Equal Pay Audit 2014 Summary

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1 Equal Pay Audit 2014 Summary

2 Abut the dcument The fllwing summary is an abridged versin f Ofcm s equal pay audit In the full versin f the reprt we set ut ur key findings, cmment n any issues arising and set ut hw we are addressing any pay inequalities. This summary excludes the detailed data n ur key findings due t the need t ensure that individual clleagues are nt identifiable. The full versin f the reprt has been reviewed by Ofcm s Executive Cmmittee and Remuneratin Cmmittee. 1

3 Equal Pay Audit Cntents Sectin Page 1 Intrductin 3 2 Methdlgy and Data Cllectin 5 3 Key Findings & Recmmendatins 7 4. Fllw up activity 10 Annex 1 Clleague Prfile 11 2

4 Sectin 1 1 Intrductin 1.1 Our cmmitment t diversity and equality At Ofcm, diversity and equality are central t ur values and t the way in which we perate. As a regulatr, we have a duty t further the interests f citizens and cnsumers. T d this effectively, we need peple frm diverse backgrunds t help ensure we make sund decisins that are representative f the different perspectives within sciety. It is essential, therefre, that we take steps t ensure we are a gd emplyer that values and welcmes the different ideas, skills and behaviurs f ur clleagues. Our diversity and equality plicy is t treat all clleagues with dignity and respect in an inclusive and fair wrking envirnment, prmting equality f pprtunity fr all. We supprt the principle f equal pay fr wrk f equal value and are cmmitted t prviding an equitable pay structure, which rewards clleagues fairly. As part f that cmmitment, we carry ut regular mnitring f the impact f ur pay practices and have made this a key cmmitment in ur Single Equality Scheme. We are als mindful f ur respnsibilities under the Equality Act 2010, which gives wmen (and men) a right t equal pay fr equal wrk. The equal wrk prvisins apply t all emplyers, althugh thse in the public sectr (including Ofcm) are subject t the gender equality duty. This specifically requires us t carry ut an equal pay audit. In the reprt we set ut ur key findings, cmment n any issues arising and set ut hw we intend t address any pay inequalities. 1.2 What is an equal pay audit? An equal pay audit invlves: Cmparing the pay f men and wmen ding equal wrk; Identifying any equal pay gaps; Explaining any gaps using bjective criteria; Addressing any gaps that cannt satisfactrily be explained n the grunds f wrk cntent; and Onging mnitring. We carried ut ur first equal pay audit in 2004, ur secnd in 2007 and ur third in The findings f the 2004 and 2007 reviews shwed that whilst there were sme differences in pay levels amngst clleagues ding the same type f wrk there was n significant disparity in the pay f men and wmen wrking at cmparable levels within Ofcm. The differences were largely as a result f differences in pay levels at the five legacy regulatrs which merged in 2003 t frm Ofcm. We used the data frm these reprts t help us t address these internal relativities. 3

5 Equal Pay Audit Similarly, ur equal pay audit in 2012 indicated that there were sme differences in levels f pay amngst clleagues ding similar rles but there did nt appear t be a clear gender bias. When we examined the salary data in detail we were, in many instances, able t determine what lay behind the differences in pay levels. Fllwing the 2012 audit, we: made a small number f salary adjustments (32 clleagues: 15 female clleagues and 17 male clleagues) develped a lnger term pay prgressin plan fr a small number f clleagues 1.3 Ofcm s remuneratin plicy Ofcm has a ttal reward apprach which includes the fllwing: Salary Base salary linked t the market - defined as the ging rates earned by peple ding cmparable jbs utside Ofcm. Brad salary bands t reflect a flat structure. These have been cnstructed arund the market median rate. Salary prgressin based n clleagues perfrmance, external market relativities, internal relativities (i.e. a clleague s salary relative t thers in the same r a similar rle) and ptential (clleagues wh haven t yet achieved their full ptential but shw great prmise and flair in making a significant cntributin t Ofcm). Nn-cnslidated perfrmance bnus pprtunity fr clleagues wh verperfrm against their bjectives. Benefits Flexible benefits s that individuals can chse the benefits they mst value A defined cntributin pensin In additin, Ofcm has a variety f flexible wrking practices, including hme-wrking and part-time wrking. Nine percent f Ofcm clleagues were wrking part time hurs at the time f the review with 90.5% f part time clleagues being female. 4

