Diversity and inclusion are critical to the FCA, as an employer, a regulator, and a public body. We are committed to tackling inequality and under-representation. We want to build an inclusive environment for all our colleagues that is reflective of the communities we serve.
Our pay gap data for 2023 covers the reporting period 1 April 2022 to 31 March 2023. This year we have seen improvements in most of our pay gaps, and we continue to identify and address the underlying issues we know still exist.
Calculating our pay gaps
Our pay and bonus gaps are measured on a median and mean basis.
The mean and median provide a measure of the centre of the dataset. By comparing the median to the mean, we get an idea of the distribution of the dataset. When the mean and the median are the same, the dataset is evenly distributed from the lowest to the highest values. When the mean and the median are different then it is likely that the data is not symmetrical and is skewed.
The mean involves adding up all the numbers and dividing the result by how many numbers were in the list. The median involves listing all the numbers in numerical order. If there is an odd number of results, the median is the middle number. If there is an even number of results, the median will be the mean of the 2 central numbers. The gap is the difference in these values for 1 group compared to another. For example, the median for men compared to the median for women.
The calculated pay gaps are based on data recorded on 31 March 2023. The method of calculation used to calculate the gender pay gap is also used to calculate the ethnicity and disability pay gaps. The bonus gap is calculated based on bonuses awarded during the period 1 April 2022 to 31 March 2023. The data used to calculate the 2023 bonus gaps includes bonus awards committed to in April 2022, relating to the 2021/22 performance year.
For reference throughout the report, where we use:
- 2023 this is the data for the period April 2022 to March 2023
- 2022 this is the data for the period April 2021 to March 2022
- 2021 this is the data for the period April 2020 to March 2021
Relevant population
We have set out below those employees that are included or excluded in our reporting data, ie, the ‘relevant population’. This methodology is based on how a colleague identifies their gender in accordance with the Government Equalities Office pay gap reporting statutory guidance[1]. We are committed to respecting how an employee identifies in terms of their gender.
Included:
- Employees on our payroll on 31 March 2023.
- Employees who identify as Female or Male through disclosure. If employees have not disclosed their gender, then we use sex identified through payroll.
Excluded:
- Employees who have identified as Non-Binary, I use another term, prefer not to say.
- Employees who have not been paid a full month’s pay. This could be due to an unpaid absence, or those leaving / joining part way through the month as we are unable to calculate their regular pay.
The population identified in the gender pay gap reporting is the same population used for the ethnicity and disability reporting ie, only those colleagues who meet the gender pay gap reporting criteria are included. This means the disclosure rates in this report may differ from other published data.
Where we have stated employee numbers by groups in tables, these numbers are based on our ‘included’ population.
1. Key findings
Our latest figures compared to the last 2 years are shown in the table below.
Table 1: Pay and bonus gap figures for the years 2023, 2022 and 2021
| Median | Mean | ||||||
|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | ||
| Gender | Pay gap | 14.3% | 19.8% | 20.1% | 13.1% | 15.6% | 16.3% |
| Bonus gap | 19.0% | 33.3% | 23.5% | 15.2% | 16.4% | 20.2% | |
| Ethnicity | Pay gap | 17.5% | 22.5% | 24.5% | 21.4% | 22.8% | 24.4% |
| Bonus gap | 19.7% | 33.3% | 28.8% | 17.6% | 13.7% | 25.9% | |
| Disability * | Pay gap | 7.3% | 9.3% | 9.4% | 8.6% | 6.2% | 3.8% |
| Bonus gap | 17.8% | 17.9% | 15.1% | 12.2% | 5.3% | 15.3% | |
*The number of colleagues declaring whether they have a disability or not is lower in 2023 at a 68% disclosure rate, compared to 78% in 2022. This is 10 percentage points lower than the previous year, and this can cause fluctuations in yearly comparisons.
Key changes for 2023 compared to 2022:
- Reductions in all our median pay and bonus gaps.
- Reductions in our mean gender pay and bonus gaps, and a reduction in our mean ethnicity pay gap.
- The mean ethnicity bonus gap and the mean disability pay and bonus gaps have increased.
