Nest outlines path to closing pay gaps in latest reports

Nest has made a long-term commitment to increasing diversity and inclusion and has compiled and published its latest ethnicity pay data alongside its gender pay data. While the reports show progress continues to be made in most areas, it also identifies areas for further improvement.

Nest has changed the way this data is reported to bring it in line with the data published in the Corporation’s annual reports and accounts. Data from April is now published in June rather than at the end of March the following year. As a result, this year Nest’s pay gap reporting data covers two financial years, 2020/21 and 2021/22.

The data as of 31 March 2022 shows that while progress is being made as Nest works towards pay parity, there is still further to go as staff experience both gender and ethnicity pay gaps within the Corporation...

The median gender pay gap was 9.5% (or £3.07 per hour), a reduction of 1.4 percentage points from 2020/21, when the gap was 10.9% (or £3.41 per hour). The median ethnicity pay gap was 11.9% (or £3.79 per hour), a reduction of 1.3 percentage points from 2020/21 when the gap was 13.2% (and £3.99 per hour).

In 2021/22, the number of women working at Nest increased, with 52% of the workforce being women, slightly above the 51% of the general population of England and Wales. People from an ethnic minority background represent 27% of the workforce at Nest, compared with around 14% of the general population of England and Wales.

Nest has improved representation of employees from an ethnic minority background in senior roles, seeing a 5-percentage point increase of these employees in the upper-mid quartile roles between 2020/21 and 2021/22.

While improvements in representation have been made, women and people from an ethnic minority background are still over-represented in lower-quartile roles.

Commenting on the data, Helen Dean, Nest’s Chief Executive Officer, said:

“While I am pleased we’ve made progress over the past two years, we’re not going to become complacent. I have said I want Nest to do much, much better, and the data shows we’re still on our journey.

"At Nest, we work to create an inclusive environment where everyone, including women and people from ethnic minority backgrounds can progress and not be held back by bias or unfairness. We’ll keep finding new ways to do this, and we understand that there are areas where we need to improve.

"We’re on the right track. I’m encouraged to see Nest exceed our targets for representation of women in director-level roles, and for a gender-balanced workforce. This is another sign that the plans we have in place can and will lead to pay equality at Nest."

Nest’s Diversity Equity and Inclusion lead, Chief Financial Officer Richard Lockwood, said:

"We’re committed to reducing our pay gaps year-on-year and I’m proud of our clear plan to drive us towards our long-term goal of pay parity for women and people from ethnic minority backgrounds at Nest. I believe our continued focus on recruitment and development, and on building an inclusive culture where all employees can progress, will help us achieve this.

"Increasing our focus on staff development can improve representation in senior roles, which is key to closing our pay gap. It also makes good business sense. Nest will benefit from increased diversity of thought at every level."

Nest has been signed up to the Women in Finance Charter since July 2016 and has twice increased its commitment, from 30% to 50% of women in senior management roles. Currently 55% of Nest’s director-level roles are held by women.

The publication of ethnicity pay data is a recommendation made by the McGregor-Smith Review and while it is not legally binding, Nest hopes this practice will be adopted by the wider pensions industry.

As well as continuing its commitment to the Charter, and continuing to publish its ethnicity pay gap data, Nest will:

• Make progress towards diversity and inclusion targets and objectives. This includes continuing to exceed the target of gender parity in director-level roles, aiming for at least 30% of its executive team being women and at least 13% being from an ethnic minority background by 2025
• Set a target of having at least two Black directors by 2025
• Focus on development – Nest has introduced personalised training accounts to give employees greater control over their development
• Ensure each member of the executive team has a diversity-related objective, building an organisation which is inclusive by instinct, led from the top down
• Continue to provide training to recruitment managers that encourages the use of gender-balanced interview panel
• Build a comprehensive data infrastructure to better understand its workforce and how any barriers at Nest can be addressed, and to use this data infrastructure to review intersectional data and insight
• Continue to support the 10,000 Black Interns initiative
• Welcome feedback and challenge from the six working groups established for a range of protected characteristics including race and social diversity; LGBTQ+; and disability and neurodiversity
• Look for opportunities to improve diversity across the wider pensions industry – Nest is currently co-chair of the 30% Club, and signatory to the Diversity Project’s Asset Owner Diversity Charter

Further details of these and other actions Nest is taking can be found in our gender and ethnicity pay gap reports.

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