How to carry out a gender pay audit
The Gender Pay Gap report is another useful tool to help companies focus minds on gender diversity.
As a practitioner I am using our report to identify areas where I can focus my attention to remove unconscious bias, change behaviours, and support women in work.
The purpose of all this work is to help achieve our ambition for Fujitsu UK&I to be the tech company where women come to succeed, which in turn will help drive business results.
How is the gender pay gap calculated for the UK?
The gender pay gap is a measure of the difference between men’s and women’s average earnings across an organisation or the labour market. It is expressed as a percentage of men’s earnings.
The Office for National Statistics produces an Annual Survey of Hours and Earnings (ASHE) report. The ASHE 2016 showed that the UK pay gap is 18.1%.
This is a useful benchmark. However, it is not the whole story. At Fujitsu, we are keenly aware that the gender pay gap for the tech industry is higher at 25%.
We have seen some progress on narrowing the UK’s gender pay gap, which is now at its lowest level since ASHE began in 1997. However, the gap has only been changing incrementally over the last six years. At current rates of change, it could take over 100 years to close the gap altogether.
It is hoped that the new gender pay gap reporting requirements will accelerate the pace of change by shining a spotlight on the issue.
How did we set about doing our gender pay report?
We always conduct an equality check of our annual pay review to ensure fairness. Gender pay gap reporting was a new way for us to look at pay differences between men and women.
Our first step was to bring together a project team. We were very aware that pay is only one factor contributing to the gender gap, so we wanted to engage a team that went beyond the reward function.
We brought together HR professionals who specialise in employee relations, diversity and inclusion, and business transformation as well as reward. We all had very different perspectives and found it hugely valuable to learn from each other’s approaches to make sure we considered all the factors that could contribute to a gender pay gap.
We extracted our payroll information from April 2017 and used this data for the calculations which will be required to be included in gender pay gap reports:
The gender pay gap reporting measures
- The mean gender pay gap for all relevant employees
- The median gender pay gap for all relevant employees
- The mean bonus pay gap for all relevant employees
- The median bonus pay gap for all relevant employees
- The proportion of men and women receiving a bonus payment in the previous year
- The proportion of men and women in each quartile pay band
The mean provides the mathematical average of all the numbers in the dataset. The median figure is based on the middle value in the dataset. The regulations give step-by-step guidance on how to make all of these calculations.
We asked our lawyers to confirm that our methodology was correct and fully compliant with the legal requirements.
Inclusions and exclusions
So far this probably sounds quite simple, depending on how comfortable you are with maths!
Like most companies, we already had the pay data that we were required to collect. We were just analysing it in new ways.
If you don’t already have robust HR data about your employees, it is vital to make sure you have recorded the gender and pay information of all your employees as a first step to help with these calculations.
It was more complicated to check we had the right people and pay information in our dataset. The regulations provide detailed definitions of who counts as a ‘relevant employee’ for gender pay reporting and the types of pay and benefits which should be included and excluded from the calculations.
The detail of these can be surprising. Women on maternity leave if receiving no pay and other groups of employees should be excluded from your calculations, while certain contractors should be taken into account.
We had to carefully review our base data to ensure that all and only the relevant employees were included.
The most important step is deciding what actions to take to drive improvements. Your gender pay gap report will give you a better idea of the scale of your challenge, and the most important areas to address to narrow your gender pay gap.
Fujitsu actually launched its new gender diversity approach back in 2013. Michael Keegan, then Head of Fujitsu UK&I and the first sponsor of our Women’s Business Network, set a goal of moving women in our company and in senior roles to 30%. He began a process of demanding more from our recruitment teams focusing strongly on our talent pipelines.
A huge area of focus for us is science, technology, engineering and mathematics (STEM) education for girls. In 2016 only 16% of computer science graduates were female.
This May, we launched a new schools engagement strategy to broaden the appeal of technology, with a strong focus on ensuring that girls will be as likely as boys to study STEM subjects. We are conscious that we have to tackle this industry problem or we are in real danger of never closing the gender pay gap.
Getting more girls into ‘feeder’ roles will tackle one of the biggest causes of the tech sector’s gender pay gap – occupational segregation.
Within Fujitsu, women make up 61% of our business support roles, which tend to be lower paid, and only 16% of our technical roles, which tend to be more highly paid. We are determined to increase gender diversity in all areas of our business.
Our gender diversity strategy is already paying off for our junior talent programmes: 31% of Fujitsu apprentices are women compared to the national average of 10%. And 45% of our graduate intake in 2016 were female, with women taking up more than 50% of technical graduate roles.
This year, women will make up 49% of our 2017 intake of graduates – an increase from 36% back in 2014. This will help us to develop a stronger pipeline of female talent and achieve a sustainable improvement in gender balance at senior levels.
Fujitsu will continue to drive greater gender diversity and inclusion within our workforce, and sector-wide initiatives to inspire more girls to develop careers in the IT Sector.
The business imperative
The benefits of closing the gender pay gap have been decisively proven again and again.
Greater gender diversity – especially at senior levels – translates into higher business earnings and improved growth; the ability to attract and retain the best people; greater innovation and improved decision-making; and stronger relationships with customers and partners.
On 5 April 2017, we took our snap shot data and are in the process of analysing the results and engaging with employees to prepare our narrative. We aim to publish our gender pay gap report in the context of progress made since 2013 and supporting this with our action plan going forward.
The figure itself is a catalyst that focuses the mind – it will broadly tell us how we doing against the UK as a whole and against our peers in the tech sector. It will tell us if our strategy is working and if we are improving.
The real impact, however, is on what we do next to drive recruitment and retention rates, secure our talent pipeline and support more women into senior roles.
The upcoming gender pay gap reporting regulations require UK employers with 250+ employees to disclose their gender pay gap. Read Sarah’s article ‘What does the gender pay gap actually mean?‘.