Gender Pay Gap Reporting 2022

EXECUTIVE SUMMARY

As a progressive employer who believes equality is one of the key pillars of a successful business, we are pleased to once again report against the annual requirements of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017.

In our sixth year of reporting we unfortunately report a mixed set of results.  Following the covid pandemic, introduction of IR35, Brexit and the current cost of living crisis which have all had a serious impact on the labour market; recruitment and retention has been extremely challenging over the last 12 months or so.  Our results have been impacted specifically by the loss of one of highest earners who was female, as well as a significant wage increase for HGV drivers through market forces who are predominantly male.

• Our mean gender pay gap, which started at 12.8% in 2017, fell progressively over the next few years until it was finally closed last year at -2.4%, has slipped back to 2.0% for 2022
• Our median gender pay gap, which started at 11.3% in 2017, has fallen continuously every year and is now down to 3.2% for 2022
• Our mean bonus gender gap fell significantly 48.6% in 2021 to just 3% in 2022
• Bonus payments were received by 16% of females compared to only 5% of males

The proportion of each gender in quartile pay bands is skewed as only 10% of the workforce are female, however when we look at dispersion of each gender across the same pay quartiles it shows a significantly different picture:

DECLARATION

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

John Cooper

CEO

3 August 2022

INTRODUCTION

Interfloor Limited is required by law to carry out Gender Pay Reporting under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017.  We are a progressive employer who believes fairness in all we do is one of the core foundations to our business approach.

The reporting 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 the UK is to eliminate any gender pay gap.

GENDER PAY GAP CALCULATIONS

1. The Mean Gender Pay Gap

We have shown a significant year on year reduction of our mean gender pay gap and in the first five years having completely removed the gap, unfortunately the gap has re-appeared at 2% this year.  This was partly driven by the loss of one of our Directors who was female, as well as a significant wage increase for HGV drivers through market forces who are predominantly male.

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.

Our analysis of comparable roles shows that we reward men and women fairly for similar work.  There were 2 key drivers behind our 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 -5.8% meaning we on average pay our female employees much better than their male counter-parts when we exclude anti-social working payments.  Whilst there is no occupational reason for male dominance in this role we continue to find 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. However, whilst just over 4 years ago we had 0% female representation in our Senior Management Team, we now have 20%.  Our next area of focus continues to be middle management.

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.

Once again shift working allowances were the key driver in the gap and excluding these anti-social working payments the gap was actually -7.5% (i.e. the middle paid female was paid more than the middle paid male).

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.  This is the case for Interfloor as bonus schemes are limited to Senior Management as well as UK and International Sales functions which make up less than 10% of the workforce.

4. The Median Bonus Gender Pay Gap

The median bonus gender pay gap favoured our male employees this year, but similar to the mean gap above is distorted by a very small number of employees.

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

As achievement of bonus payments is based on various business performance metrics, after a decent trading year the number of employees receiving a bonus grew and female employees still faired better than their male counterparts.

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

The proportion of each gender in quartile pay bands for April 2022 shows:

As female employees only account for 10% of the workforce this can be partially misleading, the dispersion of each gender across the same pay quartiles shows:

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 significantly, given the high proportion of shift workers and difficulties in recruiting females to these operations roles.  Excluding shift allowances the proportion of each gender in quartile pay bands is quite different:

And more interestingly the dispersion of each gender across the same pay quartiles excluding shift allowances shows that whilst males are reasonably equally dispersed across the quartiles, almost half of females sit in the upper quartile:

ACTION PLAN

Recruitment & Retention

Following the covid pandemic, introduction of IR35, Brexit and the current cost of living crisis which have all had a serious impact on the labour market; recruitment and retention has been extremely challenging over the last 12 months or so.

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 and Middle Management Teams.  Significant progress has been made with 20% Senior Management Team now being female compared to 0% prior to 2016.

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.
• Work with local education authorities to promote female participation in STEM subjects.
• Review our recruitment & retention strategies to ensure they focus on attracting female talent in key areas.
• Develop a production operations and engineering apprenticeship programme with particular focus on recruiting females.
• 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 continue to integrate gender pay gap considerations into future reviews of pay and reward.