6 Sectin 2 2 Methdlgy and Data Cllectin 2.1 Prcess fr the Review We used the equal pay audit mdel recmmended by the Equality & Human Rights Cmmissin (EHRC). The key steps were: 1) Deciding the scpe f the audit and identifying the data required; 2) Identifying where men and wmen (and prtected grups) were ding equal wrk: like wrk / wrk rated as equivalent equal value; 3) Cllecting and cmparing pay data t identify any significant equal pay gaps; 4) Establishing the causes f pay gaps and deciding whether they were free frm discriminatin; 5) If there appeared t be discriminatin, develping an equal pay actin plan r if the results shwed that pay was free frm discriminatin then ensuring nging review and mnitring. 2.2 The Data The reprt was based n salary data taken n 24 February The ttal ppulatin invlved in the review was 812, f which 720 were based in Lndn. Sme clleagues were excluded frm the analysis n accunt f there nt being an apprpriate internal cmparatr fr their rle. Salaries fr part-time clleagues were factred up t the full time equivalent salary. Our pay bands and jb families are very brad and s t help us t determine what cnstituted wrk f equal value we gruped jbs int prfessinal categries and levels f senirity using Twers Watsn s pay benchmarking methdlgy. This system srts jbs int: Functins such as administrative services r crprate affairs/cmmunicatins Disciplines these are sub-sectins f the functins. Fr example, the administrative services functins cntains disciplines such as receptinist/switchbard and secretarial; and the crprate affairs/cmmunicatins functin includes public relatins and internal cmmunicatins. 5

7 Equal Pay Audit Levels these are referred t as glbal grades and prvide a mre granular descriptin f the size and scpe f a jb than ur brad jb levels. Prir t undertaking the equal pay audit we wrked with senir managers frm acrss Ofcm t ensure that all jbs were apprpriately cded. The reprts shw the average pay f male and female clleagues at each level and fr each prfessinal categry and indicates the percentage value f any pay gaps. The gap is shwn as a -% if females are paid less than males and a +% if females are paid mre than males. The EHRC equal pay review kit advises that any gaps f 5% r mre between the average pay f men and wmen at the same grade is significant and shuld be investigated. The threshld fr significance and recmmended further investigatin drps t gaps f 3% r mre where there is a pattern f gaps favuring ne gender. Annex 1 prvides detail abut the prfile f Ofcm clleagues. 6

8 Sectin 3 3 Key Findings & Recmmendatins 3.1 Key Findings The reprt indicated that: neither gender was cnsistently paid mre than the ther gender; there were sme differences in levels f pay amngst clleagues ding similar rles but n clear gender bias; where there were pay differences, these culd ften be explained. It was als clear that we had made prgress since ur last equal pay audit in The gender pay gap by jb level was as fllws: Administratrs Assciates Senir Assciates Principals Senir Managers and Specialists Prgress in clsing the gap Average female Average female salary 6.68% higher salary 7.57% higher than average male than average male salary salary Average male salary 0.5% higher than average female salry Average female salary 1.9% higher than average male salary Average male salary 3.2% higher than average female salary Average male salary 5.05% higher than average female salary. But when CEO remved there is n pay gap at this level. Average male salary 3.4% higher than average female salry Average female salary 0.04% higher than average male salary Average male salary 7.43% higher than average female salary Average male salary 10.06% higher than average female salary. 7

