Gender and Ethnicity Pay Gap Reports 2023
In this report we set out the pay gap data for both Gender and Ethnicity, using a snapshot date of 5 April 2023. Pay gap analysis looks at the difference in average pay between different colleague groups and helps to give insight into areas of imbalance within our organisation.
Whilst publishing our Gender Pay Gap is mandatory, we are voluntarily publishing our Ethnicity Pay Gap for the second year as this aligns to our organisational commitments to increase the representation of women and colleagues from ethnic minority groups and our belief that transparency helps drive progress.
Inclusion is an integral part of our purpose as a business – making it easy to save and invest for a better future. We believe that saving and investing for a better future should be accessible to all, no matter what their background, circumstances or knowledge and we seek to make this possible.
We embrace and celebrate the value of diversity across colleagues and clients. In 2021 we set targets to increase the representation of women, ethnic minority and Black colleagues by 2026. Whilst we are proud of the progress we have made, we recognise there is still more work to do.
Within this report we share positive progress in narrowing our Gender Bonus Pay Gap, but that our Gender Pay Gap has widened: we go into more detail on this later in this report. Our overall Ethnicity Pay Gap has narrowed and we have, for the first time, disaggregated our ethnicity data to get insight into pay gaps for colleagues from different ethnic groups. The biggest challenge we continue to face is around representation, with more men and White colleagues in higher paying and more senior roles. We have clear actions in place to help us address the areas where we need to do more and are committed to making progress as a strategic priority.
Our Inclusion and Diversity strategy priority objectives are to:
- deliver on agreed I&D representation targets
- broaden workforce data and insight to enable a data-driven approach
- intensify our focus on inclusion as a core expectation of life at HL
For my part, I will continue to lead our approach as the Executive Leadership Team member responsible for our People Strategy.
I can confirm that the data reported on these pages is correct.
CLAIRE CHAPMAN, Chief People Officer
What’s the difference between equal pay and pay gaps?
Equal Pay
Equal pay is the right for men and women to be paid the same for the same, or equivalent, work or work of equal value. HL has a clear, fair, and bias-free approach to pay and we operate on an equal pay basis across HL. We have checks in place as part of our annual performance and pay review process to ensure colleagues are paid equitably based on their role, skills and experience.
Gender Pay Gap
The gender pay gap measures the difference between men and women's earnings across the business by expressing the percentage difference between men and women's average hourly pay.
For example, if the average man’s pay was £20 per hour and average woman’s pay was £17 per hour, women would earn 85% of the amount men earn, giving a mean gender pay gap of 15%.
The median is the figure that falls in the middle of a range when the pay of all relevant employees are lined up from lowest to highest. The median gap is calculated by taking the difference between the employee in the middle of the range of male pay and the middle employee in the range of female pay.
HL’s Gender Pay Gap
All data provided is as of the 5 April of the years listed within the table.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Mean Gender Pay Gap | 13.7% | 12.9% | 17.6% | 4.9% | 7.8% | 9.3% |
| Median Gender Pay Gap | 20.4% | 19.9% | 19.1% | 15.7% | 13.7% | 19.1% |
| Mean Gender Bonus Gap | 70.6% | 73.0% | 62.8% | 64.0% | 51.7% | 28.6% |
| Median Gender Bonus Gap | 56.1% | 49.5% | 45.1% | 43.7% | 32.6% | 17.8% |
| Proportion of Employees in receipt of Bonus - Women | 51.6% | 68.6% | 72.2% | 66.1% | 65.8% | 84% |
| Proportion of Employees in receipt of Bonus - Men | 59.6% | 71.9% | 76.8% | 72.5% | 73.1% | 83.9% |
HL’s gender proportion (%) by pay quartile
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Lower Quartile - Men | 56% | 57% | 55% | 53% | 51% | 54% |
| Lower Quartile - Women | 44% | 43% | 45% | 47% | 49% | 46% |
| Lower Middle Quartile - Men | 60% | 60% | 63% | 61% | 58% | 52% |
| Lower Middle Quartile - Women | 40% | 40% | 37% | 39% | 42% | 48% |
| Upper Middle Quartile - Men | 72% | 70% | 66% | 61% | 58% | 61% |
| Upper Middle Quartile - Women | 28% | 30% | 34% | 39% | 42% | 39% |
| Upper Quartile - Men | 79% | 81% | 81% | 76% | 71% | 70% |
| Upper Quartile - Women | 21% | 19% | 19% | 24% | 29% | 30% |
What the data is telling us
Our mean and median GPG has increased this year, with the mean moving from 7.8% in 2022 to 9.3% in 2023 and median moving from 13.7% to 19.1%.
We have reduced our mean Bonus Gap and median Bonus Gap year-on-year with the mean reducing from 51.7% in 2022 to 28.6% and the median bonus gap reducing from 32.6% in 2022 to 17.8%.
