Gender Pay Gap Reporting 2018

Executive Summary

As a progressive employer who believes equality is one of the key pillers of a successful business, we are again aiming to be one of the first to comply with the annual reporting requirements of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017.

In our second year of reporting we have seen:

  • Our mean gender pay gap fall to 10.7% from 12.8% last year (compared to UK average of 18%) which drops to 1.5% (down from 4.2% last year) when anti-social hours working allowances are excluded.
  • Our median gender pay gap fall significantly to 5.3% from 11.1% last year which drops to -6.9% (down from -4.5% last year) when anti-social hours working allowances are excluded.
  • Our mean bonus gender pay gap fall to 70.1% from 92% last year.
  • Our median bonus gender pay gap fall to 85.3% from 91.3% last year.
  • A bonus payment was received by 17.2% of females up from 2.9% last year compared to 6.4% of males up from 5.2% last year.
  • The proportion of each gender in each quartile pay band:
QuartileLowerLower middleUpper middleUpper
Female19.5%3.9%3.8%10.4%
Male80.5%96.1%96.2%89.6%
  • Proportion within quartile are skewed as only 9% of the workforce are female, when looking at dispersion of each gender across the same pay quartiles shows that 27.6% of females employed are in the upper pay quartile compared with only 24.6% of males employed being in the upper pay quartile.

DECLARATION

I hereby confirm that the information provided in this report to be accurate.

 

John Cooper

CEO

August 2018

 

INTRODUCTION

 

Interfloor Limited is required by law to carry out Gender Pay Reporting under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017.  Whilst reporting must be complete by end of March 2019, as a progressive employer who believes fairness in all we do is one of the core foundations to our business approach, we again have decided to report as quickly as possible after the relevant pay period has expired, which for Interfloor was 30 April 2018.

The requirement involves carrying out six calculations that show the difference between the average earnings of men and women in our organisation.  We can use these results to assess:

  • the levels of gender equality in our workplace
  • the balance of male and female employees at different levels
  • how effectively talent is being maximised and rewarded.

The challenge for Interfloor and across Great Britain is to eliminate any gender pay gap.

GENDER PAY GAP CALCULATIONS

1. The Mean Gender Pay Gap

Mean averages are useful because they place the same value on every number they use, giving a good overall indication of the gender pay gap, but very large or small pay rates can dominate and distort the answer.  The mean gender pay gap for April 2018 was 10.7%, down from 12.8% last year and significantly better than the UK average for all employees of 18% in 2017.

Our analysis of comparable roles shows that we reward men and women fairly for similar work.  There are 2 key drivers behind the mean gender pay gap, the largest of those being shiftwork.  As a traditional manufacturing Company two thirds of our employees work shiftwork, 99% of whom are male, and who receive an additional allowance which is not related to their value to the business but is compensation for anti-social working hours.  Any women working these shift work patterns would receive exactly the same remuneration. Excluding shift working allowances from the calculation brings the mean gender pay gap significantly down to 1.5% from 4.2% last year.  Whilst there is no occupational reason for male dominance in this role we have found it extremely difficult to attract females to manufacturing roles.

The second key driver reflects the lower representation of women at senior levels within the organisation and especially our difficulty in recruiting women in operations, technical and engineering disciplines.

2.The Median Gender Pay Gap

Median averages are useful to indicate what the ‘typical’ situation is i.e. in the middle of an organisation and are not distorted by very large or small pay rates.  The median gender pay gap for April 2018 was 9.1% down from 11.1% last year.

The Company offers a salary sacrifice Self-Invested Pension Plan to all employees and the gender gap is calculated post-sacrifice, interestingly pre-sacrifice the gap reduces from 9.1% to 5.3% as female employees are on average more likely to maximise the pension investment opportunity than their male colleagues.

Once again shift working allowances were the key driver in the gap and excluding these anti-social working payments the gap was actually -6.9% (i.e. the middle paid female was paid more than the middle paid male), and improvement from -4.5% last year.

