Gender Pay Gap
Introduction
The SMS Group welcomes and supports gender pay gap reporting (introduced to increase pay transparency) and is committed to equal opportunities and diversity and inclusion throughout the business.
All companies with 250 or more employees are required to publish their gender pay gap under legislation that came into force from 5 April 2017. Employers must publish the gap in pay between men and women on both a median basis (pay per hour based on the person ‘in the middle’ of the distribution of pay) and a mean basis (average hourly pay). In addition, employers are required to disclose the distribution of gender by pay quartile – in other words splitting the workforce into four groups based on their pay and showing the proportion of men and women in each group. Employers are also required to disclose percentages of staff receiving bonuses by gender and the gender gap on bonuses.
Smart Metering Systems Ltd (‘SMS’) and its wider corporate group, operate within both the domestic and industrial & commercial, gas and electricity markets. Within SMS corporate group, CH4 Gas Utility and Maintenance Services Limited (‘CH4’) and SMS Energy Services are the only two companies which fall within the remit of the Regulations and therefore require statutory disclosure. Our gender pay analysis for both companies are included within this document. We have also voluntarily elected to provide a consolidated gender pay gap analysis for the entire SMS group. In addition, the figures for the previous year (2022) are referenced for comparison purposes.
Providing a complete energy service, SMS (including its subsidiaries) funds, installs, operates, and manages smart meters and carbon reduction (“CaRe”) assets, including electric vehicle chargers and battery storage systems, which together facilitate a smarter, greener, and more flexible energy system. Accordingly, a vast number of our employees are gas and electric engineers (and male).
The SMS Group has also included a ‘Taking Action’ section, setting out the actions we have and will take, to address the gender pay gap set out in this Report.
Positive Action taken in 2023 includes:
- The promotion of 5 female employees into senior positions internally which include Contact Centre Team Leader, MEM Manager, Asset & Commercial Director, Reverse Asset Coordinator and Head of Product – Smart Home Services;
- The external appointment of 7 females into management positions which include Senior Commercial Finance Manager, Contact Centre Operations Manager, Head of Energy Operations, Delivery Project Manager, Head of Operational Planning and Forecasting, Senior HR Business Partner and QA Manager;
- We re-launched our EDI monitoring form with a video from our CEO explaining the benefits of completing it and also created a fun animated video of why it is important. We also donated £1 to MIND (mental health charity) for every completed form. Since launching the video, the completion rate has increased by 27%;
- Our Wellbeing Policy and Equal Opportunities, Diversity and Inclusion policies were updated to ensure they are reflective of our current workforce and the needs of our employees;
- We launched a Menopause Policy detailing symptoms and support available for employees, along with guidance for line managers in how best to support their employees;
- We are working towards being menopause accredited and have already launched several initiatives including emergency packs in brown paper bags at all Receptions. Feedback has been received via our Menopause Employee support group (via ‘Teams’) and is very supportive of the thought and tact taken;
- Launched an enhanced paternity pay package for employees in addition to our enhanced maternity/adoption package, paid time off for fertility treatment and the sad event of miscarriage;
- Proud to be Disability Confident Leader (level 3). In continuing our Disability Confident journey over the past three years and working through levels one to three, we are ensuring that disabled people can fulfil their potential/realise their aspirations. This is a continued focus for us in 2024;
- We proudly ‘celebrated our differences’ (one of our behaviours underpinning our core SMS value ‘Pride’), again with Pride Month 2023 in June. To celebrate our differences for Pride this year, we had a range of activities and resources in store for colleagues to get involved in, including how to be an LGBTQ+ ally, sharing the importance of completing the SMS EDI monitoring form and access to Pride educational resources. Our breakout areas were awash with rainbow pride flags;
- On our continued journey to be a diverse and inclusive employer, we enabled 162 employees to attend a 3-hour training session on ‘Diversity & Inclusion – positive behaviour’, delivered by an external employment law specialist being both informative and engaging. This was an opportunity to share best practice in the way we treat others;
- Neurodiversity has always been with us, but it is only in recent years we have started to really understand and celebrate it. We celebrated ‘Neurodiversity Awareness Week’ by signposting employees to external resources and an SMS managers toolkit, which holds a wealth of information on different neurodiverse conditions, their strengths, and their challenges, and how you can support colleagues who are neurodivergent. 2024 will see the launch of a Neurodiversity Employee Resource Group;
- We celebrated International Woman’s Day (IWD), a day to celebrate, showcase, and recognise the achievements of women, and also to bring attention to the everyday issues facing females, including gender inequality in the workplace.
