At TPR we are committed to promoting transparency and going beyond compliance to drive meaningful change. As such, we have started to explore our additional pay gap data for ethnicity, disability and sexual orientation. This information is voluntarily included for the first time, at the end of this report and will help guide us in developing future priorities for action.
Introduction by Paula Harris, Director of People and Culture
Over the last few years, we’ve made good progress in improving our mean and median gender pay gaps. When we first reported in 2017, our mean and median gender pay gaps were 11.5% and 10.8% respectively, and by 2020 we had reduced these to 6.4% and 6.3%. So, it’s disappointing to see both our mean and median gender pay gaps widen this year to 9.1% and 11.1%, despite a good gender balance and equal access to bonus. We recognise that we need to do more.
Last year, while it was only mandatory to report on gender, we chose to voluntarily publish additional diversity pay gap data focused on disability, ethnicity, and sexual orientation. We did this as part of our commitment to promote transparency and go beyond legal compliance to drive meaningful change. We’re doing this voluntarily again this year to provide continuity and transparency in our data. We understand that there are more protected characteristics to report on, however, and have chosen a specific focus on disability, ethnicity, and sexual orientation to support our wider aims set out in our Equality, Diversity and Inclusion (EDI) Strategy 2021 to 25.
As part of our commitment to equality, diversity and inclusion, we set ourselves ambitious objectives in our EDI Strategy 2021 to 25 to reduce the pay gaps for gender, ethnicity, LGBT+ and disability pay gaps. We also set ourselves a target to reduce our gender pay gap to 2% by 2024 and publish an action plan by 2022 setting how we will reduce the pay gaps for under-represented groups.
We know we have a lot of work to do to achieve our ambitions and that closing our diversity pay gaps for gender, disability, ethnicity and sexual orientation is complex and challenging. We also recognise that the data may fluctuate year-on-year, and there are no quick fixes. This is because pay gaps reflect both internal and external factors, including the Covid-19 pandemic which is shown to have disproportionately affected women’s earnings and career prospects. These factors require long-term action which will take time to produce a positive outcome.
We’re fully committed to take the necessary long-term action and we have focused on making sure that we have the right structures, resources and expertise in place to deliver against these commitments. We have recruited for new specialist roles that will support the development and implementation towards these actions, including an EDI Lead and a Reward Manager, and we are recruiting for a Head of Talent and Development. We are also partnering with external reward specialists who are performing a series of analysis to identify the contributing factors and the interventions required to address the issues.
We believe in the importance of data and the context in which data is presented, but numbers in isolation are only part of the story. In order to have a transparent and clear dialogue about EDI across TPR, we must identify what the numbers are telling us and how we link these findings into our EDI and wider People and Culture Strategies.
We will be sharing our plans for action later in 2022, and our progress towards these will be monitored by our EDI Committee.
Paula Harris,
People and Culture Director
Gender pay gap report
An overview of the gender pay gap reporting legislation
Under the Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017, employers with 250 or more employees are required to publish gender pay gap information annually.
Gender pay gap reporting involves carrying out six calculations that show the difference between the average earnings of men and women. This includes the mean and median gender pay gaps, the mean and median gender bonus gaps, the percentage of men and women who received bonus pay and the percentage of men and women in each pay quartile.
If a workplace has a particularly high gender pay gap, this can indicate there may be a number of issues to deal with, and the individual calculations may help to identify what those issues are.
It should be noted that the gender pay gap is different from equal pay, which deals with the differences between men and women who carry out the same jobs, similar jobs or work of equal value. It is unlawful to pay people unequally because they are a man or a woman. A gender pay gap does not equate to the existence of an equal pay problem, although a gender pay gap may be a trigger for further investigation about the reasons why the gap exists. In TPR we use the Korn Ferry job evaluation methodology to ensure equal pay for work of equal value.
As in previous years, we have voluntarily gone beyond our statutory gender pay gap reporting requirements to provide a narrative explaining the factors contributing to our gender pay gap and the actions we’re taking to reduce it.
In addition, for the second time, we have included information on our diversity pay gaps for disability, ethnicity, and sexual orientation within this gender pay gap report to promote transparency and drive meaningful change.
Gender pay gap data
Gender representation
TPR’s gender pay gap data was collected on the snapshot date of 31 March 2021. At this time there were 825 people within the TPR’s workforce in scope for reporting, consisting of 429 women (52%) and 396 (48%) men.
This shows that there was a relatively even balance of men and women in scope of the calculation.
The tables below show our overall median and mean gender pay and bonus gaps based on hourly rates of pay and bonus.
Mean and median gender pay gap
The gender pay gap is the difference between women’s pay and men’s pay as a percentage of men’s pay (a positive percentage indicates men have higher pay).
| Difference in mean (average) rate of hourly pay | Difference in median hourly rate of pay | |
|---|---|---|
| 2021 | 9.1% | 11.1% |
| 2020 | 6.4% | 6.3% |
There have been increases in the mean and median pay gaps. The mean pay gap increased by 2.7 percentage points, from 6.4% to 9.1%. The median pay gap increased by 4.8 percentage points, from 6.3% to 11.1%.
