The UK Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 requires employers with over 250 staff to publish their gender pay gap both on the organisation’s website and the designated government website.
The information reported is the difference between the average earnings of male and female employees in our organisation on 5th April 2017 (the snapshot date); it does not involve publishing individual employees’ data.
The gender pay gap shows the difference in average pay between women and men, regardless of their role. This is different to equal pay, which requires that women and men who do the same or similar jobs, or work of equal value, are paid equally.
We welcome the introduction of gender pay gap reporting and what this sets out to achieve. We appreciate that we have work to do to close the gap and are committed to developing a deeper understanding of the reasons for our gender pay gap and to creating and implementing an appropriate plan to help us make positive changes.
Note: The gender pay gap shows the difference between the mean (average) and median (mid-point) pay and bonus earnings of male and female employees. This is expressed as a percentage of male employee earnings.
Mean Gender Pay Gap
The mean gender pay gap is the difference in the average hourly rates of pay that male and female employees receive. As at 5th April 2017, the average hourly pay for male employees was £15.06 and the average hourly pay for females was £12.07. This means that the average gender pay gap on the snapshot date in 2017 was 19.9 % – i.e. the average hourly rate of pay for female employees across the company was 19.9 % lower than it was for male employees.
Median Gender Pay Gap
The median gender pay gap shows the difference in the mid-points of the pay ranges for male and female employees. The midpoints are found by ordering all male rates of pay and all female rates of pay from lowest to highest and taking the middle values. As at 5th April 2017, the mid-point (or median) hourly pay for male employees was £11.98 and the midpoint hourly pay for females was £10.97. This means that the mid-point gender pay gap on the snapshot date in 2017 was 8.4% – i.e. the mid-point rate of pay for female employees across the company was 8.4 % lower than it was for male employees.
Bonus Pay Gap
During the year to 5th April 2017, six employees including one director received a bonus. Four men, or 5.3% of the male workforce received a bonus and two women or 1.2% of the female workforce received a bonus. The mean bonus pay gap was 98.5% and the median gap was 82.6%. This means that the average bonus of female employees was 98.5% lower than that of male employees and the mid-point bonus was 82.6% lower.
A bonus scheme for the managing director was established during his 2014 salary restructure where he accepted a significant salary reduction which, in the event of specified targets being reached, would be paid as a bonus. This reduced pay structure covered the period until the Fair Ways Foundation charity was established in July 2015 and Fairways Care (UK) limited became a wholly owned subsidiary of the charity. The managing director accepted that, due to the high level of legal fees which were incurred setting up the charity, he would defer payment of his bonus until a later date. This payment was made during this gender pay gap reporting year and has impacted on the results.
Note: These charts show the proportion of male and female employees who received any amount of bonus during the year to 5th April 2017.
Further Analysis to Understand the Gender Pay Gap
The gender pay gap calculations look across all job levels within an organisation. Fair Ways gender pay gap is largely driven by the fact that the proportion of men in senior higher-paid roles is greater than the proportion of women in those roles, a pattern common to most companies in the UK.
This is evident at the highest level, with only three out of the fourteen most senior positions in the company (at the snapshot date) being occupied by women.
Note: These charts show the proportion of male and female employees in four quartile hourly rate pay bands. Pay rates were ranked highest to lowest and then divided in to four equal parts.
To further understand the pay gap, we have reviewed the mean gender pay gap per quartile band.
The gender pay gap in the upper quartile is significantly higher than the other three quartiles. This is because in this quartile there is a larger spread of average hourly pay rates, with director and head of department roles making up only fourteen out of the fifty-eight roles in this quartile. Of these fourteen roles, only three are occupied by women.
The gender pay gaps in the other quartiles are significantly lower than the overall figure. Indeed, in the lower middle quartile, the gender pay gap is reversed, with the average hourly rate of pay for male employees being 0.2 % lower than it was for female employees.
Analysis of the gender pay gap by job role, rather than quartile, adds further insight. All roles were categorised into three levels: directors and senior management; middle management and specialist roles; and support workers and administrators. The results of this categorisation reflect the quartile analysis. The greatest gender pay gap is in the senior level, whilst at the management and specialist level the gender pay gap is reversed, with male roles being paid less on average than female roles.
Why We Have a Gender Pay Gap at Fair Ways and Plans to Reduce This
Although we are confident that men and women are paid equally for carrying out the same role, it is clear from the results above that we do have a gender pay gap when we compare the overall average pay and bonuses for men and women.
Fair Ways operates a robust pay policy with all employees pay being determined by the Pay Band their role is allocated to. Progression through the different Levels in each Pay Band is monitored by the rigorous and non-discriminatory Fair Pay Panel process.
One of the reasons that there are significantly more men than women in the highest paid positions is that women are more likely to work in part-time roles, which have had fewer opportunities for progression. We recognise that it is increasingly difficult for people to balance home and work commitments and that these responsibilities often tend to fall on the woman. We appreciate that to retain these individuals and support them to progress and fulfil their potential is fundamental to the success of Fair Ways and we are committed to exploring ways of meeting their needs and supporting flexible working wherever possible.
The challenge in our organisation, and across Great Britain, is to eliminate any gender pay gap. No single action will achieve this and we appreciate that making a difference will take time. However, we plan to engage our employees in order to understand their views and any suggestions they may have through a series of focus groups, encouraging participation from as many employees as possible.
We reaffirm our commitment to treat all employees equally and to promote a diverse and inclusive culture and we will explore ways of enabling flexible working to suit employees’ lifestyles wherever possible. Learning and Development initiatives also encourage staff to develop and move in to higher paid roles, therefore management and career development programmes will be explored in order to retain talent, which should assist in redressing the pay gap. The HR team will review current recruitment and development practices to ensure females are encouraged into higher paid roles and all recruiters are suitably trained to recognise the potential they may have for unconscious bias in recruitment decision making.
I confirm the gender pay gap data contained in this report is accurate as of the snapshot date 5th April 2017.
Vivien Sheath, Finance Director