Passionate About Diversity and Inclusion
Phoenix Group is committed to doing the right thing and treating our customers, shareholders and colleagues fairly, with an aim to be a responsible corporate citizen. We know that diverse companies which represent the communities and customers they work with perform better. However we also focus on fairness and inclusion simply because it is the right thing to do.
Phoenix Group’s ability to attract, retain and motivate outstanding talent was, for the eighth year in succession, formally recognised in 2018 through our accreditation as one of the UK’s Top Employers’. We’re proud to be recognised as a responsible, sustainable and inclusive employer, who values and rewards the contribution our colleagues make to our business and we believe that our Diversity and Inclusion strategy and the fact that we put our people first contribute to our overall success.
How We Calculate Gender Pay
What is Gender Pay Gap
The Gender Pay Gap is the difference in the total average earnings of males and females, regardless of the nature of their work, across an organisation. It does not compare pay on an individual level for males and females undertaking the same role.
So how is this different to Equal Pay?
Equal Pay refers to the legal requirement that male and female employees who are engaged in equal or similar work, or work of equal value, must receive equal pay. Having reviewed our reward principles we are confident that our Gender Pay Gap and Bonus Pay Gap are not caused by Equal Pay concerns.
Who is included in the calculations?
Our statistics are calculated based on Pearl Group Management Services (PGMS) employees in the payroll period covering 5 April 2018. PGMS is the only employing entity within the group with the required 250+ employees (as per statutory guidelines) however as the majority of our colleagues are employed by this entity our figures can be considered a representative sample.
As at the reporting date, Standard Life remained with Standard Life Aberdeen and therefore are not included within the PGMS statutory reporting figures. Details of the Standard Life Aberdeen GPG figures for 2018 including the transferred population can be found on the SLA Website when they announce their full year results on 13 March.
How is the Gender Pay Gap Calculated?
Mean Gender Pay Gap:
Compares the average male salary from across the whole company and the average female salary from across the company.
Median Gender Pay Gap:
The Median pay gap is calculated by looking at all the male salaries and all the female salaries identifying the middle salary for both and then calculating the difference between these two figures.
What is the Bonus Pay Gap
The Gender Bonus Gap is the difference between average actual bonus payments of males and females across the organisation.
Our 2018 Gender Pay Gap
Over the past year both the gender split across the company and within the top 2 pay quartiles have increased in favour of males, this has impacted our GPG Statistics overall and contributed to an increase in our mean pay gap of 1 % (Median increased by 6%).
As per statutory guidelines this figure uses an average of actual bonus paid across the total number of male and female employees regardless of working hours. Therefore it compares payments for employees working full-time with those working reduced hours or who may have taken extended leave. At Phoenix we have more females than males working in part time roles and so this method of calculation has a negative impact on our bonus gap figure.
Our mean Bonus gap has decreased from 74% in 2017 (2017 median bonus gap was 35%); this is partly due to there not being an LTIP vesting in the reporting period due to a delayed grant 3 years previously. In addition the 2017 figures had two LTIPS vesting in the period therefore there is a significant decrease in bonus earnings between the two reporting periods. We anticipate that the bonus gap would increase next year when there is an LTIP included in the period.
Factors Affecting our Gender Pay Gap
It is recognised that whilst we are committed to taking positive actions to rectify our gender pay gap this is not change that can be affected quickly. However we are committed to undertaking a process of long term change to ultimately deliver a gender balanced and diverse workforce.
According to the World Economic Forum millennial women will comprise about 25% of the global workforce by 2020 and Gen X employees will continue leading the workforce for 15-20 more years.
Therefore, here at Phoenix we recognise that one size doesn’t fit all; therefore our D&I, Talent and Culture strategies provide a tailored approach to a multi-generational workforce developing several coherent, multipronged plans that will help shape the changes needed to narrow the gap.
Representation of women at a senior level
Whilst we are confident that employees are paid equally for equivalent roles we need to improve the number of females in more senior positions as this is a significant reason for the Groups Pay and Bonus gaps, this is illustrated in the Pay Quartile diagram above.
Therefore attracting and retaining millennial women is a business necessity for Phoenix, alongside strengthening the leadership skills of Gen X colleagues.