Factors impacting our Gender Pay Gap:
- The increase in gender pay gap between 2022 and 2023 is primarily due to high levels of recruitment, predominantly of men, into roles commanding a market premium.
- Similarly, although overall representation has improved in senior roles, within this population, there are a greater proportion of men in roles commanding higher salaries as they are in larger roles or roles commanding a greater market premium.
Factors impacting our Gender Bonus Gap:
- Since the 2022 pay gap data we have provided two breathing space payments which has impacted the bonus gap as it has evened out the proportion of women vs men receiving a bonus.
- We have incentive schemes within our Advisory and Fund Management business areas which typically pay a higher bonus than those on the standard HL scheme. The participants within these areas are predominately male.
HL’s Ethnicity Pay Gap
This is the second year we have produced an Ethnicity Pay Gap report and the first in which we have chosen to disaggregate the data in order to get richer insight into the barriers faced by different ethnic groups. Although it is not mandated by the government, we recognise that more granular data will provide key insights that will feed back into our DEI strategies and targets.
All data provided is as of the 5 April of the years listed within the table.
| Snapshot date | Mean EPG | Median EPG | Mean Ethnicity Bonus Gap | Median Ethnicity Bonus Gap |
|---|---|---|---|---|
| April 2023 | 12.2% | 20.3% | 57.4% | 41% |
| April 2022 | 19.6% | 21.2% | 67.6% | 43.2% |
5 April 2023: Ethnicity Pay Gaps in comparison to White colleagues’ pay
| Pay Gap | Bonus Pay Gap | |||
|---|---|---|---|---|
| Mean | Median | Mean | Median | |
| Black, Asian and Mixed/Other Ethnicities (combined) | 12.2% | 20.3% | 57.4% | 41% |
| Black | 32% | 28.5% | 68.6% | 48.7% |
| Asian | -4.1% | 13.7% | 59.8% | 40.9% |
| *Mixed/Other Ethnicities | 21.5% | 21.1% | 33.9% | 32.2% |
| Ethnicity not disclosed | -17.4% | 19.4% | 30% | 38.1% |
Proportion of colleagues receiving a bonus
| 2022 | 2023 | |
|---|---|---|
| White | 62.7% | 86.2% |
| Asian | 50.0% | 82.2% |
| Black | 35.0% | 69.1% |
| *Mixed/Other Ethnicities | 45.3% | 80.0% |
| Not Disclosed | 36.8% | 75.4% |
| Black, Asian and Mixed/Other Ethnicities (combined) | 45.3% | 78.5% |
* Due to the total number of colleagues who have disclosed as ‘Mixed’ or ‘Other’ being too low to report on each category separately, we have chosen to combine the colleagues rather than to exclude the data completely.
HL’s Ethnicity proportion by pay quartile
| White | Ethnic Minority | Not Disclosed | ||||
|---|---|---|---|---|---|---|
| 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | |
| Lower Quartile | 62.2% | 62.8% | 15.1% | 16.1% | 22.7% | 21.1% |
| Lower Middle Quartile | 79.6% | 77.5% | 9.7% | 11.7% | 33.5% | 10.8% |
| Upper Middle Quartile | 85.3% | 83.5% | 7.2% | 8.3% | 40.8% | 8.2% |
| Upper Quartile | 82.3% | 78.8% | 5.8% | 7.6% | 52.8% | 13.6% |
What the data is telling us
The overall mean Ethnicity Pay Gap for 2023 is 12.2% which is a decrease of 7.4% from last year. The median is 20.3% which is a slight decrease of 0.9% from 2022. The overall Ethnicity Bonus Gap is 57.4% mean with a median of 41%.
Whilst the mean pay gap between White and Asian colleagues is –4.1% in favour of Asian colleagues, the median pay gap is 13.7% in favour of White colleagues. This shows that the mean is influenced by a few high paid Asian colleagues.
In reviewing the individual categories for Black, Asian and Mixed/Other colleagues the most notable mean gaps are of Black colleagues. This is driven by low representation of Black colleagues at higher paying and senior roles. Black colleagues also have lower mean and median bonus gap compared to other ethnicity categories.
Within HL, 13% of colleagues have not disclosed their ethnicity in our HR system. We have chosen to report the non-disclosed pay gaps separately, in line with government guidance and to reinforce our commitment to reducing the non-disclosed figures.
Factors impacting our Ethnicity Pay Gap:
- While we have increased ethnic minority representation across all role levels, including senior role levels, representation is concentrated towards more junior roles.
- Low representation of Black colleagues at higher role levels shows that Black colleagues have the largest mean and median pay gaps.
- We generally have a higher proportion of ethnic minority colleagues in premium salary ranges versus White colleagues, however this is as a proportion of a smaller quantity of colleagues.
Factors impacting our Ethnicity Bonus Gap:
- We have incentive schemes within our Advisory and Fund Management business areas which typically pay a higher bonus than those on the standard HL scheme. The participants within these areas are predominately White.