9 Equal Pay Audit As nted in 2.2 abve, ur jb levels and pay bands are very brad and cntain different rles which have their wn market range within the brader band. T get a mre accurate view n whether there was a gender pay gap acrss clleagues ding equivalent wrk, we gruped individuals int prfessinal categries. Our analysis shwed that The average salary fr males was higher than the average salary fr females in 30 categries (this was 33 in 2012) The average salary fr females was higher than that fr males in 16 categries (this was 22 in 2012) There was n clear difference between average male and female salaries in 26 categries (this was 14 in 2012) It shuld be nted that sme f the cmparisn grups were quite small and s, in a number f cases, just ne salary anmaly skewed the data. These results have t be seen in the cntext f the general distributin f male and female clleagues acrss Ofcm. Overall, 59% f all clleagues are male and 41% are female. There is a much higher cncentratin f male clleagues in sme areas, such as Spectrum Plicy Grup, Infrmatin Technlgy and in parts f Operatins, whereas the prprtin f female clleagues is higher in administratin rles and within teams such as Legal and HR. There is als a higher cncentratin f male clleagues in mre senir rles. We examined the salary data in detail and, in many instances, were able t determine what lay behind the differences in pay levels. In a number f instances, the data shwed that clleagues wh had been prmted in the last cuple f years were paid less well than their clleagues in equivalent rles. This applied t bth male and female clleagues. Our fcus is nw n ensuring that, where apprpriate, we have an individual pay prgressin plan in place fr thse clleagues. In sme instances the data shwed that clleagues wh jined Ofcm frm ne f its legacy regulatrs were paid relatively less well than clleagues wh jined Ofcm mre recently. In ther instances, hwever, clleagues wh came frm a legacy regulatr appeared t be n a higher average salary than their peers wh had jined Ofcm directly. Where there are clleagues whse salaries appear t be higher than their peers fr histrical reasns there is n bligatin n us t increase the salaries f thse in cmparable rles. Instead, ur apprach will be t restrain the pay f the individual with the higher salary. 3.2 Recmmendatins Althugh gender did nt appear t be a significant factr behind the differences in levels f pay fr clleagues ding similar rles, there were sme actins identified as a result f this audit. These include: 8

10 Carrying ut a mre detailed investigatin f the reasns fr any pay anmalies which were nt clear frm the data. Develping a plan fr managing the pay prgressin f: clleagues whse salaries were lw in cmparisn t their peers and were belw the market rate fr the jb; and clleagues wh had recently been prmted. Cntinue with ur strategy fr restraining the pay f thse clleagues whse salaries were high bth in cmparisn with their peers and the external market. We will cntinue t mnitr pay and ensure that we meet the cmmitments that we have made in ur Equality Scheme. 9

11 Equal Pay Audit Sectin 4 Fllw up activity The full equal pay audit was cmpleted earlier in 2014 s this sectin is prvided as an update n the steps that have been taken t address the pints raised in the reprt. Since carrying ut the audit we have Further investigated the small number f anmalies that culd nt be explained; and Made a small number f salary adjustments where there was a clear ratinale t d s: 16 clleagues (7 female clleagues and 9 male clleagues) were given an increase In mst cases, an uplift was given because the clleague s salary was lw in relatin t their peers and the external benchmark fr their rle. In sme cases additinal factrs were taken int cnsideratin which included the fact that the clleague was: a high perfrmer a key retentin challenge a technical specialist / a skill set in shrt supply n a salary that was nt reflective f their increased level f respnsibility playing a key rle in the Grup n a much lwer salary than their peers as a result f transferring frm anther Grup Ofcm s annual pay review takes place during May and June with resulting pay increases taking effect frm 1 July each year. We used the findings frm the equal pay audit t infrm pay decisins during ur 2014 pay review prcess. In additin t presenting the equal pay audit t Ofcm s Executive Cmmittee and Remuneratin Cmmittee, a high level verview f the reprt was discussed with: Ofcm s Crprate Respnsibility Steering Grup (CRSG) Prspect (ur recgnised Unin) Ofcm s Mnthly management briefing (a briefing attended by all managers with five r mre direct reprts). 10

12 Annex 1 4 Clleague Prfile Gender distributin The gender split was 59% male, 41% female with higher female representatin at administratr level and higher male representatin at assciate, senir assciate, principal and SMS level, see table belw. Level Female Male Administratr 86% 14% Assciate 41% 59% Senir Assciate 39% 61% Principal 33% 67% SMS 21% 79% Ttal 41% 59% Additinal nte added t Equal Pay Audit Summary: As nted in 2.2 abve, ur jb levels and pay bands are very brad as they cntain a range f different rles which have their wn market range within the brader band. Number f clleagues at each level, split by gender SMS PRINC SR_ASSOC Male Female ASSOC ADMIN

13 Equal Pay Audit Average Salary by Gender, By Level 160, , , ,000 80,000 60,000 40,000 Female Average Salary ( ) 20,000 0 Administratr Assciate Senir Assciate Principal SMS* Male Average Salary ( ) Average Salary by Gender Average Salary By Gender Average Salary By Gender 0 Female Male *Senir manager and specialist 12

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