- Our population has seen considerable change between the two reporting periods. A quarter of the population reported in this pay gap report were new to the organisation and were not part of the 2022 pay gap report. This will introduce some change to the characteristics and salary levels of the workforce.
2. 3-year trends
Overall, our pay and bonus gaps have largely moved in the right direction in the previous 3 years. This year we have seen some further improvements following the introduction of our new employment offer from April 2022 – please see section 3 below.
We continue to analyse our people data to identify the underlying drivers of our pay and bonus gaps. This helps us to understand where we need to target our interventions.
Drivers of our pay and bonus gaps
Our pay and bonus gaps continue to be driven mainly by imbalances in the distribution of colleagues in different roles and grade levels within the organisation. Whilst progress has been made in 2023, we know we still have more work to do to see impactful sustainable change.
Because our bonuses were awarded as a percentage of annual salary, our bonus gap is also impacted by the distribution of part time workers. However, the pay gaps are not impacted by the distribution of part time workers as the calculation uses a full time equivalent hourly pay rate.
We have revised our gender and ethnicity targets by expanding targets to pipeline grades. We have also made them more ambitious to boost female and minority ethnic representation at senior levels of our organisation. Alongside target setting, our Diversity, Equality and Inclusion (DEI) programme[2] sets out several interventions that will help us to improve representation across all diversity characteristics and narrow our pay gaps even more in future years.
3. Our new employment offer
We launched the new employment offer[3] in March 2022, with changes introduced from April 2022. This followed an extensive consultation period that started in September 2021. Our new grading, pay and benefits offer aims to help us retain and attract the skills we need to meet our vital objectives – protecting consumers and markets and promoting competition – for the long term.
The new employment offer is designed to:
- provide fair, competitive pay at all levels
- reward strong, consistent performance
- simplify our previously overly complex structure of pay and job families
- aid transparency and career development
- protect the benefits colleagues value for the long term
- support our aim of closing our pay gaps
The first year of the employment offer resulted in an overall average salary increase of 7.1% across the total eligible population as of 1 April 2022.
The changes introduced in the new employment offer focused the greatest pay increases on those in the less senior roles. This resulted in a positive impact on the pay of younger, female and minority ethnic colleagues. Simplifying and making our approach to pay and job families more transparent, will deliver diversity and inclusion benefits as part of our broader strategy. It also assists career development and mobility. The combined impact of these changes in closing our pay gaps has been reflected in this year’s reporting period.
Our discretionary performance bonus scheme has now been completely withdrawn. The last awards were paid in April 2022 for the performance year 2021/22, so are included in our bonus pay gap publication data for the last time, covering the reporting period from 1 April 2022 – 31 March 2023.
We remain committed to recruiting, developing, and retaining diverse talent across the organisation, and supporting the wider financial services sector.
4. Greater transparency
We continue to increase our transparency, publishing our ethnicity pay gaps and disability pay gaps, despite there being no legal requirement to report these, as we believe that data transparency drives positive action.
For the fourth year, we have also published more detailed data. We’ve shared our ethnicity pay gap, broken down into the UK census ethnicity categories, our pay gaps by contractual grade, as well as the intersectional gender and ethnicity pay gap.
We know that the experience of ethnic groups is not the same, and more granular data helps us better understand our challenges and take more targeted positive action.
5. Movements in our pay and bonus gaps
We continue to see positive changes in our pay gap figures overall. There are positive changes in all the median pay gaps, and the mean pay gaps for gender and ethnicity. The only exception is the mean pay gap for disability which has increased from 6.2% in 2022 to 8.6% in 2023.
For this reporting period, the figures reflect the outcome from the first of a 2-year commitment following the introduction of our new employment offer. The changes in the pay gap are reflective of our commitment to reward strong, consistent performance and aid career development and advance our diversity and inclusion objectives.
We have seen more significant movements in our median bonus gap figures for gender and ethnicity and a small difference for disability. There is a slight positive change in the mean gender bonus gap, with a negative change in the mean bonus gaps for ethnicity and disability. For this reporting period, we changed how discretionary performance bonuses were awarded in April 2022 compared to the previous 2 years.
