Gender Pay Gap Report April 2023

Gender Pay Gap Report 2023

A word from our UK CEO

"Azets’ purpose is to improve the lives of our colleagues, our clients and our communities in a sustainable way. As part of this, diversity and inclusion is a key area of focus for us. We are pleased that we have made good progress over the past year, specifically in the reduction of our median and mean pay gap. It continues the downward trend since 2020, as we recruit more women into our senior roles and more men into our junior positions. However, we recognise that there is more work to be done. The Gender Pay Gap report will play a pivotal role in shaping our Diversity, Equity, and Inclusion (DE&I) strategy for the upcoming financial year, and we plan to share our strategy developments over the next few months. Narrowing our gender pay gap is something that we are fully committed to, and by retaining, recruiting and promoting the best talent, we will continue to create an environment where all of our people can thrive and achieve their career aspirations through equity of opportunity."

Peter Gallanagh, Azets UK Chief Executive Officer

As set out in Azets UK Pathway and 8 Business Priorities, we are committed to improving the diversity of our workforce across all levels by building a culture that’s genuinely inclusive, a culture where everyone can fulfil their potential and can be themselves.

The UK Government requires all employers with 250 or more employees to annually disclose their gender pay gap using the following metrics:

Mean gender pay gap
Median gender pay gap
Mean bonus gender pay gap
Median bonus gender pay gap
Proportion of men and women in each pay quartile
Proportion of men and women receiving bonuses

The data in our gender pay analysis, taken on the 5th April 2023, has been calculated using the standard methodologies set out in the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. It is based on FTE equivalent salaries for those who are part time.

Understanding Gender Pay

The gender pay gap is calculated by comparing the mean (average), and median (middle) hourly earnings of men and women based on the snapshot date of 5th April 2023. The mean and median bonus gap is based on bonus payments including performance, and other one-of payments received in the 12-months leading up to 5th April 2023.

The gender pay gap is not the same as equal pay. Equal pay is about ensuring that men and women performing the same or equivalent work are paid the same, whereas the gender pay gap is a statistical calculation which looks at the difference between the median and mean salaries of all females and all males across the organisation.

What impacts Gender Pay?

Gender minority representation (or lack of it) at both a senior level and lower level – i.e. the more females we have at the lower end of the pay scale, the lower the average salary relative to male employees.

Gender Pay Gap 2023 Summary

Our pay gaps are historically driven by under-representation of females in senior roles within Azets and is further impacted by many new acquisitions, where typically, there are a higher number of senior leaders/Partners who are men, transferring to Azets.

Azets has a mean (average) pay gap of 24.04% and a median (middle) pay gap of 13.69%.

We are pleased to report an improvement of 6.94% to our median gender pay gap and an improvement of 5.68% to our mean gender pay gap from April 2022 to April 2023. The pay gap continues the downward trend since 2021 as we recruit more women into our senior roles and more men into our junior positions.

When the report was run in April 2023, we had a gender split of 47% male and 53% female across the business overall; however, in three of the lower quartiles we have a higher proportion of females.

The average salary for men and women in our Job Families is comparable. However, our gender pay gap is driven by a lower proportion of women (30%) in our senior leadership roles, which is lower than the proportion of women (53%) employed by Azets UK. Furthermore, 61% of males are paid within the upper quartile compared with 39% females.

We still have a relatively large median bonus gap of 44.35%, however we have worked hard to reduce this, and the reduction was 25.6% over the last 12 months. Our mean bonus gap is 62.4% and this has slightly increased. Again, the gap exists as there is a greater proportion of men in our senior roles which results in a higher average and medium score. In 2022-3, 10.66% of men received a bonus, compared to 8.51% of women.

In addition, at Azets, our colleagues in Partner roles are employees of the business and are included in our gender pay gap data. In many of our competitor businesses, Partners are not classed as employees, and as a result, their pay data is not included, in their statutory gender pay gap reporting although is sometimes reported in other publicly available information. Taking that information into account, there is additional complexity to properly compare ourselves to others in our industry.

Building on the foundations we have introduced over recent years, we believe our 4-point gender pay action plan has the sponsorship, investment and resources to make Azets stand out from its competitors and attract and retain the diverse talent we need to deliver our growth aspirations.

Our Gender Pay and Bonus Gap Data

	Mean	Median
Pay Gap 2023	24.04% (-5.68% from 2022)	13.69% (-6.94% from 2022)
Bonus Gap 2023	62.35% (+0.54% from 2022)	44.35% (-25.6% from 2022)

Proportion of men and women in each pay quartile

Bonus Recipients

	Male	Female
Proportion of males and females receiving bonuses	10.66% (13.16% in 2022)	8.51% (7.89% in 2022)

What are we doing to close our gender pay gap?

Azets UK are committed to closing our gender pay gap and we recognise that to do this we need to increase the number of women in senior roles. We recognise that there is no quick fix, and we continue with our key objective to have a more even gender balance in the upper pay quarter.

