that the overall organisational gaps are not reflected in the quartile ranges with regard to equal pay, but business needs to balance gender representation across the organisation as a whole. A more balanced male to female representation at all levels in our business is our goal.
Gender pay differences in many organizations are most evident at Executive levels, however in line with the above data we don’t have a significant gap in male and female remuneration packages at that level. This is in part as a result of more recent senior female appointments across the business.
It is important to note that having a gender pay gap does not necessarily mean that women are not getting equal pay for equal work, and this reflects our position. During the 2017 pay review we have continued to actively review the pay of men and women to ensure that there are no differences of pay in terms of equal work.
We aim to be an employer of choice for people of both genders, from a variety of backgrounds and to promote respect for the individual and equal opportunities. We are committed to eliminating discrimination and encouraging diversity. Our aim is for our workforce to be truly representative of all sections of the wider community in which we operate and for each employee to feel respected and able to commit their best. Through the Equality, Diversity and Dignity policy and mandatory annual training for all employees we promote respect for individuals and equality in recruitment and opportunity for career development and promotion. We commit to regularly reviewing our recruitment and selection process to identify and remove barriers to establish a diverse workforce.
We are also committed to gender diversity. As at April 2017 41% of the overall UK workforce is female which compares favourably to the technical sector as a whole. Our senior management consisting of Excom plus two is currently 25% female and over the past 18 months 37% of our senior appointments have been female. Nevertheless whilst our gender balance does require attention, we will continue to seek to hire the best person for the role regardless of gender. We will continue to actively influence the recruitment processes to attract more women into under-represented roles through promotion of our flexible working and family friendly policies. We will also seek to attract, retain and develop young talent into our diverse business areas through apprenticeship and graduate schemes, focusing on bringing women into rewarding careers when we can.
We also plan improve the definition of the roles within each quartile, exploring them in further detail and aim to create pay bandings and career paths based on those roles. This will also help to identify potential recruitment gaps and offer opportunity to re-align roles across the business into broad job families and target recruitment for roles and levels where there is current under representation. This activity will enable more accurate reporting and assist in maintaining an internal and external balance of equity in relation to gender pay equality.
We monitor and analyse the total reward offering and the hourly rate of pay of our employees by role to ensure that there are no pay gaps and to address any inconsistencies.
Outside of the differences in gender representation across the organisation there is not one single overriding reason why the gender pay gap exists at NPS. I am confident that the further review of job families and pay gradings will enable us to focus on areas where there are significant gaps in gender representation and to continue to address these over time. I take this matter seriously and I am committed to building a diverse workforce and encouraging more women to establish rewarding careers across all areas of our business and at all levels.
Steve Callaghan – CEO