How To Reduce A Gender Pay Gap

Transcription

1 Gender Pay and Equal Pay Audit 2016 Summary Versin

2 Abut this dcument The fllwing summary is an abridged versin f ur gender pay and equal pay audit fr It includes brad analysis f hw pay rates are distributed by gender acrss Ofcm, cmparisn f the pay f male and female clleagues in equivalent rles, cmmentary n any issues arising and the steps we are taking t address 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. 2 The full versin f the reprt has been reviewed by Ofcm s Plicy and Management Bard. Abut this dcument

3 Gender Pay and Equal Pay Audit 2016 Cntents Sectin Page 1 Intrductin 1 2 Methdlgy and Data Cllectin 4 3 Clleague Prfile 6 4 Gender Pay Audit 7 5 Equal Pay Audit 13 6 Next steps 15

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 regularly mnitr the impact f ur pay practices and have made this a key cmmitment in ur 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 belw 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 des the audit cver? The reprt cntains the fllwing: A Gender Pay Audit This is a brad analysis f hw pay rates are distributed by gender acrss Ofcm. The gender pay gap is defined as the difference between the average male and female pay rates. This analysis des nt lk at whether there are differences in pay fr men and wmen in equivalent psts and s the results will be affected by differences in the gender cmpsitin acrss ur varius prfessinal grups and jb levels. Gender pay reprting des nt take int cnsideratin the difference in size f rles either. Reprting the ttal gender pay gap f an rganisatin reveals the difference in the level f rles perfrmed by men and wmen. A gender pay gap may be indicative f talent management and diversity issues, reflecting higher prprtins f female emplyees in less senir rles and/r emplyed in rles which are valued lwer in the market. It may als be indicative f equal pay issues. Frm 2017 private and vluntary sectr emplyers with 250 r mre emplyees will be required by law t publish infrmatin n their gender pay gap. The specific infrmatin required is t be described in a set f regulatins, which are due t be published in Octber

5 Gender Pay and Equal Pay Audit Althugh the regulatins will nt at first apply t public bdies, such as Ofcm, the Gvernment has stated that it will prduce separate legislatin t cver the public sectr in the near future. We have reprted n ur gender pay gap in previus audits but have decided t include additinal infrmatin in this year s audit in anticipatin f future requirements. An Equal Pay Audit This is a specific cmparisn f the pay f male and female clleagues in equivalent rles. An equal pay audit invlves: Cmparing the pay f men and wmen ding the same r similar rles; Identifying any equal pay gaps; Explaining and justifying any gaps using bjective criteria; Addressing any gaps that cannt satisfactrily be explained n the grunds f wrk cntent; and Onging mnitring. Any pay gaps identified may be indicative f reward management issues. Equal pay audits enable rganisatins t identify where gaps in pay fr men and wmen are and t analyse the underlying reasns fr these gaps such as links between perfrmance and pay/bnus, male and female career prgressin and differences in pay fr male and female new starters which impact n the gender pay gap. We carried ut ur first equal pay audit in 2004, and have cnducted subsequent audits in 2007, 2012 and 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. Similarly, ur equal pay audits in 2012 and 2014 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. 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 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).

6 Nn-cnslidated perfrmance bnus pprtunity fr clleagues wh verperfrm against their bjectives. Nn-pensinable Chices allwance 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. Ten percent f Ofcm clleagues were wrking part time hurs at the time f the review with 86% f part time clleagues being female. 1.4 What we have dne as a result f previus Equal Pay Audits? Althugh gender did nt appear t be a significant factr behind the differences in levels f pay fr clleagues ding similar rles, we identified a number f actins we culd take fr reducing thse pay gaps that did exist. Fllwing the 2014 and 2012 audits, we: 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: In 2012: 32 clleagues (15 female and 17 male) were given an increase In 2014: 16 clleagues (7 female and 9 male) were given an increase Used the findings frm the equal pay audit t infrm pay decisins during ur annual pay review prcess, which takes place during May and June each year with resulting pay increases taking effect frm 1 July. Develped 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. Cntinued with ur strategy fr restraining the pay f thse clleagues whse salaries were high bth in cmparisn with their peers and the external market.

7 Gender Pay and Equal Pay Audit 2016 Sectin 2 Methdlgy and Data Cllectin 2.1 The Data The reprt is based n salary data taken n 15 February The number f emplyees n this date was 817, f which 727 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. 2.2 Prcess fr the Review Gender Pay Audit We have set ut ur analysis in the frmat that we understand will be required by the new regulatins, althugh the requirements may change slightly as a cnsequence f the Gvernment s cnsultatin which has nly recently clsed. Equal Pay Audit We used the equal pay audit mdel recmmended by the Equality & Human Rights Cmmissin (EHRC) t help cnstruct the prcess fr the review. 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 are free frm discriminatin; 5) If there appeared t be discriminatin, develping an equal pay actin plan r if the results shw that pay was free frm discriminatin ensuring nging review and mnitring. 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 Willis 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.