In April 2020, 89% of the organisation received a performance bonus award based on a percentage against salary.
In April 2021, following the impact of Covid-19 we made a change in our approach. The overall funding was reduced, and the awards were based on a fixed value calculated as a percentage of the average salary for each grade. Awards were calculated as a fixed amount of 11% of average salary for most junior roles. For most senior roles the percentage used to calculate the fixed amount was 8%. Up to 99% of the eligible population received a performance bonus award. The impact of this reflected a reduction in the mean bonus gaps.
In April 2022, only 25% of the organisation were eligible to receive a performance bonus award for the 2021/22 performance year, at a maximum value of 10% of salary.
Our discretionary performance bonus scheme was then completely withdrawn for the 2022/23 performance year.
The very different approaches to bonus awards since 2020 is likely to significantly contribute to the year-on-year deviation to the respective bonus gaps over the last 3 years.
6. Pay and bonus gaps
Table 2: Our 2023 pay gaps by gender, ethnicity and disability
| Gender | |
|---|---|
| Median | Mean |
| 14.3% | 13.1% |
| Ethnicity | |
|---|---|
| Median | Mean |
| 17.5% | 21.4% |
| Disability | |
|---|---|
| Median | Mean |
| 7.3% | 8.6% |
It is important to consider disclosure rates when reviewing movements in pay and bonus gap reporting, with those declaring any given characteristic being a proportion within this. Smaller populations are more likely to have bigger percentage changes where the underlying data may see minimal shifts.
Table 3: Our disclosure rates for gender, ethnicity and disability for 2022 and 2023
| Group | Disclosure rate 2023 | Disclosure rate 2022 |
|---|---|---|
| Gender | 100% | 100% |
| Ethnicity | 88% | 90% |
| Disability | 68% | 78% |
Our disclosure rates are outlined in Table 3 and reflect the relevant employee population as of 31 March 2023. For a comparison, we have included the disclosure rate for 2022, which highlights a reduction in the disclosure rates for ethnicity and disability. This is likely to be attributable to the 25% change in the employee population over the last 12 months.
Table 4: Our bonus gaps by gender, ethnicity and disability
| Gender | |
|---|---|
| Median | Mean |
| 19.0% | 15.2% |
| Ethnicity | |
|---|---|
| Median | Mean |
| 19.7% | 17.6% |
| Disability | |
|---|---|
| Median | Mean |
| 17.8% | 12.2% |
6.1. Bonus amount and proportion
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Data table
Figure 1 shows that 19.2% of women and 20.5% of men received a bonus in the 2023 reporting year. Bonus awards were paid in April 2022 and the snapshot date for reporting is 31 March 2023. This means colleagues who received a bonus in April 2022 may have subsequently left the FCA and are not included in the proportion of colleagues receiving a bonus.
Colleagues joining the FCA after April 2022 will have been included but were not eligible to receive a bonus. Our target was to award 25% of the organisation a bonus award and this was achieved with 24% of women and 26% of men receiving a bonus in April 2022.
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Data table
Figure 2 shows the median and mean bonus amounts paid to women and men in 2023, compared to 2022.
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Data table
Figure 3 shows that 12.7% of minority ethnic colleagues and 23.8% of white colleagues received a bonus in 2023. Bonus awards were paid in April 2022 and the snapshot date for reporting is 31 March 2023. In April 2022, 18.3% of minority ethnic colleagues received a bonus award.
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Data table
Figure 4 shows the median and mean total bonus amounts paid to minority ethnic and white colleagues in 2023 and 2022.
Both the median and mean bonus values for minority ethnic colleagues are smaller than that of white colleagues. The average bonus value for both minority ethnic and white colleagues has decreased compared to 2022. This is reflective of the different approach to bonus awards between the 2 years.
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Data table
Figure 5 shows that 22.8% of disabled and 23.7% of not disabled colleagues received a bonus in 2023.
