GENDER PAY GAP REPORT

ANGLIAN WATER’S

GENDER PAY GAP REPORT

2 Anglian Water – Gender Pay Gap Report

This report sets out the gender pay gap at Anglian Water, the reasons for it and the steps we are taking to close it.

What is the gender pay gap?

This is the average difference between the pay of men and women working for an organisation. It is not the same as equal pay. The law says men and women must be paid the same for doing equivalent work. If they are not, then their employer must justify why not. We pay men and women the same rates for performing the same roles. The reason for the difference in average pay for our male and female employees is explained below.

The law requires any company with more than 250 employees to publish its gender pay gap. Anglian Water’s gender pay gap on 5 April 2017 was:

• Mean gender pay gap 10.1%

• Median gender pay gap 16.9%

This compares with a national mean pay gap of 17% and a median figure of 18%.

Why is there a gender pay gap?

We have carried out a review of our pay to look at how the gap has arisen and whether there are any issues we need to address. The underlying reason is that we have more men than women in senior positions, which are in higher pay grades. This is a common issue in workplaces generally.

The water industry has traditionally been male dominated, with many professions like engineering where women are under-represented. While this is slowly changing, there are still fewer women than men studying the STEM subjects (science, engineering, technology and maths) at school and university.

This is an issue Anglian Water is helping to address. We want and need more women in our company, in our industry and in these professions. This report details some of the ways we are trying to make this happen.

In addition, many of our employees have been with the company for a long time. This shows we are a good employer to work for and means our workforce has a great store of knowledge that helps us provide a good service. However, a slow turnover of employees does limit the opportunity for new recruits, including women, to move into more senior roles. It also means that more men receive awards for long service. Again, this is starting to change as a result our work on closing the gap, detailed later in this report.

At present, 73% of our workforce is male, with just under half having been with us for 10 years or longer. However, when we look at employees under 30 years old, we are seeing an increasing number of women joining the company. Nevertheless, it is likely to be many years before we see a significant change in the gender balance of our employees.

What are we doing to close the gap?

We want to see an equal number of men and women joining Anglian Water. We are currently working to achieve an equal number of men and women across our trainee schemes, which will start to improve the gender balance in the business.

Our Diversity Board works to ensure that our efforts to attract new employees and our recruitment processes work for women.

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5

10

15

20

18%

16.9%

National Median Pay

Gap

Our Median Pay

Gap

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This includes offering flexible working for most roles, something research shows is valued by female employees.

We are also working to address the root cause of our gender pay gap, encouraging more women and girls to pursue STEM subjects and related careers, and to view us as a potential employer.

Case studies

1. National Women in Engineering Day

We support National Women in Engineering Day and for the last four years we have invited female Secondary students to an event at one of our treatment works or at a conference hall. The students take part in a range of activities designed to inspire them to consider engineering as a career. They also have the opportunity to meet and talk to employees from across the business and a number of our partner organisations. This year, we invited more than 200 students from seven secondary schools to take part in science and engineering challenges. As a result, 94% of the girls who attended said they were more positive about engineering.

2. Community Education

Our Community Education team has seen 355,693 people since it formed 10 years ago. Last year, the team saw more than 28,000 children, either at our education centres or over the course of 270 school visits.

They delivered free sessions with a focus on science, technology, engineering and maths related activities, linked to employability skills and expanding students’ knowledge of careers within Anglian Water.

The team works to change the perception of engineering and of other professional and technical roles among girls and boys, their teachers and adults at home. When they talk about our projects, they give examples of the men and women involved to help break down stereotypes.

3. Flexible working

Our Water Quality team is made up of scientists and technicians who work on the operational frontline of the business, helping to ensure the water we supply remains among the cleanest and safest in the world.

Five of Water Quality’s eight-strong senior leadership team and 52% of the wider scientific team are women, with flexible working playing a large part in their recruitment and retention.

Robin Price, Head of Water Quality, said: “Two of the most senior female scientists in the leadership team work flexible hours, which allows them to balance their responsibilities with bringing up young families. Offering flexible working allowed them to move into these senior roles and we have benefitted from their talent and experience.”

“In all, 10% of the Water Quality team works flexibly, whether that’s compressed hours, job sharing or flexibility around working location, and I know many people are attracted to work here because having a family isn’t a barrier to their career.”

Water Quality’s female scientists are also excellent role models in our work to encourage more women and girls to study STEM subjects and to consider a career in the water industry.

Equality matters

Anglian Water is committed to being an equal opportunities employer. We always aim to treat employees and job applicants fairly, regardless of their gender (including gender reassignment), age, race, sexuality, full or part-time status, marital status and disability. Two girls learning about sewage at Chelmsford Education Centre

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We value diversity and inclusion and believe it contributes to the continued success of our business. We also want to attract and retain a workforce that reflects the customers and communities we serve.