8 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 indicate 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.

9 Gender Pay and Equal Pay Audit 2016 Sectin 3 Clleague Prfile The number f clleagues emplyed by Ofcm n the date we cnducted ur analysis was 817. 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 79% 21% Assciate 39% 61% Senir Assciate 41% 59% Principal 33% 67% SMS 29% 71% TOTAL 41% 59% Number f clleagues at each level, split by gender SMS Principal Senir Assciate Male Female Asscate Administratr Our 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.

10 Sectin 4 Gender Pay Audit 4.1 Average Salary by Gender and Jb Level Median average acrss all jb levels 60,000 50,000 40,000 30,000 20,000 Female Male Overall 10,000 0 Female Male Overall Female Male Overall 45,000 50,505 49,000 Mean average acrss all jb levels 60,000 50,000 40,000 30,000 20,000 Female Male Overall 10,000 0 Female Male Overall Female Male Overall 52,650 60,003 57,024

11 Gender Pay and Equal Pay Audit 2016 Median average by jb level 160, , , ,000 80,000 60,000 40,000 Female Average Salary ( ) Male Average Salary ( ) 20,000 0 Jb Level Female Male Overall Pay Gap Administratr 31,571 17,450 30, % Assciate 33,200 33,700 33, % Senir Assciate 52,986 52,129 52, % Principal 81,500 83,000 82, % SMS 115, , , % Overall 45,000 50,505 49, % The fact that there are relatively mre wmen than men in junir rles is an imprtant factr in this gender disparity. It is wrth nting t that the median pay gap at SMS and administratr levels is much wider than the mean pay gap at these levels (see table belw). This is due t the fllwing: Over half f male Administratrs are in very junir rles and this has affected the median salary fr this grup. The pattern f female Administratr salaries is very different. The cmparative figures are als slightly skewed by the fact that there are far mre female (38) than male (10) clleagues at this level. The cnverse is true at SMS level ver half f males are in rles which are either very senir r attract a high rate in the market. The female SMS ppulatin cntains a relatively high prprtin f clleagues wh have recently been prmted.

12 Mean average by jb level 160, , , ,000 80,000 60,000 40,000 Female Average Salary ( ) Male Average Salary ( ) 20,000 0 Jb Level Female Male Overall Pay Gap Administratr 31,456 20,338 29, % Assciate 33,119 34,315 33, % Senir Assciate 53,365 53,737 53, % Principal 79,945 83,667 82, % SMS 136, , , % Overall 52,650 60,003 57, % We have chsen t include ur pay gap based n a mean average fr the fllwing reasns: We have previusly calculated ur pay gap using the mean and s including it in this reprt enables us t assess whether ur pay gap has clsed ver time (see 4.2); The mean takes int accunt all utliers, i.e. any particularly high r particularly lw salaries.

13 Gender Pay and Equal Pay Audit Our Prgress in clsing the Gender Pay Gap We have used data based n the mean average s that we have a like-fr-like cmparisn with ur previus audits. The clser the line is t 0% the lwer the pay gap. As the chart shws, ur verall gender pay gap has reduced substantially since 2012 frm 22% in favur f men t 13.97% in favur f men in The pay gap at SMS level has als drpped cnsistently frm 10% t 2.87% in favur f men. Hwever, the pay gap at Administratr level has increased dramatically in favur f wmen as a result f clleague turnver at this level.

14 4.3 Salary Quartiles by Gender The new gender pay regulatins will require emplyers t reprt the number f men and wmen in each quartile f their pay distributin. It is fr emplyers t determine the salary ranges within their quartiles. Given that ur pay framewrk cmprises fur verlapping pay bands as well as individual salaries fr senir clleagues, we have devised ur wn quartiles as fllws: Band D 100,000 and abve Band C 65,000-99,999 Band B 30,000-64,999 Band A 11,000-29,999 Clleagues are spread acrss the bands as fllws: Female Male Highest pay D 18 (5%) 48 (10%) C 64 (19%) 113 (23%) B 211 (64%) 295 (61%) Lwest pay A 38 (12%) 30 (6%) Ttal 331 (100%) 486 (100%) Whilst the prprtin f male and female clleagues in the middle tw bands is bradly similar, there is a higher prprtin f male clleagues in the tp pay band and a higher prprtin f female clleagues in the bttm pay band. This pattern reflects the distributin by gender acrss the jb levels.

