Gender Pay Gap
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 Plc (‘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 (2021) are referenced for comparison purposes.
Providing a complete energy service, SMS plc (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 2022 includes:
- The promotion of 13 women internally into management and senior level roles; Head of Agent Services, Strategic Relationship Manager, Head of Sustainability, Team Manager, Head of SHEQ Policy & Assurance, Delivery Project Manager, Business Analyst, Sustainability Manager, Project Manager Renewables, Reverse Asset Control Manager, I&C Capacity Manager, Group Payroll Manager and Contact Centre Manager;
- The external appointment of women of 4 women into management level roles; Operations Support Manager, Business Development Manager, Lead Software Developer, and I&C Metering Operations Manager;
- We are an Accredited Living Hours and Living Wage employer;
- We became members of WES (Women’s Engineering Society), the largest women’s engineering network in the UK, campaigning for gender diversity in engineering. The partnership with WES will enable us to support women within engineering careers and encourage young girls to see engineering as a career option and with their advice, and resources, this will help SMS in their continued journey to ensure a more diverse and inclusive workforce and culture, especially with female engineers.;
- We became a Cornerstone Employer within the South Yorkshire area, which provides us with the opportunity to inspire young people to consider a future in our industry and to develop the skills of our future workforce – building our talent pipeline;
- Winner ‘Best Diversity & Inclusion Initiative’ – the S1 Awards 2022, recognising the way we embrace diversity and inclusion in our recruitment and people management;
- We launched our ‘Levelling Up Impact Report’, developed in partnership with The Purpose Coalition, presented to business leaders and MPs in Westminster, outlining how we are making a positive social impact;
- We participated in various local school engagement activities such as mock interview days, careers fairs, and career networking, to support our future talent pipeline and wider levelling up agenda and;
- We have updated our voluntary Equality, Diversity & Inclusion (EDI) monitoring form via our secure HR system for existing and new employees to complete, to capture 4 socio-economic questions, to support the levelling up agenda, and enable the business to monitor and report on our workforce, to be able to identify the steps required to become a more inclusive and diverse employee base.
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 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. See Table 2.
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. See Table 2.
From the Office of National Statistics (ONS) in 2022, the gap among full-time employees increased to 8.3%, up from 7.7% in 2021. 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. Amongst all employees, the gender pay gap decreased to 14.9%, from 15.1% in 2021, but 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;
- There are more men than women in senior roles
- There are more women in part-time roles
- There are 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 Women’s
Engineering Society) who provide workforce statistics, in March 2022:
- Women make up 16.5% of all engineers, compared to 10.5% reported in 2010;
- This represents a 6 percentage point increase in the proportion of women in the engineering
- The actual number of women working in engineering roles also increased from 562,000 in 2010 to 936,000 in 2021 and;
- The Royal Academy of Engineering’s Fellowship (comprising Fellows, Intl Fellows, Honorary Fellows, and Emeritus Fellows) currently has 1672 individuals, of whom 145 are female (8.7%). However when reviewing Fellows (i.e. the active and mainly UK-based part of the Fellowship), there are 1251 Fellows, of whom 123 are female, which is 9.8%.
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.