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Data table
Figure 6 shows the median and mean total bonus amounts paid to disabled and not disabled colleagues in 2023 and 2022. The mean and median values of bonus awards have decreased overall when compared with the previous year.
6.2. Distribution by salary quartiles
The distribution by salary quartiles looks at the hourly rate of pay when ordered from lowest to highest and grouped into equal quarters.
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Data table
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Data table
Figures 7a and 7b shows the gender distribution split by salary quartiles in the pay years 2022 and 2023.
The gender distribution split by salary quartiles shows that over the last 12 months the distribution has remained relatively static. However, there has been a slight decrease in the number of women in the lower middle quartile, moving from 55% to 53% when compared with the previous year. This positive trend means there are more women moving into the higher middle and higher quartiles, with 47% compared to 44% women in the higher middle quartile and 42% compared to 40% in the higher quartile compared to the previous year.
There has been an increase in the overall number of minority ethnic colleagues in 2023 (1,323) when compared against 2022 (1,047). The most significant increase has been in the Associate population, which has increased from 805 (2022 reporting period) to 1,095 in this reporting period.
Whilst we are recruiting a higher number of minority ethnic colleagues, they are predominantly entering into the Associate contractual grade, rather than more senior contractual grades.
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Data table
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Data table
Figures 8a and 8b show the ethnicity distribution split by salary quartiles in the pay years 2022 and 2023. The minority ethnic distribution split by salary quartiles shows that over the last 12 months the distribution has shown some positive changes. Whilst there has been a 4 percentage point increase in the lower quartile (49%) and a 7 percentage point increase in the lower middle quartile (41%), more minority ethnic employees are in the higher middle quartile (a 6 percentage point increase to 32%) and in the higher quartile (a 2 percentage point increase to 18%) when compared with the previous year.
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Data table
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Data table
Figures 9a and 9b show the disability distribution split by salary quartiles in the pay years 2022 and 2023.
The number of colleagues recorded as having any form of disability is 208, or 7.1% of the total population. This compares with 203 colleagues declaring a disability in 2022.
Even though the numbers are small, there tends to be a more even distribution through each of the pay quartiles in 2023. There is a slightly higher proportion of disabled colleagues in the lower and lower middle quartile than there are in the higher middle and higher quartiles.
6.3. Contractual grade breakdown
We are continuing to work hard to make sure we close our pay gaps by identifying and taking positive actions to drive change.
In 2019 we started to publish our ethnicity pay gap and in 2020 we included our disability pay gap even though publication of both is not mandatory.
In 2020, we also introduced greater disclosure and transparency around our gender and ethnicity pay gaps, publishing breakdowns that go beyond the mandatory legal reporting requirements. We do this because we believe transparency drives action. We hope it encourages discussion, highlights areas where we need to make improvements and helps us to address our challenges.
The figures below provide a breakdown by contractual grade for gender, ethnicity, and disability. The figures all show the overall FCA pay gaps by contractual grade for each characteristic. The pay gap data also shows a comparison between the 2022 and the 2023 reporting year.
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Data table
Figure 10 shows the gender pay gap broken down by contractual grade for 2023 and 2022. The calculation used to determine the pay gap uses ‘men’ as the control group. Negative numbers indicate pay gaps that favour women. Positive numbers indicate pay gaps that favour men.
Table 5: Employee numbers by grade for 2023
| Role | Women | Men |
|---|---|---|
| Professional Support | 276 | 40 |
| Associate | 1586 | 1522 |
| Manager | 204 | 260 |
| Technical Specialist | 101 | 202 |
| Head of Department | 52 | 50 |
| Director | 19 | 22 |
The gender pay gap shows that within grades the pay gap is relatively small. The Professional Support pay gap of -27.3% is disproportionately in favour of women.
At the Professional Support level there are more than 6 times as many women as men, this over-representation is a large driver of the overall gender pay gap.
To illustrate this, we have reproduced the overall 2023 gender pay gap figures but excluded any employees in the two Professional Support grades. This reduces the median gender pay gap from 14.3% to 9.5% and the mean pay gap from 13.1% to 8.5%.
