TSB is building a different kind of bank which lives and breathes a diverse, inclusive and transparent culture.
This year, for the first time UK companies, with over 250 staff, have to report on their gender pay gap.
This is an incredibly important step forward because if companies are transparent about pay, and identify the root causes of any pay gap, they can find the solutions they need to build businesses that reflect society.
And that’s exactly the approach we are taking at TSB.
Because we’re a different kind of bank with a transparent, diverse, and inclusive culture. This is not about promoting one group of people above another, but about ensuring everyone, regardless of their background, race, ethnicity or gender, has an equal opportunity to thrive.
We want to create a bank that attracts and retains the best people and reflects the communities we serve. That is why from the beginning we’ve pushed to get a good balance of men and women working across grades and functions – after all 50% of our customers are women.
At 31%, our mean gender pay gap is smaller than the indicative average for the financial services industry(1). However, it’s still greater than the UK average for all industries. So naturally we wanted to understand what’s driving our pay gap and understand what we can do to improve it.
We’re confident that TSB’s gender pay gap is not a pay issue; we know this because our approach to pay is gender neutral by design and our analysis shows that our pay gap is driven by the structure of our workforce.
We regularly analyse and monitor our pay to make sure our male and female Partners are treated equally. Just one percentage point of TSB’s mean gender pay gap is due to the difference in pay between men and women within each grade.
The remaining 30 percentage points are a direct result of the make-up of our workforce. These are:
- TSB has a significantly higher proportion of women (69%) than men (31%) in our non-senior management roles.
- TSB has a higher number of men (59%) than women (41%) in senior management roles.
We’ve calculated that if TSB achieved a 50:50 gender mix in our non-senior management roles, our mean pay gap would reduce by 23 percentage points to 8%.
And if we also had a 50:50 gender mix in our senior management grades our mean pay gap would reduce by a further seven percentage points to one percent.
Understanding TSB's bonus gap
The structure of our workforce is also influencing our mean bonus gap, which sits at 53%.
We know the TSB Award, (our annual award), is gender neutral by design. (2) But the shape our workforce drives our mean bonus gap, in the same way it does our gender pay gap.
Six percentage points of our mean bonus gap are due to the difference in bonus pay between men and women within each grade. The remaining 47 percentage points are a direct result of the make-up of our workforce.
Our gap is affected by two main factors:
- We pay an additional incentive award to our most senior Partners
- And we can only include the pro-rated bonus for Partners who work reduced hours.
First, we have 180 Partners who are eligible for a Long Term Incentive Award, TSB’s Sustainable Performance Award (SPA). Two thirds of these Partners are men.
Secondly, 29% of our Partners, 95% of whom are women, choose to work reduced hours. At TSB we want to design our roles to fit society, not to try and change society, which is why we are proud to enable our partners to work reduced hours if it suits their lifestyle. But this does impact our mean bonus gap. This is because reduced hours partners receive a pro-rated bonus to reflect the number of hours they work. If the bonus gap was calculated based on the bonus these partners received if they worked full time, our overall mean bonus gap would reduce to 47%.
How TSB is tackling its gender pay gap
The gap, in both our mean pay and mean bonus, shows there’s more work to be done. And while we don’t have an equal pay issue, we do need to take steps to reduce our pay gap.
That means we’re having a closer look at the structure of our workforce and in particular what we can do to get more women into those senior roles. This isn’t new to us – in fact it’s something we’ve been working on since we launched back on the high street in 2013.
And it’s already delivering results. We‘ve met the Government’s target of 33% of Boards being women – in fact we’ve exceeded it – and we’ve also met the Hampton-Alexander target for 33% of executives and their direct reports to be women.
We have also improved our talent pipeline, with the proportion of female Partners in senior roles increasing from 37% to 41%. And, as part of our commitment to the HM Treasury’s Women in Finance Charter, we’ve made a commitment to have between 45-55% of our senior roles held by women – making us one of the most ambitious organisations on gender balance in financial services.
So we’re happy with what we’ve achieved over such a short period of time, but these figures show more can be done. That’s why we’ve adopted three additional signature actions we believe will help us close the gap even more.
The signature actions TSB is taking to tackle gender imbalance head-on
1. We are taking steps to get more women into financial services and, more specifically, TSB:
- Returning women campaign – many talented women left financial services due to cultural challenges. We want to find these women and show them that TSB isn’t like other banks. So we’re launching a recruitment campaign targeted at women who have left financial services or have taken a career break and are looking to return back to work.
- Gender balanced shortlists – we’ve been using gender balanced shortlists for external recruitment at senior levels for almost two years which has helped us increase the number of women in senior management roles. This is why we’re extending this to external recruitment at all levels in TSB. This means we have an equal share of men and women on our shortlists and have a better chance of getting the best person in the role. That could be more women in some jobs or more men in others.
2. We will do more to support gender balanced progression at TSB
- Partners for Partners – research shows women often find the transition back to work difficult. Programmes which support people during key moments in life help prevent talented people leaving. That is why we’ve set up a support programme which pairs up those going on parental leave with a ‘buddy’ who has been through the same or similar experience.
- Talent championing – research(3) found that to make meaningful progress on gender parity and to encourage the next generation, companies must set expectations that all leaders are responsible for encouraging and developing female talent. This is why in addition to our traditional mentoring programmes for Partners, regardless of gender, we are asking each Bank Executive Committee member to champion additional female Partners from our rising stars. We also use this approach as part of our wider initiatives to drive better internal succession planning for women to reach Executive roles.
3. We will talk about gender balance in a transparent way
- Data alone does not drive change – this is why we’ll go beyond the regulatory requirements to publish data and give a full analysis of the core drivers for our gender pay gap and what we are doing to tackle them.
Gender balance matters
We think we’re doing our bit to close our gender pay gap, but we are also calling on other organisations to work with us in tackling this problem head on.
We believe that if businesses are more transparent about the root causes of gender imbalance in their organisation, and share the steps they are taking to tackle gender balance, then the UK will build a sustainable gender balanced workplace at a faster rate.
Three simple changes will help the UK build a gender balanced workplace that lasts for the long-term
TSB is calling on businesses to take three simple steps to understand, take action and report back on progress towards creating gender balance:
Businesses must give the reasons for their gender pay gap – they shouldn’t just report on the figures, they need to identify the root cause. At TSB this means analysing the data to identify the impact pay differences and the make-up of our workforce has on our gender pay gap.
Companies must act to address unfair pay gaps – we believe that all businesses should share three signature actions to address the key reasons for their pay gap. At TSB, this means taking steps to make sure we have gender balance in senior roles.
Businesses must be held to account on the progress they are making – they should report annually on those signature actions and include within their report, over time, a rolling five year trend which shows the progress they’re making. TSB is committed to doing this.
For more information on how TSB is tackling gender imbalance take a look at our
Gender Balance Matters report.
Rachel Lock, HR Director: I confirm the data in this report to be accurate
(1) PwC, Women in Work Index 2017 (2017), P4
(2) We offer the same percentage opportunity to everybody regardless of grade or role with the award dependent only on performance. Any difference in the percentage of male and female Partners receiving a TSB Award is therefore mainly a result of performance outcomes.
(3) Research from Bain & Company