Women in Finance and Gender Pay Gap

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1 Women in Finance and Gender Pay Gap aldermore.co.uk

2 Foreword As we have now reached our target of females in senior roles, we are now re-focusing our attentions to the wider goals of seeing an equal gender balance across all levels within the Bank, as well as seeing our gender pay gap decrease year on year Phillip Monks, OBE, Chief Executive Officer In September 2017 we updated on how we were doing against the targets we set out when we signed the HM Treasury Women in Finance Charter in The Charter is a commitment to improve gender balance across financial services and as a business we see gender representation as an integral part of our Diversity and Inclusion agenda. We know and understand the importance of Diversity and Inclusion, not only internally for our colleagues, but also for the understanding of our customers. We want to ensure that colleagues within our organisation are not only better represented, but most importantly supported, to achieve their best. Since we signed up to the Charter, we have worked hard to make progress against our targets, one of which was to see our female representation across the senior leadership increase to 30% by We are delighted to report it s already been met. Our ambition now is to work towards exceeding this target and we will be reflecting on what these targets should be in the next 12 months. But we won t be stopping there. We are re-focusing our attentions to our wider goal of seeing an equal gender balance across all levels within the Bank. Further details of what we have achieved to date have been detailed in this report. Our aim is to ensure that Aldermore remains a vibrant place that people want to work, with colleagues feeling included and supported. In order to make a difference, we have refreshed the key behavioural guidelines existing within our organisation and going forward we will be embedding these further in our management processes. Understand what matters Make a connection with others Get the full picture See the opportunity Do the right thing Act in the best interest of others Think joined up Own it! Make a difference Keep it simple Deliver effectively Shout about the good stuff We have also set up working groups to help us drive forward a number of initiatives to support our goals and this report will update you on what our colleagues have been up to over the past year. A steering committee, to focus specifically on gender has met regularly to discuss and look at actions across a wide range of initiatives including; flexible working, mentoring and training and development. We have amended specific policies which now ensure that our managers are empowered to do what s best for their teams. We understand that everybody s circumstances are 2

3 different and we are working to ensure that what we have in place works for everyone. Our Diversity and Inclusion group, which supports our wider organisation beyond gender, has also been influential in taking strides towards making Aldermore a fair and balanced workplace. Reporting Gender Pay Gap figures is now mandatory for businesses with 250 or more employees, and the deadline for this year s data is April We are also taking this opportunity to update on our figures early. As of April 2018, our mean gap stood at 29.0%. This represents a slight improvement in our mean gender pay figure since 2017 and is mainly due to the change in gender representation across our business something we are continuing to address. We should note that since releasing our Gender Pay Gap figures for 2017, our bonus pay gap has increased. The increase in 2018 has occurred primarily because in March 2018, Aldermore was acquired by the FirstRand Group, one of South Africa s largest financial services institutions, which led to vested payments of our benefits packages for many colleagues. We can be confident however, that this year is a one off. Aldermore is now a UK subsidiary of a wider portfolio of businesses, most of which are based in South Africa, with another based in the UK - MotoNovo Finance. Our new ownership will see our business grow and develop across both the short and long term and we are really excited to see how this will help the Bank to evolve. A further analysis of this is included in the report. Phillip Monks, OBE, Chief Executive Officer Women In Finance and Gender Pay our goals By signing up to the Charter, we have committed as a business to: We have also gone one step further to set ourselves a target around our gender pay: Having 30% of our senior 60% managers as female by 2020 Complete ahead of the target deadline Ensuring a 50/50 gender split across the Bank is maintained Maintained for 2018 To close our pay gap year on year 3

4 So what are we doing and how we are doing it? As well as our numerical targets we are also adhering to the four recommendations in the Charter: Have one member of our senior executive team who is responsible and accountable for gender diversity and inclusion Complete assigned Christine Palmer, Chief Risk Officer We also have advocates and sponsors of the wider Diversity and Inclusion agenda (Patrick Jelly) Set internal targets for gender diversity in senior management Publish progress annually against these targets in reports on our website Complete 30% of our senior leadership population to be female Achieved Complete complete for with our reports To ensure the pay of the senior executive team is linked to delivery against these internal targets on gender diversity Complete all our senior leadership population have a relevant bonus element linked - Maintained 4