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Data table
Figure 11 shows the ethnicity pay gap broken down by contractual grade for 2023 and 2022. The calculation used to determine the pay gap uses ‘White’ as the control group. Negative numbers indicate pay gaps that favour ‘Minority ethnic’. Positive numbers indicate pay gaps that favour ‘White’.
Table 6: Employee numbers by ethnicity
| Role | Minority ethnic | White |
|---|---|---|
| Professional Support | 91 | 190 |
| Associate | 1095 | 1616 |
| Manager | 67 | 342 |
| Technical Specialist | 50 | 221 |
| Head of Department | 13 | 79 |
| Director | 7 | 30 |
Within the Associate grade, there has been positive change with a reduction in the Ethnicity pay gap of 1.5 percentage points. However, this is still the highest Ethnicity pay gap by contractual grade despite this grade containing the largest minority ethnic population across all grades. It is less likely to fluctuate due to small employee numbers.
There are 4 levels within the Associate grade: Level 9 Associate, Level 8 Associate, Senior Associate and Lead Associate. There is a greater proportion of minority ethnic employees within the Level 9/8 Associate level, with lower numbers in the Senior Associate and Lead Associate roles. This is similar within the 2 levels at the Professional Support grade and explains the larger pay gaps at these grades.
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Data table
*Where there are fewer than 6 people an asterisk is used to avoid identifying individuals.
Figure 12 shows the disability pay gap broken down by contractual grade for 2023 and 2022. The calculation used to determine the pay gap uses ‘not disabled’ as the control group. Negative numbers indicate pay gaps that favour ‘disabled’, positive numbers indicate pay gaps that favour ‘not disabled.’
Table 7: Employee numbers by disability
| Role | Disabled | Not disabled |
|---|---|---|
| Professional Support | 13 | 198 |
| Associate | 160 | 1843 |
| Manager | 15 | 354 |
| Technical Specialist | 15 | 213 |
| Head of Department | * | 80 |
| Director | * | 31 |
*Where there are fewer than 6 people an asterisk is used to avoid identifying individuals.
The disability pay gap has increased in favour of ‘not disabled’ colleagues since 2022 in the Professional Support, Associate and Manager groups. The disability pay gap has also increased at the Technical Specialist level but in favour of disabled colleagues. The proportion of employees declaring a disability is less than 10% so the figures can vary considerably year on year.
6.4. Intersectional gender vs ethnicity pay gaps
We have also considered the intersectionality of ethnicity and gender. This provides greater transparency and highlights the challenges faced by different groups and how we should focus our actions.
Since 2020 we have calculated the pay gap for minority ethnic women. The calculation is based on a comparison between minority ethnic women and white men. The calculation used to determine the pay gap uses ‘white men’ as the control group. Negative numbers indicate pay gaps that favour ‘minority ethnic women’, positive numbers indicate pay gaps that favour ‘white men’.
The figures show that whilst most gaps are reducing, minority ethnic women experience the largest pay and bonus gaps.
Table 8: Combined gender and ethnicity pay gaps
| Intersection gender vs ethnicity pay gap | Median | Mean | ||
|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |
| Pay gap | 25.2% | 31.7% | 29.1% | 32.8% |
| Bonus gap | 31.1% | 33.3% | 27.4% | 24.7% |
These gaps are largely driven by the higher concentration of minority ethnic women in more junior roles and the higher concentration of white men in more senior roles. The number of included individuals will also influence these numbers - 786 minority ethnic women compared to 1,268 white men (38% and 62% respectively of the relevant population).
Table 9: Declaration rates for gender and ethnicity
| Declaration | Women | Men |
|---|---|---|
| Minority ethnic | 786 | 539 |
| White | 1214 | 1268 |
| Undeclared | 242 | 295 |
| Total | 2242 | 2102 |
When comparing the 2 years, there has been an improvement in the median and mean pay gap and an improvement in the median bonus gap. The mean bonus gap has increased.
6.5. Ethnicity by contractual grade
We've been more transparent by breaking our ethnicity pay gap down further into the UK census ethnicity categories.
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Data table
*Where there are fewer than 6 people an asterisk is used to avoid identifying individuals.