15 Gender Pay and Equal Pay Audit 2016 Sectin 5 Equal Pay Audit Key Pints Overall, ur analysis shws that since ur last equal pay audit in 2014 we have made prgress in reducing pay gaps and there is clear evidence that we have been actively managing pay acrss the rganisatin with a view t ensuring fairness, equity and alignment with the market. We have increased the number f grups in which there is n clear difference between average male and female salaries. There are nw 35 such grups, an increase frm 26 in 2014 and 14 in As in ur previus tw audits, the data indicates that neither gender is cnsistently paid mre than the ther gender. Whilst there are sme differences in levels f pay amngst clleagues ding similar rles, there is n evidence f gender bias. The majrity f pay differences can be explained. Reasns include the fllwing: Differences in levels f capability, skills, prfessinal qualificatin, experience and perfrmance amngst clleagues within cmparatr grups. Fr example, in sme cases we were able t identify that the higher earners in a team were als the clleagues wh had received the highest perfrmance ratings ver the last few years. These differences can be justified as they are in line with ur apprach t pay. Prmtins: as was the case with the 2014 audit, the data shws that clleagues wh have been prmted within the last cuple f years tend t be paid less well than their clleagues in equivalent rles. Our fcus since the last audit has been n ensuring that, where apprpriate, we have an individual pay prgressin plan in place fr thse clleagues. There is evidence that this apprach has been helping t reduce ur pay gaps but there is further wrk t d. Legacy effects: in sme instances the data shws that clleagues wh jined Ofcm frm ne f its legacy regulatrs are paid relatively less well than clleagues wh jined Ofcm mre recently. In ther instances, hwever, the reverse is true. Skills shrtages and specific difficulties in recruiting t sme disciplines. The effect in sme f ur smaller cmparatr grups f just ne salary anmaly (either relatively high r lw) can skew the data. Hwever, there are areas which require attentin. There cntinue t be sme pay gaps amngst clleagues ding similar rles. Whilst we have clsed many f ur previus pay gaps, we have acquired new pay gaps where there were nne previusly. This has largely been the result f changes in the cmpsitin f grups caused by natural turnver, prmtins, internal mves and rganisatin change. Whilst we can explain and justify the reasns fr many f the pay gaps, we need t ensure that we cntinue t mnitr them and that we have plans in place t ensure that we d nt acquire indirect equal pay issues in the future. We will need t pay attentin t these issues alngside the key pints we identified in ur gender pay audit, which were:

16 The general distributin f male and female clleagues acrss Ofcm affects ur gender pay gap. 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, Cmpetitin, and Infrmatin Technlgy, 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. This prfile has essentially nt changed since Ofcm was frmed and is why we have intrduced targets fr increasing the number f female clleagues acrss the bard and in senir rles 1. Althugh we have reduced the mean pay gap at SMS level (2.87% in favur f men), the median pay gap is still large (17.75% in favur f men). The median figure highlights the disparities in salaries acrss ur mst senir clleagues and can in part be explained by differences in the nature f rles, market rate and experience (the female SMS ppulatin cntains a relatively high prprtin f clleagues wh have recently been prmted). We will need t ensure that, where apprpriate, there are pay prgressin plans fr sme specific SMS clleagues t prevent indirect gender pay issues ccurring in the future. 1 Our target is t have a 50/50 male/female balance acrss the rganisatin as a whle and a 60/40 male/female balance in senir management by 2010.

17 Gender Pay and Equal Pay Audit 2016 Sectin 6 Next Steps We used the audit t infrm decisins during this year s annual pay review and have put in place a number f initiatives t reduce r clse the pay gaps we identified. Our actin plan includes the fllwing cmmitments: Cntinuing with ur strategy during recruitment f prducing a transparent guideline rate fr the jb. Develping individual plans fr managing the pay prgressin f: Clleagues whse salaries are lw in cmparisn t their peers and are belw the market rate fr the jb; Clleagues wh have recently been prmted; Restraining (r red-circling) the pay f thse clleagues whse salaries are high bth in cmparisn with their peers and the external market. As part f ur wider diversity strategy we have set urselves the fllwing aspiratinal gals: These targets are designed t push Ofcm t becme mre imaginative in hw we g abut attracting, recruiting, develping and encuraging ur mst talented clleagues t stay with us. We have als prvided uncnscius bias training t all Ofcm managers. This shuld help t mitigate ptential bias in decisins ur managers make which affect clleagues and resurcing (including decisins n pay). We will cntinue t mnitr pay and ensure that we meet the cmmitments that we have made in ur Single Equality Scheme. We will als carry ut an audit f pay acrss the different ethnic grups at Ofcm.