Gender pay gap reporting

Gender pay gap and equal pay opportunities continue to be a high focus area for our board and leadership team. As we get ready to release the second official report on gender pay gap I want 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 i.e. men and women doing the same job at NPS get the same pay. Over the course of the past year the business has undertaken some restructuring which has impacted this year’s results and whilst the mean gap has increased by just 1%, we have reduced the median pay gap by 6% and made great improvements and in some cases reversed the gap in relation to the quartiles. These short term actions are encouraging in terms of potential longer term impact and set us on our way in terms of the longer journey and bigger picture.

Background – What is a gender pay gap?

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 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 2018 and will publish the information within the set publishing deadline of 4th April 2019. We will continue 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.

Our results:

Overall Gender Pay Gap:

  • The difference in the mean pay of full-pay men and women is 27%.
  • The difference in the median pay of full-pay men and women is 30% (2017 was 36%) so has reduced by 6%. 

In terms of demographics within NPS the average age of an employee is 44 years  and the average length of service of 10 years.The average age is reflective of the aging work population across UK.    

We didn’t pay out our normal bonuses in 2017, so were unable to provide this data last year. This year we did make discretionary ‘Thank You’ payments to all employees and this is reflected in the bonus reportable figures for the snapshot median gap of 0%. Due to a very small number of other payments and commissions, the reportable mean gap was 25% reflecting the higher proportion of males in receipt of one of these payments.

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, for comparison last year’s results are shown in brackets:- 

Quartile 1 – 2018: the proportion of males is 79% and females 21%. Mean gap is 1% and the median gap is -1%. (2017: 78% males and 22% females, mean gap was 2% and median gap was 1%) 

Quartile 2 – 2018: the proportion of males is 72% and females 28%. Mean gap is -1% and median gap is -1%. (2017: 70% male and 30% female, mean gap was 1% and median gap was 2%)

Quartile 3 – 2018:- the proportion of males is 56% and females 44%. Mean gap is 0% and median gap is 0%. (2017:  52% male and 48% female. Mean gap was 4% and Median gap was 3%).

Quartile 4 – 2018:- the proportion of males is 37% and females 63%. Mean gap is -3% and median gap is 3%.  (2017: 38% male and 62% female. Mean gap was 0.5% and median gap was 4%).

The mean gender pay gap in the UK technical sector industries is currently 25%, higher than the UK average of 18.1 % which in part reflects the current UK  gender imbalance in participation in science, technology, engineering and mathematics (STEM) subjects throughout education. There is a need nationally to encourage a higher proportion of females to continue with and gain STEM subject qualifications.   

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. 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.

Actions we have taken to address gender pay gap during the reporting period

As part of the 2017/18 pay review we continued to actively review the pay of men and women to ensure that there are no differences of pay in terms of equal work and we expect that this will show a positive effect on next year’s snapshot. 

We have seen an increase in requests from existing employees in relation to flexible working arrangements and have considered all such requests in the business context to ensure both employee and customer needs are met.

In last year’s commentary we referenced our plans to begin to look at a career framework that would help us better define roles and skills within the organisation and we have progressed this as outlined below.

Our current and future action plans

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. Our most recent and future action plans include:-

During 2018/19 we have worked with external consultants to create an NPS career framework which includes reviewing the definition of the roles within each quartile ensuing that they are gender neutral and we are looking at developing career paths that are flexible and family friendly. The work so far has helped to identify potential recruitment gaps and offers 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 – we will continue with that work into 2019/20. This work will also enable more accurate reporting and assist in maintaining an internal and external balance in relation to gender pay equality.      

We have sought to promote our flexible working and family friendly policies during the recruitment phase to attract applicants. To promote this, we have included a statement in all on line recruitment and role job descriptions, that we encourage flexible working applicants and that we are open to discussion in relation to flexibility in terms of working hours and work location.

  • We are undertaking further analysis of recruitment statistics to understand the split between gender applications for roles aiming to improve the gender split at each stage of the recruitment cycle and to understand outcomes of the recruitment process and monitor the gender of applicants and successful hires into posts.
  • We are giving consideration to the increase use of apprentice and graduate roles within the business and attracting new talent to NPS to help address the aging workforce and creating a gender balance in cohorts joining the business in the future. We are committed to gender diversity and whilst we will continue to seek to hire the best person for the role we will focus on attracting more women into the company.

  • We will review further our family friendly policies and ensure that they are clear transparent and market comparable to attract and retain future talent into the business.  

Outside of the differences in gender representation across the organisation there is not one single overriding reason that explains the gender pay gaps within NPS. I am confident that the implementation of career framework and creation of job families will enable us to focus on areas where there are significant gaps in gender representation and to continue to address these over time. The further action plans set out above will enable us to monitor the gender gap and work with recruitment to attract a more balanced gender representation through our family friendly policies and flexible working practices.  I take this matter seriously and I am committed to continue to build a diverse workforce and encourage more women to establish rewarding careers across all areas and levels of our business. 

Yours,

Steve Callaghan – CEO

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