As in previous years our analysis shows that our gender pay gap continues to be driven by:
- an under representation of women working in technical teams that command higher salaries in the market, such as actuarial, business analysis, data, finance, investment consultancy and IT
- a greater proportion of women working within non-technical roles which command lower salaries in the market, such as customer support and administration
The increase over the last year is primarily a consequence of a higher number of men being recruited into higher paying roles over the reporting period, with more women joining the organisation in lower paying roles.
Mean and median gender bonus gap
The bonus gender pay gap is the difference between women’s bonus payments and men’s bonus payments as a percentage of men’s payments.
We operate an annual discretionary bonus scheme for performance over and above the requirements of the job. Our bonus arrangements allow managers to nominate colleagues for a non-consolidated bonus of up to 10% (strong) or up to 20% (exceptional) of their salary. We also offer an additional up to 5% bonus category to recognise excellent work on individual projects or for part of a financial year.
| Difference in mean bonus pay | Difference in median bonus pay | |
|---|---|---|
| 2021 | 10.2% | 6.8% |
| 2020 | 5.0% | -0.1% |
There have been increases in the mean and median bonus gaps this year. The mean bonus gap increased by 5.2 percentage points, from 5.0% to 10.2% in favour of men. The median bonus gap increased by 6.9 percentage points, from -0.1% to 6.8% in favour of men.
The increase in our bonus pay gaps is directly correlated to the higher number of men in higher paying roles, as our bonus award is calculated as a percentage of an individual’s salary.
The percentage of men and women receiving bonus pay
| Percentage of men and women receiving bonus pay in the 12 months ending 31 March | |||
|---|---|---|---|
| 19/20 | 20/21 | Difference | |
| Men | 36.7% | 40.9% | 4.2% |
| Women | 37.9% | 40.6% | 2.7% |
The percentage of men and women receiving a bonus over the last 12 months was near equal with 40.9% of men receiving a bonus and 40.6% of women receiving one. This was an increase of 4.2 percentage points for men and an increase of 2.7 percentage points for women compared with the previous reporting year.
We continue to use moderation meetings to guard against discrimination or favouritism to ensure performance ratings and bonus decisions are fair and consistent. Moderation meetings are held at directorate, senior leadership team and executive committee level. This year, we strengthened our approach to moderation for the new 2021-22 performance year by adding a pre-moderation meeting before end of year performance reviews to add another level of consistency in the application of the ratings and nominations. This process has been underpinned by strengthening our guidance and mandatory training for people managers around giving and receiving feedback, and objective setting.
The percentage of men and women in each pay quartile
The percentage of men and women in each mean hourly rate quartile pay band.
| Quartiles | ||
|---|---|---|
| Men % | Women % | |
| Q4 Upper quartile (Q4) (highest paid) | 54.4% | 45.6% |
| Q3 Upper middle quartile (Q3) | 51.9% | 48.1% |
| Q2 Lower middle quartile (Q2) | 45.4% | 54.6% |
| Q1 Lower quartile (Q1) (lowest paid) | 40.3% | 59.7% |
| 48.0% | 52.0% | |
Women made up 45.6% of the upper quartile (Q4) (highest paid), 48.1% of the upper middle quartile (Q3), 54.6% of the lower middle quartile (Q2), and 59.7% of the lower quartile (Q1) (lowest paid).
Compared to last year there has been a shift in the representation of women across the quartiles with 1.9 percentage points decrease in the upper quartile (Q4) (highest paid), 1.4 percentage points increase in the upper middle quartile (Q3), 0.2 percentage points increase in the lower middle quartile (Q2), and 5.0 percentage points increase of women in the lower quartile (Q1) (lowest paid).
Pay gap data for disability, ethnicity, and sexual orientation
We have voluntarily included information on our diversity pay gaps for disability, ethnicity, and sexual orientation for the second time, to provide continuity and transparency in our data.
As there is no government guidance on how to report on pay gaps for disability, ethnicity or sexual orientation, this data has been calculated in line with the methodology used for mandatory gender pay gap reporting. A positive pay gap percentage indicates that the majority population is paid more.
We know that reporting pay gap data for disability, ethnicity and sexual orientation, presents more challenges than gender pay gap reporting, not least because of lower voluntary declaration rates and analysis of smaller data sets which can fluctuate significantly year-on-year. Only those staff who have chosen to declare their disability, ethnicity or sexual orientation are included in the calculations.
The rate of staff who have chosen to disclose their disability, ethnicity and sexual orientation is lower than our data return for gender (which is 100% as it’s not reliant on voluntary disclosure). Our declaration rates as at 31 March 2021 were 86% for disability, 84% for ethnicity, and 73% for sexual orientation. This means we have an incomplete picture of our workforce which limits the accuracy of our reporting as well as our ability to fully understand and tailor action to close the gap. To improve this, we have plans in place to deliver an internal communications campaign to encourage more of our people to share their diversity information.