Our efforts related to this issue are particularly significant given that within the energy and engineering industries where we operate, gender balance continues to be heavily weighted towards men. This is a dynamic we are determined to help change; - Additionally we supported International Women in Engineering Day (INWED) – an event run every year by the Women’s Engineering Society (of which we are a proud member) that recognises the achievements of women in an industry that continues to be male dominated. To help raise awareness and celebrate this initiative, we profiled two of our engineers, (Dual Fuel Engineer) and (Test Engineer) through two short videos. And in the spirit of International Women’s Day, as well as raising awareness of the challenges, we celebrated two of our female leaders at SMS, (Chief Financial Officer) and (Head of Sustainability) on our LinkedIn page;
- We continue to be proud signatories of the Race at Work Charter, Women in Engineering (WES) and ENEI. Our work continues during 2024 in working with these Companies closely to continue to improve the diversity of our workforce;
- Partnered with Tech Talent Charter and MotherBoard to improve the gender equality within SMS, whilst also focusing on support for new parents and parents returning to work after a long period of family leave;
- Signed up to Bump2Baby & Beyond which gives our employees access to support and resources to help them during many aspects of life. Bump2Baby offer lunch and learns on many topics including Pregnancy and infant loss, Infertility, Menopause/midlife/empty nest, Parenting, Antenatal, Postnatal, Preparing for parental leave and Preparing to return from parental leave along with tailored advice to employees should they have a specific query or need support.
Reporting Requirements
There are 6 reporting requirements that require to be published;
- Mean gender pay gap in hourly pay
- Median gender pay gap in hourly pay
- Mean bonus gender pay gap
- Median bonus gender pay gap
- Proportion of males and females receiving a bonus payment and
- Proportion of males and females in each pay quartile
Why Equal Pay and the Gender Pay Gap are not the same
Equal pay
Equal pay is when men and women are paid the same for like work.
UK law has, since the 1970s, prohibited paying different amounts to men and women who are doing ‘like work’, ‘work of equal value’ or ‘work rates as equivalent’ unless there is a ‘genuine material factor’ for the difference.
The Gender Pay Gap
The gender pay gap is the difference between the hourly rate of pay of male employees and female employees (as set out in the regulations), expressed as a percentage of the hourly pay rate of the male employees. The gender pay gap is reported on both a mean (average) and median (mid-point on a distribution) basis.
Gender pay gap is a collective figure which does not compare individuals or groups in comparable jobs and most employers will find that they do have a gender pay gap.
Mean vs. Median
The Gender Pay Gap reporting regulations specifically require both the median and mean to be reported. These metrics are complementary and illustrate different aspects of the distribution of pay across an organisation. The median is a statistic commonly used in analysing both internal pay tendency and external market norms, because it looks at the central tendency of the market or sample, showing the middle-most salary of a sample. Calculating the median involves taking all salaries in a sample, lining them up in order from lowest to highest, and picking the middle-most salary. The mean is the overall average of the whole sample and thus can be subject to the influences of any extremely high or low salaries at the top or bottom of the sample. In other words, the mean is much more subject to skewing by a small number of outliers.
National Average
From the Office of National Statistics (ONS) in 2023, the gap among full-time employees decreased to 7.7%, from 8.3% in 2022. This is still below the gap of 9.0% before the coronavirus pandemic in 2019. Estimates for 2020 and 2021 are subject to more uncertainty than usual, therefore it is recommended to look at the longer-term trend. Among all employees, the gender pay gap decreased to 14.3% in 2023, from 14.4% in 2022, and is still below the levels seen in 2019 (17.4%). This is for all organisations and therefore not a like for like comparison. Additionally, there should be more focus on long-term trends rather than year-on-year changes.
Nationally, one of the main reasons for the gender pay gap is more men are likely to hold senior positions. Other factors can include, however are not limited to;
- Occupational segregation – the distribution of men and women employed in different sectors or at different levels in the labour market;
- Women are more likely to work part-time, which can mean a lower rate of pay;
- Women are under-represented in senior roles;
- More women work in lower paid jobs/sectors;
- Industry sectors may vary and have their own nuisances (including SMS with a vast number of roles being engineers and the majority of these being held by males).
Specifically, within the SMS group there are;
- more men than women within the engineering industry, from which we source most of our employees;
- more men than women in senior roles;
- more women in part-time roles;
- more women in lower paying roles.
Most of these issues are however prevalent throughout the UK and on a wider global level,
therefore are not unique to SMS. As can be seen via ‘Engineering UK’ (published online via Women’s
Engineering Society) who provide workforce statistics, in May 2024:
- The number of women working in engineering and tech has dropped by 38,000 – from 16.5% of the 2022 workforce to 15.7% of the 2023 workforce;
- The fall in women in engineering and tech workforce is driven by a fall of 66,000 between the ages of 35 to 64, indicating that women are not being retained.
Equality, Diversity & Inclusion
SMS supports and encourages a culture of gender diversity amongst its workforce. It is through the contribution of ‘Our People’ from of all backgrounds that ensures our business is successful, as only a diverse and engaged workforce will produce the solutions we need to tackle the varying challenges faced by our business, and industry leading thinking will diversify and transition the energy market.
We are prioritising the following areas for action: utilising tools including the new SMS pay and reward framework, Disability Confident Leader status, and EDI monitoring form, to ensure there is no bias towards either gender from the point of recruitment, through to salary conversations and progression opportunities, and we continue to actively promote gender balance within the SMS Group.
We are continuing to explore how we can continue to attract women into our organisation to create a more even gender balance, specifically in our engineering workforce. As an equal opportunities’ employer, we firmly believe in appointing the best candidate into the role, regardless of their gender, or 8 other protected characteristics, as specified by the Equality Act.