fair pay: a broken contract?€¦ · communities’ johan lundgren ceo easyjet plc january 2018...

willistowerswatson.com

Fair pay: A broken contract?

GB Rewards Network

10 May 2018

Mario Yiannopoulos, easyJet

Daniel Puckey, Willis Towers Watson

Tamsin Sridhara, Willis Towers Watson

© 2018 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers

Watson and Willis Towers Watson client use only.


Our breakout session

© 2018 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only. 2

Talent diversity – closing the gap in practice

Easyjet insights from Mario Yiannopoulos

Equal pay

Market insights and common questions – Daniel Puckey

Equal pay – ensuring your pay structures are really fit for purpose

Easyjet case study with Mario Yiannopoulos, Head of Reward1

2

3


Common board and employee questions


Do we have equal pay?

Audit

Pay management

Pay infrastructure

Pay increases

Amendments

Assurance

The gender pay

journey at easyJet

… so far

We first reported on our

gender pay gap externally

over 3 years ago

REMCO

Nevertheless it’s fair to say our headline

numbers needed plenty of explaining – quickly

and carefully

Mean Median

Hourly rate of pay 51.7% 45.5%

Bonus pay 43.8% 32.2%

1Q 2Q 3Q 4Q

Men 31.1% 35.2% 62.6% 89.3%

Women 68.9% 64.8% 37.4% 10.7%

Employee distribution by quartile pay bands

Pay and bonus gap

We also had a significant external and

internal commitment from the new boss

‘Committed to equal pay

and equal opportunity’

‘Committed to

addressing a gender

imbalance in our pilot

and senior management

communities’

Johan Lundgren

CEO easyJet plcJanuary 2018

"At easyJet we are absolutely committed to

giving equal pay and equal opportunity for

women and men. I want that to apply to

everybody at easyJet and to show my

personal commitment I have asked the

Board to reduce my pay to match that of

Carolyn's when she was at easyJet

I also want to affirm my own commitment to

address the gender imbalance in our pilot

community which drives our overall gender pay

gap.

easyJet has already gone further than other

airlines in trying to attract more women into

a career as a pilot. I want us not just to

hit our target that 20% of our new pilots

should be female by 2020 but to go further

than this in the future.“

Addressing the gender pay gap for us starts with

building strong foundations (job evaluation) and

re-thinking our approach to talent mobility and

career progression (career pathways)


Questions?


?

?


Do we have equal pay?

Audit

Pay management

Pay infrastructure

Pay increases

Amendments

Assurance


How can you test for equal pay risks?Advice from the Equality and Human Rights Commission (EHRC)

© 2018 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.

https://www.equalityhumanrights.com/en/publication-download/equal-pay-statutory-code-practice

11

Deciding the

scope

1STEP

Determining

where men

and women

are doing

equal work

2STEP

Collecting

pay data

3STEP

Identifying

causes of

gender pay

differences

4STEP

Developing

an action

plan

5STEP


How do you understand your key areas of equal pay risk?

© 2018 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.

Example equal pay gap reporting analysis Example absolute pay risk reporting analysis

< +/- 5% difference between M/F pay

5 - 10% difference between M/F pay

> +/- 10% + difference between M/F pay

Business Unit 1 Business Unit 2

LevelD

epart

ment 1

Depart

ment 2

Depart

ment 3

Depart

ment 1

Depart

ment 2

Depart

ment3

1 4%

2 -5%

3 -4% 5%

4 -3% 19%

5 -4%

6 2%

7 -7% 1% -3% -6%

8 -6% 2% 3% -17%

9 -15% -2% -6% -12%

‘Traffic light’ heat map

represents degree of

gender pay difference and

risk, using agreed criteria

12

Absolute pay risk:

Considering the highest and lowest paid men and women (as

any woman can compare their pay to any man)

ILLUSTRATIVE


The next step is to look at factors that could account for any differences

Job Architecture (to group jobs requiring

similar skills)

Job Levels or Grades to group jobs within

similar scope and levels of responsibility

and accountability (not market pay)

If applicable, jobs which require different

degrees of physical or sensory effort

Performance ratings

Market

Geographic location

Experience/years of service

Education

Promotion history


Job data to establish comparabilityIncumbent and job data that may

impact pay differences

Reward processes that may impact

systemic pay differences

Talent Management

Recruitment profile and pay

Promotion profile and pay

Succession planning

Performance Management

Ratings allocation

Base pay increases

Regular Bonus payments

Ad hoc bonuses

Other processes

Overtime allocation

Training and project opportunities

…


For larger organisations can run a multi-regression analysis


The multi regression

approach predicts a pay level

for each individual based on

their own combination of

factors unique to that

employee and job. If

employees identified in the

core analysis as an equal

pay risk are identified here

as far from their predicted

pay then pay adjustments

should be focused here

Country GenderActual Avg.

Base Salary

Predicted Base Salary*

Actual Avg. Base Salary is:Average Predicted Range (min-max)

Country AMale $45,000 $44,881 $44,226 $45,545 Within predicted range

Female $36,167 $36,260 $35,563 $36,970 Within predicted range

Country BMale $58,315 $56,297 $54,965 $57,054 Above predicted range

Female $47,240 $47,111 $45,851 $48,405 Within predicted range

EEID Position Title Gender Year in PositionLength of

Service

Actual Base

Salary

Predicted Base

Salary

% Deviation from

Predicted Base

Salary

1359 Sr. Accountant Male 6 10 $82,000 $78,175 105%

1360 Sr. Accountant Female 2 2 $72,000 $75,025 96%

Illustrative analytics by country

Illustrative analytics by employee


How do you balance business needs to recruit with requirement to comply with equal pay?


…If you have no job evaluation system?

…if you only rely on market pay/employee pay in last job to set starting salaries?

…If you have broad ranges?

…If you have performance related base pay increases?

…If you have strong job architecture – but wide ranges?

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fair pay: a broken contract?€¦ · communities’ johan lundgren ceo easyjet plc january 2018...

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