Gapsquare Blog

#NationalPayrollWeek: There's Something You Should Know About Your Savings and Share Plans

Posted by Hazel Lush on Sep 3, 2018 12:28:08 PM

Companies are increasingly looking at payroll data to identify inequalities, becoming adept at understanding pay gap and equal pay issues but it's time to move beyond this level of data, as we also begin to take in the tie-in between Savings and Share Plan take up and wider pay inequality - and in a world that requires us to understand these issues, knowing the facts has never been more important.

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At Gapsquare we've been working with Proshare to take a direct, in depth look at gender differences in Save As You Earn and Share Incentive Plans, expanding how you use your company's HR and Payroll data to build fairer workplaces. Proshare have been forward thinking and recently expanded their survey into employee use of SAYE and SIP plans to look directly at the impact of gender on plan take up, they've summarised these findings into a succinct and practical article and an invite to join their annual conference on the 3rd October.


Hacking Your Savings and Share Plans Pay Gap with Proshare 

ProShare’s annual report on the state of the Save As You Earn & Share Incentive Plan market analyses trends in the operation of and participation in the UK’s flagship tax-advantaged all-employee share plans, and it’s been running for more than ten years now.

2018 saw the 100th anniversary of the start of female suffrage in the UK and the first round of Gender Pay Gap reporting for employers with more than 250 UK employees. It therefore felt entirely appropriate – if not well overdue! - to introduce some gender-related survey questions on employee eligibility, participation and contributions to these plans. Whilst not all plan administrators were able to provide this gendered analysis in this first year, from those that were, we observed higher take-up and contribution rates for male employees than for their female colleagues in both Save As You Earn (‘SAYE’) and Share Incentive Plans (‘SIP’).

 

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SIP and Gender Differences

Our findings showed that the average value of SIP shareholdings in 2017 for women was £6,006 whereas for men the average value was £7,460 – a gap of 19%. It should be borne in mind that many Free share awards are calculated as a percentage of annual salary. If more women than men are employed in less senior, lower paid and possibly part-time roles, then it follows that the average value of their SIP Free share awards will be lower than those of their male colleagues.

SIP Partnership Share contribution rates between male and female employees were also found to be markedly different. The average monthly Partnership contribution per employee for 2017 was £87.70. For female employees, from the subset of data available, the average was £53.65, for male employees it was £87.07. This works out as a 38% difference.

Dividend reinvestments on these shareholdings – operated by around 50% of companies offering a SIP - compound these differences.

SAYE and Gender Differences

For new SAYE grants in 2017, the average monthly savings contribution per employee was £117.97, falling from £126.57 in 2016. On the data available, the average monthly savings contribution per female employee for 2017 was significantly lower at £104.37, whereas for men this figure stood at £145.75 – a difference of 28%.

Just 4.49% of SAYE participants overall saved at the statutory monthly maximum of £500. Male employees comprised 71.37% of this population, meaning that much less than a third of savers at the maximum were female.

 

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Downstream impact

These findings are a ‘downstream’ effect of the gender pay gap, which itself stems mostly from structural and attitudinal barriers to women’s access to higher paid roles in the workplace relative to their male peers. It is important to shine a light on these downstream effects, including lower pension contributions, if we are to fully understand the impact of the gender pay gap and put in the place the most effective countermeasures.

It is important to stress that neither SAYE nor SIP is discriminatory – these schemes’ legislation requires that all eligible employees are offered the opportunity to participate on the same terms, with the ultimate penalty for non-compliance being the withdrawal of the plans’ tax advantages for both employer and employees. But it is clear that some of the normal features of the plans and their operation can inadvertently ‘hardcode’ gender pay differences into participating employees’ financial outcomes from these plans. It’s also increasingly clear that unconscious biases may be present in the way that benefits such as SAYE and SIP are communicated to employees, which may also be having an effect on participation and take-up rates. It isn’t just a matter of affordability, it’s a matter of our attitudes towards risk and how these are shaped by unseen as well as more obvious influences.

Hacking your share plans gap

So what can you do as a share plan issuer to identify your own company’s share plans ‘gap’ and what actions could you take to help close that gap? Here are four things to consider:

  • Benchmark your share plans gap by obtaining a copy of ProShare’s SAYE & SIP Report by contacting them at team@proshare.org

  • Join Proshare at their Annual Conference on 3 October, expand both your understanding of share plans and your network – it’s just £29+VAT for non-ProShare member plan issuers to attend. Sign up here.

  • Give Proshare a call or drop them a line for guidance on practical steps when analysing your share plans data and running your share plans: 07771 540291 / gabbi@proshare.org / team@proshare.org .

  • Use Gapsquare to understand your SAYE and SIP pay gap, understand why it's there and take action to narrow these gaps faster. Gapsquare specialises in pay gap, equal pay and fair pay analysis allowing you to streamline your pay transparency approach and lead on equalities in your industry. Contact support@Gapsquare.com to find out more.  

Join the Conference


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