Eliminating any gender pay gap is an important part of this process.

Some more detail

Any company with more than 250 employees is required to report its gender pay gap in accordance with the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (“the Regulations”). This statement has been produced with reference to the Regulations and the associated guidance issued by ACAS and the Government Equalities Office, entitled Managing Gender Pay Reporting.

The Regulations require all organisations to make calculations based on employee gender on an annual basis. We will complete our annual calculations by using our existing HR and payroll records. All employees can confirm and update their records if they choose to by contacting the HR Team, Lancaster House, Huntingdon.

We are required to carry out six calculations that show the difference between the average earnings of men and women in our organisation. This does not involve publishing individual employees’ data.

The results can be used to assess:

• the levels of gender equality in our workplace• the balance of male and female employees at

different levels• how effectively talent is being maximised and

rewarded.

In determining remuneration for employees we have to balance:

• the economic environment within which we operate

• recruitment and retention pressures• market forces• performance both in relation to individuals

and the overall business• geographical issues, which can also influence

remuneration.

There are many objective reasons for pay differentials such as seniority, experience, location and in a small number of cases personal pay protection. The important thing in any pay system is that it is fairly and equally applied taking into account these different factors.

In our review of remuneration and pay practices we gave careful consideration to each of the 16 pay bands across the company. Of these, four favour women – mainly in the higher bands. The rest favour men, although in most cases the pay gap is very low. There are just three pay bands with pay gaps of between 10 and 15%.

We will keep the position under review to keep these gaps from widening and to eliminate them over time. We take action to address any pay gaps which are identified on an individual basis and also regularly review our policies, procedures and practices to ensure they are fair and reasonable.

As required, we have divided our workforce into four quartiles: the lower, lower middle, upper middle and upper quartile pay bands. The table above shows the proportion of men and women as a percentage of full pay relevant employees within each quartile.

For the reasons mentioned above, when comparing Anglian Water to other companies that have now reported, there are significantly fewer females in the middle quartiles, with a smaller gap of just over 10% at the Upper Quartile.

Quartile Number of Full Pay Relevant Employees

Number Of Females

Number Of Males

Lower Quartile

1,115 536 (48%) 579 (52%)

Lower Middle Quartile

1,115 293 (26%) 822 (74%)

Upper Middle Quartile

1,116 168 (15%) 948 (85%)

Upper Quartile

1,116 308 (27%) 809 (73%)

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Employees can obtain further details about how we intend to tackle our gender pay gap by talking to their line manager or visiting the pay and benefits section on the company intranet.

Bonuses

There is also a gender gap between the bonuses paid to our male and female employees.

• Mean gender bonus gap 16.8%

• Median gender bonus gap -8.7%

The minus figure indicates that, when calculated as a median, our gender bonus gap favours women.

A key reason for the disparity between the mean and median figures is that more women than men exceed their annual performance targets (31.4% as opposed to 25.4%). This is especially true of women in senior roles, who are paid more and receive a correspondingly higher performance bonus.

Our review found gender bonus gaps that favoured women in four of our 16 pay bands, and men in the remaining 12. In those that favour men, most bonus gaps are small, with four calculated at between 25-35%.

As mentioned above, one reason for our bonus gap is the traditionally male dominated nature of the industry and our low turnover of employees, which means more men are eligible for awards linked to long service.

In addition, more than 20% of our female employees work part time. The Regulations do not allow us to make calculations on a pro-rata basis to take account of part time working. If they did, the number of pay bands where the mean bonus gap favoured women would increase to nine, while those that favoured men by 25-30% would fall from four to three. Overall, the mean gender bonus gap would be 13.7%, and the median would be -22.3%.

In the 12 months to 5 April, 2017, bonuses were paid to 93.5% of men and 89.9% of women. This is a larger than expected proportion of men and can be explained by a one off performance bonus, which was paid to all employees during this period. This included 650 Works Technicians – 99% of them men – who are on their own separate pay scale and not normally eligible for a bonus. If the Works Technicians are removed from the figures, then the proportion of men receiving a bonus falls to 73.2%.

You can learn more about Gender Pay Reporting by visiting www.acas.org.uk/genderpay

I confirm that this statement is true to the best of my knowledge and belief.

Signed:

Fiona Guthrie, Director of Human Resources

89.9% 73.2%

WOMEN MEN

-8.7%

INCLUDING PART TIME FEMALE EMPLOYEES MEAN GENDER BONUS GAP = 13.7%

Percentage of Women and Men who received a bonus minus those not normally eligible.