GENDER PAY REPORTING - Commentary
Background
As you may be aware, all companies with more than 250 staff employed in the UK are required by law to publish their gender pay differentials.
The data set out below is that required by the UK Government, and is based on the NYK Group Europe Limited (NGE) payroll as at 4th April 2017, to be published by 5th April 2018. It should be noted that, this data does include NGE's former Liner Division.
NGE current position
Senior Management of NGE are fully committed to address diversity issues going forward and have been for some time. In our view, the data above paints a somewhat limited picture and we would like to provide some additional insights and to identify some of the actions we have taken, and will continue to implement in the future, to ensure that this situation continues to be addressed and improved.
Explanation for NGE current position
There are two primary reasons for the differential in gender pay:
- The distribution of male vs female staff, it is apparent that the majority of female staff are in lower grade roles and there is clearly a lack of females at the senior levels.
- The average length of service - this is higher for males than females.
While Senior Management acknowledge these as the key explanations for gender pay differences, it is recognised that neither of these are issues that can be addressed in the short term. However, they are a key focus for Senior Management in tackling gender pay inequality.
Job Grading
The data above only reflects the difference in male vs female pay and does not take into account pay for equivalent roles. One of the major reasons NGE introduced Job Grading a few years ago was to ensure we can look at equivalent pay for equivalent roles. If we look at the differences at the various job grades we can see the following pattern:
This reflects the gender spread with females mainly in the lower grades.
Length of Service by Grade
You will see from the chart below that, with the exception of Grade D, the male length of service is longer. It also shows quite clearly that length of service does relate to progression with service at the most senior grades between 15 and 20 years (approx.):
Average Salaries by Grade
The below chart shows the difference in average salaries for each of the genders by grades.
This does indicate that for two Grades C and G - female salaries are higher than those of males for the equivalent roles. However, in Grades E and F - there are some quite significant differences which require further detailed analysis. It is good to know that there are some pockets of good practice which are not shown by the format of data required by the Government.
Other factors to consider
Distribution of Appraisal Ratings
One of the areas which we have recognised as a potential issue is the distribution of appraisal ratings and whether there is a possibility for underlying bias that could potentially distort the bonus distribution.
At the beginning of each new year Senior Management provide draft appraisal ratings to look at the distribution of the appraisal grades in each business and function. For this year and in the future, we will undertake more detailed analysis to review the gender distribution of appraisal ratings for each of the business divisions to check whether there is any underlying bias.
Flexible Working practices
To ensure we can maximise length of service and encourage individuals to continue working for NGE (and to return to work following parental leave), we have put in place a number of measures to allow flexible working.
While such flexible working may not directly impact on the pay differential, it should encourage colleagues to remain in the organisation and to increase their average length of service, enabling progression both within and through the grades.
While flexible working is not reflected in the Government required statistics, it is a key initiative for NGE. We need to continue to monitor this initiative to ensure it achieves the required outcome.
That said, we can agree that NGE Senior Management cannot be complacent and we need to continually review NGE's position. Senior Management remain committed to continue to review all aspects of NGE's employment package and practices to encourage diversity and address any gender pay issues that are within our control.
Conclusion
While we welcome the gender pay differential reporting, we do believe that it does not tell the full story in terms of NGE's approach and intentions.