5 Leadership So one year later, we are so proud to be able to report that we have hit our 30% target of females in senior roles, ahead of the expected deadline of Since last year we have focussed our attentions on increasing female representation across our senior leadership population and we are now proud to have a more diverse Executive Committee. At the time of reporting, we have 12 females in leadership roles, one of which was a new appointment into our Executive team, Sue Hayes Group Managing Director Retail Finance. Sue joins us with a wealth of experience and passion for the work we are doing here around Women in Finance and Diversity and Inclusion. The targets we initially set ourselves were based on the Bank from two years ago and since this time we have become part of a larger business. Our strategic plans for the future will see us enhance and develop these targets including integrating another UK based business, MotoNovo Finance, with Aldermore. For the time being, we will be continuing to work to ensure that we maintain our existing level of representation and continue where possible to positively promote opportunities around the business. Christine Palmer, our Chief Risk Officer, remains the accountable executive for Women in Finance and helps the business to drive its gender initiatives through a steering committee group. Alongside our HR Director Rob Divall and our Commercial Director Asset Finance, Patrick Jelly, they all remain committed to seeing Aldermore grow and develop its Diversity and Inclusion programme. Further to signing up in 2016, we established the Women in Finance Steering Committee and now also have a Diversity and Inclusion Group known as the Inclusion@network, which all meet regularly to discuss, update and inform against targets set out and policies that are required to be updated. The Women in Finance Steering Committee has also delved further into the policies we have in place to ensure that we make Aldermore an inclusive and supportive place to be. We have invested in seeing people succeed, regardless of their race, ethnicity, gender, sexual orientation or background and the work we are collectively doing is helping to support that. Mentoring Our IT department is leading the way in helping us to celebrate and promote talent within the organisation. Our Chief Information Officer, Rebecca Bunyan, is currently working on building stars for the future with our Women in the Workplace initiative. This network encourages women to come together to discuss and share experiences, common issues and understand how to overcome obstacles that can be a result of a gender imbalance in the workplace. From October this year Aldermore has signed to a cross organisational mentoring scheme, which is run by the Women Ahead group. This scheme is designed specifically to develop the careers of women via mentors (male and female) from other organisations. We will recruit ten mentors and have ten mentees taking part from Aldermore, which will be matched up with their respective mentees/ mentors via a process that aligns preferences, styles and expectations. 5

6 It s an exciting prospect for us to be taking part in this, so that we can both share experiences with others and further develop the talent within our organisation, continuing to support our gender aspirations. Developing talent Our training programmes continue to support achievements and success for all our colleagues. Over the past year we have enhanced and developed them to best meet the needs of the whole business including promoting why Diversity and Inclusion is important. We want to ensure that we have an engaged, skilled and knowledgeable workforce and our training and development programmes are designed to do just that. Since our 2017 report, we have seen over 25% of colleagues sign up and graduate from our training programmes and over 24% of those who took part went onto promotions since completing. Of the 25% that took part, we had 14% male and 10% female split, showcasing our level playing field for engagement. Targeting a whole host of individuals across the Bank, the Diversity and Inclusion group organised numerous events through Inclusion Week. We encouraged colleagues to open up discussions around diversity and inclusion within the Bank. Ideas from these conversations included wider unconscious bias training and a focus on leaders stories and experiences. With Diversity and Inclusion a top priority for the business we also extended our support to those who reflect our values. In early 2018 we partnered with Jamie Chadwick, the first female F3 driver in decades. Much like us as a business in the banking sector, Jamie has challenged the established view of racing and her determination and commitment to achieving success in her chosen field, reflects our passion internally for supporting both our colleagues and customers. Recruitment We have also revamped our recruitment process and we now have an enhanced team to seek diversified shortlists for all roles, not just for senior appointments. Jamie Chadwick British F3 Driver sponsored by Aldermore I ve worked with Aldermore for almost a year now and I ve been delighted with my decision to partner with them. There are many synergies between what I m trying to achieve and what Aldermore is aiming to do as a challenger bank. Its focus on diversity and inclusion is refreshing and its contemporary approach to female employees is great to see. Ensuring the success of women within any organisation, I believe, is paramount and I m living proof that you don t need to fit the norm to be successful. Congratulations to Aldermore on hitting their target early and I m sure they will go on to make their organisation an even greater place to work. 6

