PPF reveals 23% ethnicity pay gap

It is the first time the PPF has included ethnicity alongside gender in its pay gap report, making the lifeboat fund one of the first organisations in the pensions industry to do so.

The figures show the differences between the media hourly earnings of white and black, Asian and minority ethnic staff at the PPF, and is arrived at from a study of the 84.4 per cent of employees who disclosed their ethnicity when asked. They also highlight a mean bonus pay difference of 18 per cent.

The PPF’s pay gap report shows that 76 per cent of white staff receive bonus pay, while 57 per cent of Bame staff are eligible. 

Progress towards closing the gender pay gap was reversed, with 2020 seeing a median gap of 15.7 per cent and a mean gap of 25 per cent.

The median figure had previously declined from 20.4 per cent in 2017 to 13.39 per cent in 2019, and the mean figure from 24.97 per cent to 22.55 per cent over the same period. 

“We’re deeply unsatisfied with this; the gap had been closing year on year so it’s disappointing to see the gap widen again, even by a relatively small amount,” the report stated.

However, marginally more women than men are eligible for bonus pay, that split being 74 per cent to 71 per cent in their favour.

Pay gap reports have long been criticised on a number of grounds, not least because they tend to compare the salaries of groups without regard for the type of jobs those groups gravitate towards.

Nor do they factor in time off, a problem especially prevalent in gender pay gap statistics, which seldom account for the career impact of maternity leave.

Critics point out that comparing people with like jobs and similar levels of experience dramatically reduces, and in some cases eliminates, the so-called pay gap entirely. What these statistics in fact describe is an earnings gap.

The report attributes the gender pay gap to a higher concentration of men in higher-paying positions such as investments, risk and IT, and too few women in senior positions.

The PPF stated that it aims to have 45 per cent female representation in senior management positions by 2023.

In relation to its ethnicity pay gap, the PPF figures show that disparate representation is similarly more acute higher up the organisation. The split between white and Bame workers in upper employment levels is 78 per cent to 22 per cent.

The report states that the PPF has set two targets to redress this: first by increasing Bame representation across the organisation to 30 per cent by December 2023, over and above the national figure of 13.8 per cent.

This would amount to a 5.7 per cent increase over the current figure of 24.3 per cent, and would include black representation specifically increasing from 6.7 per cent to 9 per cent, three times the national figure of 3 per cent.

The second target would see Bame representation within senior management roles increased to 25 per cent by December 2023, with black representation specifically rising from 1.5 per cent to 4.4 per cent, for an overall increase of 8.8 per cent from the current 16.2 per cent figure.

Katherine Easter, PPF’s chief people officer, said: “Building an inclusive, representative organisation is very important to us. We recognise that we need to make improvements to ensure we attract and retain the widest, most diverse talent pool possible. We’re committed to doing this through monitoring and measuring our progress against set targets.

“Our ethnicity report highlights that there is clearly a problem we need to fix. In a step towards addressing this, we’ve set targets for ethnicity representation that ensure we hold ourselves accountable to improving race equality, particularly in senior level roles.”

In relation to the gender gap, Easter continued: “We’re disappointed that our gender pay gap has widened slightly this year, but this was something we expected would happen in the short term as we recruited more women into junior roles, so we could build on our female talent pipeline.

“While we’re pleased with our progress on increasing female representation at senior levels, gender imbalance remains and this is reflected in male-dominated functions such as investment, risk and IT.”