The gender pay gap: how do utilities measure up?

For the first time ever, thousands of companies and organisations around the UK revealed how much they pay their female employees in comparison to their male peers. How are utility companies doing? Tom Grimwood investigates.

Last week, thousands of companies and organisations around the UK revealed how much they pay their female employees in comparison to their male peers for the first time ever. Under new rules introduced in 2017, all employers with 250 or more workers were required to report gender pay gap data by midnight on Wednesday. Although more than 1,500 employers failed to submit the data in time, over 10,000 met the deadline.

According to the statistics, the median gap in hourly wages across all sectors was 9.7 per cent, meaning that in 2016/17 the typical female employee earned 90.3 pence for every pound which the typical male employee earned. On a mean basis, the figure was 14.5 per cent, or 85.5 pence on the pound.

In addition to receiving lower base salaries, female workers also received lower bonuses. The median gender bonus gap was 5.9 per cent, whilst the mean gender bonus gap was 15.1 per cent.

As an industry which is heavily reliant on the STEM subjects – science, technology, engineering and maths – and given past perceptions of these being boys’ subjects, it is hardly surprising that the pay gap for the electricity and gas sector was above average.

The median pay gap was 16.2 per cent, putting the sector in sixth place when ranked according to gender pay inequality. Construction came in first place, with a median pay gap of 24.8 per cent. When it came to the mean gender pay gap, the electricity and gas sector was around the middle of the rankings, reporting a slightly lower figure of 15.2 per cent. The median gender bonus gap was 23 per cent and the mean gender bonus gap was 27.6 per cent.

Retail and Services

Some of the biggest gaps were found among energy retail and services companies, most notably British Gas.

British Gas Services (Commercial) Limited was revealed to have one of the widest gulfs of any company in any sector. Its median pay gap stood at 44.1 per cent, meaning its typical female employee earned barely more than half of its typical male employee. The mean pay gap for the firm was at 34.8 per cent.

British Gas Services Limited also came off poorly, with figures of 37 per cent and 22 per cent respectively, although British Gas Trading Services did much better with figures of 8.5 per cent and -0.6 per cent.

Data was not reported for parent company Centrica, although a report published by the firm last year put the group wide figures at 30 per cent (median) and 12 per cent (mean). The company said the gap “is not driven by unequal pay but by the uneven distribution of men and women across the business and the type of roles they do”.

“Like other employers in our sector, we have a greater proportion of men in higher paid, traditionally male-dominated technical roles such as gas, central heating and electrical engineering, which form a significant portion of our workforce,” the document explains.

“By contrast, we have a larger number of women in lower paid, less technical roles such as customer service and administration.”

The report notes that the equal pay gap, which measures whether men and women are paid the same for performing similar roles or work of equal value, was much lower at just 1 per cent (median) and 2 per cent (mean).

Other companies with large gender pay gaps included Drax Group’s Haven Power at 30.4 per cent (median) and 27.4 per cent (mean) as well as Scottish Power’s retail division at 30.5 per cent (median) and 21.3 per cent (mean).

Pay-as-you-go supplier Utilitia had some of smallest gaps among retail and services companies, reporting figures of 2.6 per cent (median) and 7.5 per cent (mean) for Utilitia Energy Limited, and 0 per cent (median) and 3.1 per cent (mean) for Utilitia Telesales Limited.

Energy Networks

Many energy networks also reported substantial gender pay gaps, although none as large as in retail and services. The company with the biggest gaps by a clear margin was Scottish and Southern Electricity Networks’ transmission business, Scottish Hydro Electric Transmission PLC. The firm reported figures of 36.1 per cent (median) and 33.4 per cent (mean).

The numbers for the overall parent company, SSE, were much lower at 19.3 per cent (median) and 22 per cent (mean) and the firm says it has been working proactively to address the imbalance, for example, by changing its recruitment methods to encourage more female applicants and promoting flexible working hours.

SSE director of human resources, John Stewart, tells Utility Week: “In 2016 SSE became one of the first FTSE 100 companies to publish its gender pay gap, using the draft regulations available at the time. That exercise was both interesting and instructive and SSE now has two years of data to understand and act upon.

“Genuine transformation for SSE, and across the UK’s labour market, will require meaningful societal changes as well as improvements at organisational-level. SSE is committed to being a leader for driving change in both of these areas.”