From the workforce data we hold, which is a wider sample, we know that 5% of colleagues declared a disability, 7% of our workforce declared they were from an ethnic minority background, and 8% of our workforce declared themselves gay, lesbian or bisexual. Further analysis of this data shows that there is little representation within our senior leadership levels within the organisation and we believe this is a significant driver of our pay gaps for disability, ethnicity and sexual orientation. Improving representation within our executive committee, senior leadership team and across all levels of the organisation is a focus for us in our EDI strategy.
Disability pay gap data
The overall disability pay and bonus gap is more favourable for those declaring a disability compared to colleagues who didn’t declare a disability.
Mean and median disability pay gap
| 2020 | 2021 | Difference to 2020 | |
|---|---|---|---|
| Mean | -20.9% | -12.7% | 8.2% |
| Median | -24.8% | -17.6% | 7.2% |
Mean and median disability bonus gap
| 2020 | 2021 | Difference to 2020 | |
|---|---|---|---|
| Mean | -0.6% | -56.0% | -55.4% |
| Median | -12.7% | -69.3% | -56.6% |
The percentage of non-disabled and disabled employees receiving bonus pay
| 2020 | 2021 | Difference to 2020 | |
|---|---|---|---|
| No disability | 37.4% | 43.2% | 5.8% |
| Disability | 40.0% | 39.5% | -0.5% |
The percentage of non-disabled and disabled employees in each pay quartile
| Quartiles | ||
|---|---|---|
| No disability | Disability | |
| Q4 Upper quartile (Q4) (highest paid) | 91.1% | 8.9% |
| Q3 Upper middle quartile (Q3) | 93.9% | 6.1% |
| Q2 Lower middle quartile (Q2) | 96.7% | 3.3% |
| Q1 Lower quartile (Q1) (lowest paid) | 94.5% | 5.5% |
| 94.0% | 6.0% | |
Ethnicity pay gap data
The overall ethnicity pay and bonus gap is less favourable compared to white colleagues.
Mean and median ethnicity pay gap
| 2020 | 2021 | Difference to 2020 | |
|---|---|---|---|
| Mean | 11.4% | 16.7% | 5.3% |
| Median | 11.7% | 13.4% | 1.7% |
Mean and median ethnicity bonus gap
| 2020 | 2021 | Difference to 2020 | |
|---|---|---|---|
| Mean | 0.8% | 17.3% | 16.5% |
| Median | 23.7% | 33.0% | 9.3% |
The percentage of white and minority ethnic employees receiving bonus pay
| 2020 | 2021 | Difference to 2020 | |
|---|---|---|---|
| White | 38.5% | 44.6% | 6.1% |
| Minority ethnic | 26.9% | 16.0% | -10.9% |
The percentage of white and minority ethnic employees in each pay quartile
| Quartiles | ||
|---|---|---|
| White | Minority ethnic | |
| Q4 Upper quartile (Q4) (highest paid) | 94.5% | 5.5% |
| Q3 Upper middle quartile (Q3) | 90.1% | 9.9% |
| Q2 Lower middle quartile (Q2) | 85.2% | 14.8% |
| Q1 Lower quartile (Q1) (lowest paid) | 89.0% | 11.0% |
| 89.7% | 10.3% | |
Sexual orientation pay gap data
The overall sexual orientation pay and bonus gaps are less favourable for those who identify as lesbian, gay, bisexual or recorded their sexual orientation as ‘other’ (LGB+) compared to heterosexual colleagues.
Mean and median sexual orientation pay gap
| 2020 | 2021 | Difference to 2020 | |
|---|---|---|---|
| Mean | 12.2% | 10.4% | -1.8% |
| Median | 15.1% | 10.1% | -5.0% |
Mean and median sexual orientation bonus gap
| 2020 | 2021 | Difference to 2020 | |
|---|---|---|---|
| Mean | 6.3% | 3.3% | -3.0% |
| Median | 18.5% | 33.6% | 15.1% |
The percentage of heterosexual and LGB+ employees receiving bonus pay
| 2020 | 2021 | Difference to 2020 | |
|---|---|---|---|
| Heterosexual | 37.1% | 41.0% | 3.9% |
| LGB+ | 41.2% | 41.8% | 0.6% |
The percentage of heterosexual and LGB+ employees in each pay quartile
| Quartiles | ||
|---|---|---|
| Heterosexual | LGB+ | |
| Q4 Upper quartile (Q4) (highest paid) | 92.9% | 7.1% |
| Q3 Upper middle quartile (Q3) | 88.7% | 11.3% |
| Q2 Lower middle quartile (Q2) | 89.9% | 10.1% |
| Q1 Lower quartile (Q1) (lowest paid) | 88.7% | 11.3% |
| 90.0% | 10.0% | |
Taking action to close our diversity pay gaps
As highlighted in the introduction to this report, closing our diversity pay gaps for gender, disability, ethnicity and sexual orientation will not be quick or simple, but we’re committed to take the necessary long-term action to reduce them.
We’re currently focusing our efforts on making sure that we have the right structures, resources and expertise in place to deliver against these commitments and partnering with external reward specialists to support us identify the issues and interventions required to address the issues.
We will link these findings into our EDI and wider People and Culture Strategies and share our plans for action later in 2022.
We will provide a report of progress towards our wider EDI strategy in our annual report and accounts 2021 to 22.