Over the past year we have:

Increased our DE&I awareness across the company by:

Evolving our DE&I strategy and building a specific action plan to ensure women have equal opportunities
Introduced monthly gender reporting in our governance packs. Since July 2023, we have reported a 3% increase in women in our Job Family 2 roles (Directors & Partners)
Launching Authentically Azets, our DE&I Network group to provide our colleagues the opportunities to have a voice at an individual and collective level
Including Diversity, Inclusion & Belonging questions in our quarterly ‘Your Voice’ employee engagement survey to better understand feedback at office level
Introducing an inclusive group Amazing Azets Awards and monthly Azets UK Living the Values Awards
>96% of our employees have bi-annual performance reviews where development/needs and promotion readiness is discussed. We have also introduced a new Individual Development Planning process to support the development of our people into future roles

Made our senior roles more attractive to women by:

Running 3 cohorts of our ‘Journey to Advisory’ Leadership Development programme, with 54% of delegates, being women. To date there have been 12 promotions to Partner and 5 (42%) are women
Launching a new ‘Future’s Manager’ 12-month programme to develop our future leaders. >160 delegates, 49% of delegates are women
Rolling out ‘Agile’ Bank Holidays and Buy/Sell Leave policy, which coupled with our enhanced maternity and paternity pay and flexible working policies, provides all colleagues with greater flexibility
Recruiting a new, talented Candidate Experience Manager to help develop our Employee Value Proposition and improve our profile within, and outside of the organisation

Increased our social inclusion responsibility by:

Having regular internal communications, campaigns featuring D&I and wellbeing and an annual calendar of events
Introducing increased job placements and internships to provide a further step for students to encourage them to choose a career in our profession
Removing names (& other identifiable aspects) from our early career application forms. Reduced the minimum degree entry qualification from a 2.1 to a 2.2. Invested in an automated CRM process to remove bias from selection process, whilst removing timed maths test and video interview task
Signed a 3-year contract with the Princes Trust to provide funding and resources to young adults from deprived areas of the UK

Looking forward we are implementing a 4-point action plan that will:

Attract Diverse Talent

We will be enhancing our Azets.co.uk website career pages and rolling out a refreshed Azets UK Employee Value Proposition to differentiate ‘Why Azets’
We will be running targeted advertising campaigns with real life diversity stories from across our business
We will invest in D&I Job Boards and partner with a select number of executive search partners to attract a wider diversity of applicants and increase the diversity on our short lists

Assure Unbiased Selection

We are launching an AUK Partner/Senior Leader Recruitment and Promotion Processes to have consistency of approach and independence on the decision-making process
We will be introducing one set of Azets UK job descriptions for all job families, to improve transparency of role and job holder requirements, and align salary benchmarks
Enhancing inclusive hiring practices by rolling out Unconscious Bias Training to all employees and Interview Skills training for recruiting managers

Develop Diverse Talent

We will ensure that our current and future vacancies are published internally
We are embedding talent and succession management processes to identify future talent and will be offering mentoring & interview support in advance of assessments
Having piloted LeanIn Circles, we will be rolling out the concept across the business and will also be introducing Reverse Mentoring
We are continuing to invest in our Journey to Advisory and New Manager Programmes to provide all employees with the skills they need to progress their careers

Retain Diverse Talent

Further review and improve our family friendly policies and promote our flexible working arrangements
Pilot a sponsorships scheme
Join an external women’s network to provide external networking opportunities and introduce best practices to Azets UK

I confirm the data reported is accurate and has been calculated according to the legal requirements.

Peter Gallanagh, Azets UK Chief Executive Officer

Year	Mean hourly pay gender pay gap	Median hourly pay gender pay gap	Mean bonus gender pay gap	Median bonus gender pay gap
2020	31.26%	21.26%	76.42%	57.66%
2021	29.27%	23.1%	53.24%	50%
2022	29.72%	20.63%	61.81%	70%
2023	24.04%	13.69%	62.35%	44.35%

Percentage of men and women in each hourly pay quarter
Upper Pay Quarter	2020	2021	2022	2023
% Men	62.01%	63.32%	63.72%	61.07%
% Women	37.99%	36.68%	36.28%	38.93%
Upper Middle Pay Quarter
% Men	39.33%	43.46%	41.85%	44.59%
% Women	60.67%	56.54%	58.15%	55.41%
Lower Middle Pay Quarter
% Men	33.96%	37.06%	34.38%	36.33%
% Women	66.04%	62.94%	65.62%	63.67%
Lower Pay Quarter
% Men	41.88%	39.59%	43.48%	49.21%
% Women	58.12%	60.41%	56.52%	50.79%

Percentage of men and women receiving a bonus
	2020	2021	2022	2023
% of Men with bonus	36.14%	16.14%	13.16%	10.66%
% of Women with bonus	27.43%	13.19%	7.89%	8.51%