The calculation used to determine the pay gap uses ‘white (equivalent grade)’ as the control group. Positive numbers indicate pay gaps that favour ‘white (equivalent grade)’, negative numbers indicate pay gaps in favour of the relevant comparator characteristic noted under the ‘category’ heading.
Figure 13 shows the ethnicity pay gap broken down by contractual grade against the 5 Office for National Statistics (ONS) ethnicity categories for 2023.
The pay gaps follow a similar trend for ethnicity across the contractual grades. Collectively, the largest pay gap is noted in the Associate grade which has the greatest population.
The data shows that some of the highest pay gaps are among our black employee population. We have investigated this further by breaking down the largest of these gaps in the Associate grade (16%), by the 3 different levels of Associate, Senior Associate and Lead Associate as shown in figure 14.
Table 10: Employee numbers ONS breakdown and contractual grade
| Category | Professional Support | Associate | Manager | Technical Specialist | Head of Department | Director |
|---|---|---|---|---|---|---|
| Asian | 44 | 671 | 40 | 32 | 10 | * |
| Black | 28 | 261 | 11 | * | * | * |
|
Mixed/ Multiple |
13 | 120 | 12 | 10 | * | * |
| Other | 6 | 43 | * | * | * | * |
| Prefer not to say | 9 | 98 | 16 | 14 | * | * |
| White | 190 | 1616 | 342 | 221 | 79 | 30 |
*Where there are fewer than 6 people an asterisk is used to avoid identifying individuals
6.6. Pay gaps for the Associate grade broken down by the ONS categories
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Data table
*Where there are fewer than 6 people an asterisk is used to avoid identifying individuals.
Figure 14 shows the ethnicity pay gap broken down by the Associate grade for the ONS categories for 2023. The calculation used to determine the pay gap uses ‘white (equivalent grade)’ as the control group. Positive numbers indicate pay gaps that favour ‘white (equivalent grade)’, negative numbers indicate pay gaps in favour of the relevant comparator characteristic noted under the ‘category’ heading.
The Associate grade includes a wide range of roles, so this breakdown provides a truer reflection of the pay gaps within this very broad grade.
Table 11: Employee numbers by ONS breakdown within the Associate grade
| Category | Level 9 - Associate | Level 8 - Associate | Senior Associate | Lead Associate |
|---|---|---|---|---|
| Asian | 74 | 216 | 287 | 77 |
| Black | 36 | 98 | 97 | 24 |
| Mixed/Multiple | * | 35 | 60 | 15 |
| Other | * | 11 | 22 | * |
| Prefer not to say | * | 31 | 41 | 19 |
| White | 57 | 350 | 808 | 346 |
*Where there are fewer than 6 people an asterisk is used to avoid identifying individuals
6.7. Combined gender and ethnicity Associate grade pay gaps
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Data table
*Where there are fewer than 6 people an asterisk is used to avoid identifying individuals.
Figure 15 shows the pay gap broken down for minority ethnic women in the Associate grade for the ONS categories for 2023. The calculation used to determine the pay gap uses ‘white men (equivalent grade)’ as the control group. Positive numbers indicate pay gaps that favour ‘white men (equivalent grade)’, negative numbers indicate pay gaps in favour of the relevant minority ethnic women noted under the ‘category’ heading.
We have a high representation of women and minority ethnic colleagues in our Professional Support and Associate roles. With an additional breakdown of ethnicity by gender we can see the highest pay gap for black women at the Associate level.
Table 12: ONS breakdown of women within Associate grade breakdown
| Category | Level 9 - Associate | Level 8 - Associate | Senior Associate | Lead Associate |
|---|---|---|---|---|
| Asian | 47 | 113 | 156 | 47 |
| Black | 21 | 74 | 64 | 20 |
| Mixed/Multiple | * | 23 | 35 | * |
| Other | * | * | 12 | * |
| Prefer not to say | * | 18 | 13 | 10 |
| White | 34 | 195 | 349 | 158 |
*Where there are fewer than 6 people an asterisk is used to avoid identifying individuals.