As a median the lower representation of women at senior levels within the organisation is much less pronounced.

3.The Mean Bonus Gender Pay Gap

Whilst this can be a good measure where bonus payments are common across an organisation, large or small bonus payments can dominate and distort the answer where such payments are not prevalent across the business, which is the case for Interfloor.  The mean bonus gender pay gap for the 12 months to 5 April 2018 was 70.1% an improvement from 92% the previous year.

Firstly bonus schemes within Interfloor are limited to Senior Management as well as UK and Export Sales functions which make up only 9% of the workforce, secondly bonus payments in 2017/18 were earned in our FY 2016/17.

The key driver of the gap is again twofold, firstly the lower representation of women at senior levels within the organisation, secondly the very limited achievement of bonus payments across the UK and Export Sales functions where there is more female representation.

4. The Median Bonus Gender Pay Gap

The median bonus gender pay gap was 85.3% down from 91.3% for the 12 months to 5 April 2018, generally for the same reasons as the mean gap above.

5. The Proportion of Males & Females Receiving a Bonus Payment

As achievement of bonus payments is based on various business performance metrics, the proportion of those who receive a bonus payment can be skewed from those who were eligible to participate on a bonus scheme.  For FY2016/17, payments for which were made in 2017/18, 17.2% of females received a bonus payments of the 27.6% of females eligible to participate in a scheme, an increase from 2.9% paid a bonus last year from the 8.6% eligible to participate in the scheme.  Compared this to 6.4% of males who received a bonus payments of the 10% of males eligible to participate in a scheme, an increase from 5.2% paid last year with 9.2% eligible to participate in the scheme.  In essence a larger proportion of female employees were eligible to participate in a scheme and a larger proportion of female employees received a bonus payment.

6. The Proportion of Males & Females in Each Quartile Pay Band

The proportion of each gender in quartile pay bands for April 2018 shows:

QuartileLowerLower middleUpper middleUpper
Female19.5%3.9%3.8%10.4%
Male80.5%96.1%96.2%89.6%

As female employees only account for 9% of the workforce this can be partially misleading, the dispersion of each gender across the same pay quartiles shows:

QuartileLowerLower middleUpper middleUpper
Female51.7%10.3%10.3%27.6%
Male22.1%26.4%26.8%24.6%

As outlined above, allowances paid entirely for anti-social working patterns and not related to the value of the role or person within the organisation skews our figures badly given the high proportion of shiftworkers and difficulties in recruiting females to these operations roles.  Excluding shift allowances the proportion of each gender in quartile pay bands is quite different:

QuartileLowerLower middleUpper middleUpper
Female14.3%1.3%7.7%14.3%
Male85.7%98.7%92.3%85.7%

And more interestingly the dispersion of each gender across the same pay quartiles excluding shift allowances shows:

QuartileLowerLower middleUpper middleUpper
Female37.9%3.4%20.7%37.9%
Male23.6%27.1%25.7%23.6%

 

ACTION PLAN

Recruitment & Retention

Unfortunately fewer women study and work in science, technology, engineering and maths [STEM] disciplines in the UK which form a large part of our organisation.  In the medium to longer terms our aim is to recruit/develop more female employees into our operations focused functions as well as our Senior Management Team, this process began in January 2016 with the appointment of our first female member of the Company Management Team in the role of Marketing Director.

In order to achieve this aim we will continue to:

  • Support national activities from Government and education/training providers to encourage increases in female participation in STEM subjects.
  • Review our recruitment & retention strategies to ensure they focus on attracting female talent in key areas.
  • Continue to attempt to break down the stereotypical barriers and beliefs that traditional manufacturing should be a male dominant environment.

 

Pay Systems

In determining pay and reward for our employees we balance a number of factors, including the economic climate, company performance as well as external market for the  roles that we offer.  Whilst our reward systems have always ensured full compliance with equal pay, we intend to integrate gender pay gap considerations into future reviews of pay and reward.