Thought Machine’s Gender Pay Gap: A snapshot of April 2021

Gender Pay Gap: A snapshot of April 2021

What is the gender pay gap?

At Thought Machine, we calculate our gender pay gap based on UK Government guidance:

The gender pay gap is the difference between the average (mean or median) earnings of men and women across a workforce.

Companies that employ more than 250 people (like Thought Machine) are legally required to publish a snapshot of their gender pay gap each year, using data from the year prior. The following data is a snapshot of our gender pay gap position as of April 2021.

What is the gender pay gap?

At Thought Machine, we calculate our gender pay gap based on UK Government guidance:

The gender pay gap is the difference between the average (mean or median) earnings of men and women across a workforce.

Companies that employ more than 250 people (like Thought Machine) are legally required to publish a snapshot of their gender pay gap each year, using data from the year prior. The following data is a snapshot of our gender pay gap position as of April 2021.

The methodology

The data does not reveal individual salaries or any difference in the salary paid for the same role (which is illegal under the Equality Act) – rather, by looking at the data in aggregate, we see a picture of the overall differences in pay between men and women in the business. This data also reveals the kinds of roles held by men and women – and which gender is more or less represented in different salary bands.

It is an opportunity for us at Thought Machine to observe the disparity in pay between men and women across the business and ask ourselves the question as to why those differences exist.

We have collected and analysed data with regards to:

Average hourly pay for men and women
Bonus pay for men and women
The proportion of men and women in different pay quartiles

The data

April 2021 hourly pay gap

As of April 2021, there was a mean (average) difference of 13.6% in the hourly pay received by men and women. This means that, on average, men are paid 13.6% more per hour than women in our company. A discouraging figure, however, we have made progress, moving the mean down from 20% the year prior. This reflects the focus we have put into improving D&I at Thought Machine, but we still have a way to go.

A mean calculation will take all the available data points (i.e., every person’s hourly pay amount) and divide that number by the number of people in the set (i.e., the total number of employees counted). Data like this can sometimes be skewed by outliers – those who earn the highest and lowest amounts in the business – so we also want to calculate the median difference.

The median difference picks the data point precisely in the middle of the complete list of everyone’s hourly pay – for men and women – and we calculate the percentage difference between those two numbers.

In our data set, the median difference shows that hourly pay was 12.1% higher for men than for women. This figure is down from 14.6% the previous year. While slightly more encouraging than the mean, the data reveals a bias towards men holding more senior positions and ,therefore, higher-paid roles in the business.

April 2021 bonus pay gap

Bonuses are not a standard feature of the Thought Machine compensation structure. However, we do offer a commission to our Sales team and referral fees to anyone in the company who successfully refers a candidate who joins Thought Machine. Commission fee and referral fee data must be combined to calculate our bonus pay gap figures.

Percentage of employees who received bonus pay

As Thought Machine has more men in the organisation than women, we expect to see men being those who more frequently receive bonus pay. This is heightened by the fact that the Sales team was predominantly male. However, we have made significant progress here, having hired significantly more women into our sales teams globally.

We have calculated that 12.8% of bonus pay went towards men, while 11.2% went towards women.

Difference in bonus pay

Our calculations show a 67.9% difference in bonus pay between men and women. This gap is due to the size of commission paid on sales compared to the relatively low amount paid out for referrals.

The median numbers – the numbers in the middle of the set – is zero, meaning men and women are paid the same bonus.

While we continuously strive toward sourcing and recruiting more female members across the business, we are conscious of the disparity between those who receive commission pay and those who do not.

We have already begun taking steps to rectify the gender imbalance within the Sales team. Looking at our recruiting data for the past calendar year, we are proud to say that 31% of hires made into the Sales team were women – compared to 0% for the calendar year before. Though progress is slow – we believe we are on the right track to having women better represented across the business – especially in the Commercial department.

April 2021 pay figures and quartiles

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Our April 2021 pay and quartile data immediately reveal the strong imbalance we have at the highest levels of the organisation. However, we are moving in the right direction compared to last year.

The upper quartile of our business, the highest-paid segment of Thought Machine, comprises 82% men and 18% women. This is a 7% improvement from last year. In the upper-middle quartile, men make up 87.5% of this group and women 12.5%, which is a 7% reduction from the previous year. One quartile below, in the lower middle quartile, women make up 25% of this segment, while men make up 75%. Women make up 33% of this segment in the lower quartile, while men make up 67%The last two quartiles have remained static compared to last year. The net movement is a move of 7% from women in the upper-middle to the upper quartile. This is a positive move and shows that we have moved women into senior positions; however, we still have a long way to go to parity.

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Our commitments and initiatives

Improved gender pipelines

An integral part of building a well-balanced team is to have a well-balanced pipeline. In recruitment terms, that means having a long list of relevant and interested men and women we can speak to and discuss job opportunities at Thought Machine.

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If the pool isn’t well balanced – we end up with too many of one kind of person applying for roles – so we need to do everything we can to go out to the market and get different people interested in working at Thought Machine.

Our approach is working. In 2020 our target was to hire 22% women, which we achieved; the 2021 target was 30%, and we reached 34%. Although we need to get to 50%, this is a significant achievement when considering the industry's diversity as a whole.

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D&I initiatives

To help improve your D&I initiatives we have undertaken the following measures:

In 2021 we implemented Textio, a service that helps us write gender-neutral job descriptions.
Many of Thought Machine’s talented employees are recent university graduates. We work with specialist groups giving them first-hand insights and experience of a career at Thought Machine.
We continue to forge relationships with groups and organisations to help improve our Diversity and Inclusion.
Throughout 2022, we’re organising multiple meetups across our offices with the; ‘Women Who Go’ organisation to help connect like minded women across the industry.
We have kicked off our first round of succession planning to identify key talent in the organisation.
We increased our paid maternity leave to 100% of base pay from weeks 1 - week 26 (inclusive). Our shared parental leave & adoption leave continues to be matched with our enhanced maternity offering. This is to help new parents feel better supported during a pivotal moment in their lives and feel empowered to come back when they are ready.

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Signed – Matt Wilkins, Chief People Officer, Thought Machine

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