UK Gender PaY GaP RePoRT March 2018
A message from ELisabeTH PRcHLa CounTRY SPeakeR, MeRck UK I m proud to lead the diverse and dynamic Merck UK team. From Irvine to Feltham, Stirling to Southampton, Cambridge to Poole, our people are our strength. Whilst we do many different jobs, our common culture fosters co-operation and creativity, which drives vibrant innovation. We employ over 1,500 colleagues across 8 legal entities, covering a diverse business portfolio and whilst we are only required to report on two areas of our business, we have used this opportunity to extend gender pay transparency across our whole UK Group. We welcome this openness and the conversations it will naturally trigger, both internally and externally. Despite respecting and paying those in the same roles equally, overall in the total UK business, we still have many more men in high paid, senior roles and more women in lower paid positions. When we look at the different levels across our business just under two thirds of more junior employees are women and at the upper levels the reverse is true, with the majority of senior roles held by men. We are not alone in this. Our gender pay gap reflects the challenges in science, engineering and technology sectors, and in society more widely. Across the UK, the gap we have is linked to a range of factors; there isn t a single or simple explanation for it. But we will not shy away from asking the questions we need to understand and the actions we can take to address the gender pay balance within our business. We are committed to closing the gender pay gap over time. Our ongoing efforts will include programmes aimed at celebrating the value of our diversity, identifying any specific barriers, supporting those seeking new skills and progression and ensuring we continue to offer equal opportunities for everyone at Merck UK. Yours sincerely, Elisabeth Prchla 2
Background WHaT is THe GendeR PaY GaP? The gender pay gap is a measure of the difference in the average pay of men and women - regardless of the nature of their work - across an entire organisation, business sector, industry or the economy as a whole. Having a gender pay gap is not the same as unequal pay. Gender pay gap An equal pay measure, would involve direct comparison of two people or groups of people carrying out the same, similar or equivalent work. Pay discrimination for men or women in equal roles has been illegal since the Equal Pay Act of 1970. = Equal pay 3
How is THe GendeR PaY GaP calculated? Mean vs Median There are two different ways we have to calculate the difference in the average hourly pay between men and women the mean and the median. The mean is all the different rates of women s hourly pay, added up and divided by the total number of women. This is then compared against the same calculation with hourly men s pay. The median is the middle number of all the different hourly rates of pay for women at Merck arranged in value order from lowest to highest. This is compared against the same median hourly rate of pay of all the men at Merck. Calculating the mean average + + + Comparing median averages 4 We recognise that gender is not limited to a binary division between male or female. However, for the purposes of this report, the gender pay gap is calculated using the approach required by the Government regulations, which compare the pay of males and females. 4
Understanding the Merck UK Group pay gap In the UK, Merck employs over 1,500 employees across 8 legal entities. Our business portfolio is diverse, covering healthcare, life science and performance materials. Operating out of 14 sites across the UK, our employees are engaged in a broad range of roles science, technology, professional, distribution and commercial. 28% 24% We have a good gender balance across the business portfolio with 52% of our team female and 34.5% of our senior management roles held by women. are 52% of our UK workforce. One third (34.5%) of our senior managers are female. Mean gender pay gap Median gender pay gap However, we have more men in the most senior of roles in UK. These roles attract the higher salaries and bonus potential, creating the pay and bonus gap. Bonus is typically a proportion of a salary, which means having more men on higher salaries creates an even higher bonus pay gap. 74% 69% Median: For those who get a bonus, women on average earn 37% less than men. Mean: For those who get a bonus, women on average earn 48% less than men. 74% of men and 69% of women at Merck received bonuses in the year ending April 2017. 5
EaRninGs by GendeR across THe MeRck UK GRouP Pay quartiles (see graphic) are calculated by listing the rates of pay for each employee across the business from lowest to highest, before splitting that list into four equal-sized groups and calculating the percentage of males and females in each. 39% Highest paid 61% Age, education, training, length of service and the life and career choices made, all play a part in explaining these differences. 51% 49% We always seek to hire the best person for the job, regardless of gender. However, our gender pay gap figures highlight that we need to understand and talk openly about why we don t have 50:50 representation at all levels in our business. In particular, we need to do more to encourage women to progress into more senior, higher paid roles. 59% 41% Just under two thirds of our junior employees are women. Whereas at the upper levels we see the reverse, with around a third of our senior managers being women and the majority of senior roles held by men. 64% Lowest paid 36% Proportion of men/women in the quartile pay bands across all Merck UK entities 6
Statutory disclosure sigma aldrich co. LTd. Part of the Merck UK family, Sigma Aldrich provide scientists and engineers with best-in-class lab materials, technologies and services. Our aim is to solve the toughest problems in life science by collaborating with the global scientific community and, through that, we aim to accelerate access to better health for people everywhere. We employ 537 people across 5 sites and 50% of our employees are women. Although at 12% our median gender pay gap is smaller than the Merck UK-wide average of 24%, we remain highly committed to working with our UK Merck Group colleagues to collectively take action to reduce the gap further. 17% Difference in mean pay 12% Difference in median pay 39% 35% 21% Proportion of men/women receiving bonus pay in the relevant period 47% 49% Difference in mean bonus pay: 35% 37% Difference in median bonus pay: 43% Lowest paid Highest paid 61% 53% 51% 63% Mark Jackson Managing Director Number of men/women hourly pay in the quartile pay bands 7
Statutory disclosure BioReLiance Part of the Merck UK family, BioReliance provides contract testing and manufacturing services to pharmaceutical and biopharmaceutical companies that span the product cycle from early pre-clinical development to licensed production. Our goal is to advance the development and delivery of healthcare products by providing the highest quality testing, development and manufacturing services in partnership with clients worldwide. In the UK we employ 360 people, where 60% of our team are women. At 16%, our median gender pay gap is better than the Merck UK average, but that makes us no less determined to address it. We are working with our UK Merck Group colleagues to collectively take action to close this gap. 24% Difference in mean pay 16% Difference in median pay 33% Lowest paid 93% 88% Proportion of men/women receiving bonus pay in the relevant period 30% 62% 38% 43% Difference in mean bonus pay: 13% Difference in median bonus pay: 15% Highest paid 57% 67% 70% David McClelland Managing Director Number of men/women hourly pay in the quartile pay bands 8
AchievinG a sustainable GendeR BaLance We value diversity within Merck and we commit to deliver initiatives which enable better progression and promote a sustainable gender balance across the organisation. 1. Equal Access 2. Raising Awareness 3. Supportive Culture 4. Building skills Providing equal access to career opportunities: Targeted recruitment campaigns to attract more female applicants into senior roles Continue to encourage strong track record of internal promotions through our talent forums Further develop our gender neutral approach to talent acquisition and management Increasing awareness of the benefits of inclusion and diversity: Inclusion awareness and unconscious bias learning initiatives for line managers Developing a deeper understanding of the organisational and cultural barriers to progression and sharing these openly with our teams Encouraging a culture which supports individuals in reaching their full potential: @Merck building a local network and community for our female workforce to access UK gender champions Renewed focus on our carer friendly and flexible working policies and practices Developing the skills and behaviours to progress: Being Authentic and Inclusive a learning programme which embraces the power of diversity Investing in leaders of tomorrow through increased collaboration with education establishments, to encourage girls into STEM careers 9