Building a culture where conversations about career development and flexibility are both frequent and constructive is an important, tangible step towards helping women reach their full potential in the workplace and something we take seriously and encourage as part of our flexible approach to generational change.
Whilst there has been good progress on our broader Diversity and Inclusion agenda our targets set for completion by the end of 2018 have been affected by a number of internal and external changes across our Group over the last two years. For example, the acquisition of a number of companies in 2017 resulted in additional employees and structural changes, and results have also been impacted through acquisition, resignation and retirement. However we are confident that the solid foundations we have put in place through our inclusion strategy will positively impact these figures in the coming years.
A consequence of having more men in senior positions is that higher target levels for annual incentives for senior staff, and other elements of senior remuneration such as the Long Term Incentive Plan (LTIP), contribute to our Bonus Pay Gap.
Our Commitment to Change
We continue to be passionate about creating a truly diverse and inclusive culture and remain committed to reducing our Gender and Bonus Pay Gaps. The Diversity and Inclusion Committee, continues to ensure our targets and initiatives have the highest visibility with Phoenix and that we remained focused on tackling barriers to progression.
We have re-committed to our Women In Finance targets so that by the end of 2021 we will have:
- Minimum of 30% of our top 100 roles (as defined by base salary) to be occupied by women by end 2021.
- Minimum of 40% of green/amber successors to be women by end 2021.
- Group wide gender pay gap to be less than, or equal to, 22%.
To achieve this we focus on five key areas to support our Diversity and Inclusion strategy and the diagram below illustrates how these areas work together to provide a comprehensive approach our D&I agenda.
Some key highlights of the actions we are taking in each of the areas in the above diagram are:
- As part of our inclusion strategy, we have developed a range of networks, focused on LGBT, ethnicity, working parents and young professionals, armed forces and professional women's development and mental health, to gather feedback and insight from all members.
- The Group values the power of its employee voice and through the acquisition of Standard Life Assurance now has further networks in operation across the enlarged group.
- Smart Working
- We continue to focus on empowering colleagues to meet their work and personal obligations in more productive and efficient ways.
- We remain committed to understanding the importance of flexible working both to our colleagues and the success of our business.
- We support line managers to embrace flexible working options for all job levels, regardless of gender.
- Development and Education
- We continue to provide area focused education and development to ensure a more diverse succession plan.
- We have created a direct connection between career conversations and access to coaches for those women identified as part of our succession planning resulting in greater traction from ‘amber’ to ‘green’ statuses regarding readiness for their next role.
- A mentoring programme targeting high achieving females launched with the aim to increase skills and knowledge, and help further careers.
- We have undertaken a strategic review of our employment proposition and our recruitment and selection processes.
- We continue to develop a proposition that is inclusive and attractive to all potential employees.
- We continue to attract and develop talent to maintain a healthy and diverse pipeline.
- Communication and awareness
- We continue to use a variety of communication tools to engage with all Phoenix colleagues to provide them with understanding of the programme and encourage them to understand their own unconscious biases and change their behaviours.
- All employees have obligatory unconscious bias training, with the aim of educating colleagues on the role unconscious bias plays in decisions around recruitment and career progression.
In addition the above we ensure these commitments have board oversight to reflect the importance within Phoenix.
We have laid strong foundations for us to continue to build upon. Whilst we are disappointed our 2018 figures are not reflective of the commitment and focus of our D&I agenda we are clear on our 2019 priorities. We know that combatting a long-established gender imbalance in financial services is a priority for the entire industry, not just for Phoenix. We are firmly committed to playing our part in addressing the Gender Pay Gap, and in the longer term to developing the next generation of female leaders. Our targets are ambitious and sector leading, and we continue to be committed to them.
This report covers employees of Pearl Group Management Services, the main employing entity for The Phoenix Group. The report covers employees at all levels, including the executive team.
We continue to be committed to our existing targets and, from this point forward, we will report our progress against these targets based on our new workforce as of September 2018.
As Group Finance Director for the Phoenix Group, I, James McConville, can confirm that the information contained herein is accurate.
Group Finance Director