The network companies with the lowest gender pay gaps included SGN and Wales and West Utilities. SGN reported figures of 6.6 per cent (median) and 4.2 per cent (mean) for Scotland Gas Networks Limited, and -1.3 per cent (median) and 0.7 per cent (mean) for Southern Gas Networks PLC. The numbers for Wales and West Utilities were -4 per cent (median) and 10 per cent (mean).

Wales and West Utilities people and engagement director Sarah Hopkins says this is partly explained by “a strong internal, people focussed culture,” “family friendly, flexible policies” and an “emphasis on colleague wellbeing”.

Hopkins says the company has widened access to employment opportunities by removing academic qualifications where they are unnecessary and launching initiatives to increase diversity.

“These include direct engagement with schools and colleagues to raise awareness of the careers we can offer, as well as social media advertising aimed specifically at girls, while highlighting the many positive female role models already in our company,” she adds.

Hopkins says the company is not resting on its laurels and is working hard to close the remaining gap in mean gender pay, which reflects “an industry that is historically male-dominated”.

Energy generation and wholesale

Among generation and wholesale trading companies, the largest gap was found at Horizon Nuclear Power, the company developing the proposed Wylfa Newydd nuclear power station in Anglesey. The firm reported a median pay gap of 43.9 per cent and a mean pay gap of 41.9 per cent. RWE Supply and Trading was not far behind, with a median pay gap of 35.4 per cent and a mean pay gap of 40.7 per cent.

A spokeswoman for Horizon tells Utility Week that, as with many other companies in the sector, the gap is the result of “having fewer women than men in our more senior roles”.

She says the company has taken multiple actions to raise the number of women in these roles such as launching a STEM ambassador programme and an educational outreach programme called Futures. “In fact, in the last few months alone, we have appointed two female directors to Horizon”, she adds.

To ensure this continues, Horizon intends to develop further programmes that “provide opportunities for growth and progression and, where necessary, intentionally focus on and encourage high-performing women to participate in such programmes.”

Danish renewables firm Orsted had some of the lowest gaps at -1.3 per cent (median) and 5.8 per cent (mean). UK managing director Matthew Wright says there is “still more to do if we are to close the gap down to zero, which is our ambition”.

“Gender diversity is a recognised industry challenge and we are taking steps to help find solutions,” he adds, citing Orsted’s involvement in initiatives such as Powerful Women and the Women into Manufacturing and Engineering scheme.

“We also have schemes focussed specifically on finding and developing our talented women; such as our new Spotlight programme,” explains Wright. “Our human resources policies are family friendly and designed to retain parents and carers and support them in having a work life balance that suits them, their family and the needs of the business.”

Water

The water supply, sewerage and waste sector performed far better than the electricity and gas sector, coming in below the national average with a median pay gap of 6.9 per cent and a mean pay gap of 5.5 per cent.

In the case of the latter, this was the lowest figure for any sector in the country, although on the first count the sector was nearer the middle of the rankings. The median gender bonus gap was 5 per cent and the mean gender bonus gap was 12 per cent.

With a median pay gap of 28.6 per cent and a mean pay gap of 24.8 per cent, Affinity Water was arguably the worst performing of the water companies. United Utilities PLC did have a significantly higher mean wage gap of 36.7 per cent, although its median figure was much lower at 16.7 per cent.

Affinity Water released only a brief comment in response to the statistics, stating the company is “working to understand in more detail the reasons behind our gender pay gap, so we can identify actions we need to take.”

The companies with the smallest gaps were the retailers Scottish Water Business Stream and Pennon Group’s Source for Business. They reported respective pay gaps of 1.9 per cent (median) and -1.2 per cent (mean) and -1.2 per cent (median) and 2.6 per cent (mean).

Commenting on Yorkshire Water’s figures of 4.7 per cent (median) and 4.8 per cent (mean), chief executive Richard Flint says that the company is not complacent, adding: “This reporting is just the first step in a series of measures that will help us to improve not just our gender balance, but the overall diversity of our whole workforce.”

Whilst these statistics may, by themselves, be a blunt tool for dissecting gender diversity among utilities, they do provide some valuable insight into how the industry is performing.

They demonstrate how the energy sector in particular has a long way to go to overcome its history of male dominance and address the lack of women in senior roles which is often evident at industry events.

“Gender pay gap reporting is a game changer in terms of workplace culture and practices,” says chief executive of the Fawcett Society. “It forces employers to look at themselves and understand their organisations and it prompts employees to ask some hard questions.”

Utilities now have a benchmark against which they can measure their progress.