In the UK, it’s a legal requirement for all companies with over 250 employees to publish their gender pay gap. This is the first time we’re publishing ours, and we’ll continue to publish every year in April along with actions based on the findings. The data for this report includes all employees of Marshmallow Technology Ltd as of April 5, 2024.
What is a gender pay gap?
The gender pay gap is the difference in average earnings between men and women across a company, spanning all roles and levels.
The gender pay gap isn’t a measure of the difference in pay between men and women for doing the same job—that is known as equal pay. We’re confident that we don’t have an equal pay issue at Marshmallow.
We have structured job levels and salary ranges for every role, and use a robust performance review and salary review process twice a year to make sure people are being fairly rewarded based on performance.
We are required to report on gender pay gap data across three key areas: pay quartiles, hourly pay and bonus pay.
Quartiles
To help us understand pay distribution between men and women at different levels across the company, we’ve divided our workforce into four equal quartiles, from the lowest to the highest earners.
The data below shows that we have a greater percentage of men in the upper and upper middle quartiles, and more women in the lower quartile.
Hourly pay
Looking at the hourly data, there is a gap in both mean and median pay. The gap in hourly pay is largely due to the fact that we have a higher proportion of men in Product, Tech and Senior Leadership roles, where salaries are typically higher.
Bonus pay
We then need to look at the same figures for bonuses. At Marshmallow, the annual bonus scheme is performance-based, linked to both company and individual performance. The figures below also include referral bonuses. We have a flat fee structure for these bonuses regardless of role or job level.
Despite a high proportion of both women (73.95%) and men (69.78%) receiving bonuses in the 12 months before the snapshot date (5th April), there’s a gap in the average amounts. The data below outlines the mean and median bonus figures, highlighting a bonus gap:
One of the main reasons for the bonus gap is that our annual performance bonus is structured by job level, with those at higher levels being eligible for a higher percentage of their base salary as a bonus. As shown in the quartile section below, we have more men in the upper quartiles, meaning that our bonus pay gap is more prominent.
Why do we have a gender pay gap?
Our gender pay gap is mainly driven by the following three factors:
1. There are fewer women in our Product and Tech org
Product and Tech is the area in the company with the strongest presence in our upper pay quartile, accounting for 60% of employees there. However, these teams at Marshmallow are predominantly male (70%).
2. There are fewer women in our highest level roles
Marshmallow’s Senior Leadership Team is predominantly male, and there are also currently more men in our higher level roles.
3. There are more women in Operational roles
We have a high volume of lower level roles in our operational teams, which generally attract lower salaries than some other areas of the business. We have a higher proportion of women in these roles, which contributes to our overall pay gap.
What are we already doing?
Pay at Marshmallow is grounded in market data, and based on role, skills and level of experience. This is thanks to a set of processes we use to drive fair pay decisions:
Transparent, data-led salary ranges
In 2022, we brought in structured salary ranges using market data to drive fairer pay decisions based on role, skills, and experience. By basing pay decisions on these factors, we avoid individual negotiation tactics or spot rates which can lead to equal pay issues. Last year, we also started our journey to full salary transparency, with the aim of making salary ranges visible to everyone across the company by the end of 2025
Calibration and performance ratings
Our performance calibration makes sure that decisions about performance ratings are more consistent and fair. This leads to fairer salary, bonus and promotion outcomes.
Hiring training
We train hiring managers on best practices to help to reduce bias in hiring.
How will we address our pay gap going forward?
At Marshmallow we set out to attract and retain exceptional people, and create opportunities for everyone to learn, grow and progress. Based on the data above, there are key areas we need to focus on to address our gender pay gap. This year we’ll:
- Invest in diversifying our tech talent pools
- Invest in developing female talent
- Create clear development pathways for lower level roles
Invest in diversifying our tech talent pools
The higher proportion of men in our Product and Tech roles is one of the key reasons for our pay gap. We have big ambitions as a company, and with that in mind we’ll continue to hire at pace over the coming year. However, we want to be more intentional about the talent we’re attracting, with the aim of diversifying our candidate pools. This year we will:
- Invest time and money into diversifying the top of the funnel
Particularly in Engineering and Product where our pay gap is more pronounced. We’ll do this by building a presence on specialist networks and platforms, alongside active sourcing.
- Develop our employer brand
We need to ensure we really understand our different audiences from a talent attraction perspective, and plan to approach those audiences with content that will resonate. We’re already investing in Engineering and, alongside a general effort to attract top engineering talent across the board, working closely with our internal Women in Tech Community to understand how we can better attract female talent in our tech roles.
Invest in developing female talent
One of the key reasons for our pay gap is that we have fewer women in our most senior roles. To work on this, we want to use our biannual Talent Review process to think about how to develop and promote more women into senior roles.
We believe that by creating more role models across the organisation and bringing more diversity of thought into our leadership teams, we’ll make Marshmallow an even better place to work.
This doesn’t mean that we’ll only promote women, but we will invest more than we currently do in developing female leaders in areas where they are currently underrepresented.
Create clear development pathways for Customer Operations and Claims
Another key area contributing to our pay gap is the higher proportion of women in lower level operational roles.
Responding to feedback from our internal engagement survey, we’ve already committed to outlining clearer career pathways for our Operational roles, with the aim of nurturing and retaining more great talent in these areas. As we have a higher proportion of women in these roles, this should lead to more of our women progressing to higher levels in the company.
Conclusion
The data above shows that we have work to do to close the gap. We’ll keep holding ourselves accountable by reporting on our gender pay gap every year, and will commit to actions that we believe will drive long term improvements.
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