7 Gender pay gap As we did in 2017, we also wanted to take this opportunity to provide an update on our gender pay gap ahead of the April 2019 deadline. As of the 5th April 2018, our mean gender pay gap stood at 29.0% - which has improved slightly since the previous year. The mean number is the average number when you take all colleagues into account. Our gender pay gap is explained by the current representation of women in senior leadership roles within our business. We remain confident as a business that we do not have any processes or practices in place that see people conducting the same role, being paid differently to do so. We still have work to do, however, as we note that our mean pay gap is below the banking industry average of 35% according to PWC 1 but remains higher than the national average of 17.9% 2, according to the Office for National Statistics (ONS). Our gender distribution remains within four pay quartiles - highlighted in the graphs. Each quartile contains 227 employees based on salaries, correct as at the end of April Female representation continues to be positive in our quartiles one and two, although we continue to work on representation and the resulting gaps in the upper quartiles. Gender representation: Pay gap by Quartile Lower Quartile 40% 60% 1.1% 3 Quartile 3 59% 41% 2.5% 5 Quartile 2 49% 51% 4 3.3% Upper Quartile 77% 23% -0.9% 6 Male Female Hourly Pay Gap Gender Pay Gap Mean Gender Pay Gap Median 1. PWC Pay Gap Reporting focus on banking - services/human-resource-services/gender-pay/spotlight-on-banking.html 2. ONS - earningsandworkinghours/bulletins/genderpaygapintheuk/2018 3, 4, 5, 6. Mean pay gap number for each quartile 29.0% 35.5% 7

8 All of our permanent colleagues are entitled to bonuses, albeit discretionary and subject to company and individual performance. As at April 2018, 83% of our females and 82% of our males were rewarded a bonus within the performance year. As we move in line with our parent company s financial year, 1st July 30th June our pay and rewards timeline also reflects this. Colleagues will continue to be rewarded based on the performance rating received and offered as a percentage of the colleague s salary. Receiving a bonus 82% 83% We are aware that this year we have seen an increase in our bonus pay gap from 43.7% in 2017 to 55.3% in The past year has been a significant one at Aldermore which saw us become part of the FirstRand group. This process resulted in early vesting of many of the Bank s Long Term Incentive Plans (March 2018), which apply to our leaders and, which is the predominant reason for the disparity to 2017 given that males are currently a larger proportion of our senior leadership population. It is important to note that had the transaction not taken place, our bonus pay gap would be broadly in line with that reported last year. We know and understand the reasons why we see a gender pay gap within our organisation and are committed to reduce this differential year on year. 18% Received bonus Gender Bonus Gap Mean Bonus Pay Gap 17% Did not recieve bonus Gender Bonus Gap Median 55.3% 40.9% Conclusion We are pleased to be able to report that we have achieved our target, much earlier than expected, of 30% of females in senior roles. But we are not a business that rests on its laurels. We know there s still more that can be done to build and make Aldermore a more inclusive, supportive and diverse organisation. Our steering committees and internal networks are well established and have the right focus and attention placed on building policies that work for the future. We are striving to further increase our female representation and ultimately ensure our colleagues continue to be proud to work for us. We committed as part of the Treasury s Charter to reducing our pay gap year on year and we are pleased to see a slight reduction in our pay gap this year, although we note the increase across our bonus gap. We can be confident in our knowledge and reasoning why we see this increase and continue to work to increase our female representation, which we inevitably expect to see our pay gap decrease on a yearly basis. 8

9 Since joining Aldermore, I ve seen some significant steps taken across our Women in Finance initiatives, as well as across our Diversity and Inclusion ambitions and I m so proud of everything we have achieved so far. We have hit the target set ahead of the deadline, we have improved countless policies, seeing more of our employees able to work more flexibly than ever before, and we are building an organisation where our colleagues have the freedom to voice what they need to succeed and this is just the beginning. Our steering groups continue to plan engaging and insightful events, enhancing our proposals and policies where needed. It s been a fantastic journey and we are excited for the future. Christine Palmer, Chief Risk Officer 9

10 Contact Us For any questions or comments on this report please contact: Chelsey Palmer, Aldermore aldermore.co.uk 10