- While the percentage of colleagues receiving a bonus has increased in 2023 compared to 2022, the increase is lower for Black, Asian and other ethnicities in comparison to White colleagues.
What have we done to close the pay gaps in 2023?
Our first Gender Pay Gap Action Plan was put in place in 2018 and focused on initiatives that sought to reduce bias from pay processes, remove barriers to progression for women and attract more female talent. We started reporting our Ethnicity Pay Gaps from our 2022 snapshot data which has supported our focused efforts to improve both female and ethnic minority representation in our senior and pipeline populations.
Equal Pay
Equal pay is the right for men and women to be paid the same for the same, or equivalent, work or work of equal value. HL has a clear, fair, and bias-free approach to pay and we operate on an equal pay basis across HL. We have checks in place as part of our annual performance and pay review process to ensure colleagues are paid equitably based on their role, skills and experience.
Our Inclusion and Diversity Strategy
Our current Inclusion and Diversity strategy has 3 priority areas of focus:
- Deliver on agreed DEI representation targets.
- Broaden workforce data and insight to enable a data-driven approach.
- Intensify our focus on inclusion as a core expectation of life at HL.
A review of progress against our female representation targets has found that:
- We are currently on track to achieve our 2026 senior female representation target.
- We need to increase our focus on our ELT -1 population, where the proportion of women has decreased over time.
- We are not currently on track to meet our agreed female pipeline target and need to increase our focus at this level. A key driver of this is increased low female representation in the technology area of our business, which has the highest hiring volumes.
A review of progress against our ethnicity representation targets has found that:
- We have made positive progress in our efforts to increase the ethnic diversity of our workforce and are on track to achieve our 2026 representation targets.
- Whilst we have seen positive movement in Black representation over time, the pace of change is slow.
A review of our progress and participation in external benchmarking and best practice:
- Since 2019 we have sponsored and put HL colleagues forward for the Stepping Up leadership programme run by Bristol City Council. This is a programme which looks to change the landscape of future leaders and has had a focus on underrepresented communities.
- In 2020 we launched our Strive Internship Programme in partnership with Bristol City Council, University of the West of England (UWE) and the Bristol Mayor’s office, which creates paid internship opportunities for students from ethnic minority groups in organisations across the West of England. Through this programme we have created over 90 internship placements across 25 organisations and in 2022 the programme won the Institute of Employers (ISE) Outstanding Partnership with an Employer award. Alongside our own programme we also provide opportunities as part of the 10,000 Black Interns programme.
- We are the only company in the FTSE 250 to have women in three out of the four key roles identified by FTSE Women Leaders on the Board - Chair, Chief Financial Officer and Senior Independent Director.
- We have 44.4% women on our Board and, this year, moving from 61st to 41st in the FTSE Women Leaders rankings for FTSE 250 companies.
- The Board has met the Parker Review recommendation for FTSE 250 Boards to have at least one director from an ethnic minority background by December 2024.
- We are proud signatories of the Women in Finance Charter and have made progress against our senior female representation target every year since signing.
- We are a member of the 30% club and the 50:50 Equality Project and signatories of the Race at Work Charter.
Impact of our Colleague Networks
Our colleague networks continue to support our aspirations to increase female and ethnic minority representation. Throughout 2023 our Gender Diversity Network and Cultural Diversity Network have been instrumental in fostering inclusivity and driving positive change within HL.
Collaborative efforts include initiatives such as partnering with Women’s Work Lab for a returnship program, facilitating Ramadan buddying opportunities and providing mentorship for programs such as HL’s Strive internship and the 10,000 Black Interns programme.
Noteworthy events included our inaugural Hannukah celebration and live lunar new year lion dance emphasising HL's commitment to embracing diverse cultural traditions.
Furthermore, they have made strides in promoting awareness and support for health-related issues such as endometriosis and menopause, with the appointment of Endometriosis and Menopause Champions who received specialised training.
What are we doing to close the Pay Gaps in 2024?
Our focus for 2024 to support narrowing the pay gaps will be on:
- Functional focus – the data has shown that we have different challenges in different parts and levels of our business and we need a targeted and tailored approach to drive change. We will be focusing on clarifying our aspirations by functional area, which support our organisation-wide targets and ensuring we have business-owned plans in place to drive long-term change.
- Recruitment – we will make changes to our recruitment processes to drive accountability for diversity amongst hiring managers deeper in our organisations to ensure a commitment to, where possible, attracting diverse candidate slates.
- Progression – we will be launching development programmes targeting female and ethnic minority talent to support talent to progress into new and more senior roles. This includes the launch of the EPOC Board Fellowship programme through which HL will host and also nominate a Board fellow, strengthening our internal talent.
- Supporting Black talent – we will be looking to support the development of Black talent within our Business Support and Service Delivery roles by piloting an internal progression programme for Black talent to help pull through into pipeline roles.