Why Ryanair’s gender pay gap report is my favourite.

Ryanair has the largest (verified) gender pay gap of any employer in the UK, they didn’t bother to report their 2019 pay gap, they are leaving their 2020 pay gap reporting to the last minute, it’s pay gap narrative is only 1 page, they incorrectly use pie charts to represent the pay gap and they have a dodgy bar chart the Liberal Democrats would be proud of! But apart from all that, Ryanair’s gender pay gap report is a shining example that all other employers could learn from. Out of the hundred plus pay gap narratives I have read so far, Ryanair’s is my favourite.

Why I write these case studies

My case studies explore good and bad practice with gender pay gap analysis and highlights what can be learned from them. Closing a national pay gap can only happen if change happens within individual employers in the first place. In the front line of such change will be the HR department who in my experience find basic statistics a struggle and so I hope they find these case studies illuminating.

“Life on Mars“, – I work out how much variation in gender pay gaps can be expected by chance. I then show that the variation in pay gaps across the 4 UK subsidiaries of my former employer Mars UK was within the bounds of chance and that in effect they had no gender pay gap. Based on my experience of working there, I explored some of the reasons why Mars did not have a pay gap.
“The good, the bad and the Unilever“. I looked at the two legal entities of Unilever who are required to report their gender pay gap and noticed that the year on year changes between 2017 & 2018 looked odd. I used them as an inspiration to explain how one can spot if year on year changes are plausible or not.
The effect of Samira Ahmed winning her equal pay claim against the BBC and what impact it would have on their gender pay gap. Confusion abounds over the difference between unequal pay and gender pay gaps and I showed that the impact of Samira winning the case could be to widen the pay gap instead.
“What is the gender pay gap at Novartis UK“. Novartis perfectly illustrate the hazard of Simpson’s paradox when analysing pay gaps where employees simultaneously work for an employer with a gender pay gap favouring women and a gender pay gap favouring men.

In this case study, I explore the purpose of an employer’s pay gap report and show how Ryanair mostly fulfill this purpose in less than half a page.

Ryanair’s gender pay gap in 2017 & 2018

In 2018, the median woman at Ryanair Ltd earned 36p for every £1 earned by the median man, an improvement on 2017 when the median woman earned 28p. As far as I can tell, Ryanair has the largest verified gender pay gap of any employer in the UK. By verified, I mean that the published pay gap looks to be correct.

There are 20 or so employers with supposedly larger pay gaps but all of these are either all-male companies which forces them to enter 0p for the median woman or the employer has clearly or very probably made a mistake. For example, the Royal Hospital School in 2019 reported the median woman earns 25p for every £1 earned by the median man but when you read their report you find that the median woman earns 25p less than the median man (assuming he earns £1).

The graphic here for Ryanair shows the large pay gap must be due to there being no women in the top hourly pay quarter and less than 20% in the upper middle pay quarter. On the other side, women make up the majority of employees in the lower pay quartiles.

So what do Ryanair have to say about their gender pay gap in their report? I will start with what’s bad about their report, what I think is good and finish with recommendations for improvement. Both the 2017 & 2018 reports used the same 1 page downloadable PDF format and I will concentrate here on the 2018 report.

Ryanair’s 2018 Report – The Terrible

Here is a shot of the bottom half of the 1-page PDF download which displays the numbers Ryanair are required to calculate and report by law.

The crimes against good data visualisation that Ryanair are guilty of are :-

Using a pie chart to denote hourly pay & bonus pay gaps. They are not alone in doing this but it should be obvious to anyone that pie charts cannot be used when the % scale can be negative or greater than 100%. The mandatory calculation of a pay gap (which I dislike, see point 1 of this link) means that a pay gap favouring men has to be a positive number between 0% & 100% but a pay gap favouring women is a negative % which can and does exceed -100% and can in theory be minus infinity. A second issue with pie charts is that most people associate 100% as being “good” but for pay gaps, it is 0% that is “good”.
Using pie charts to denote % of men & women receiving bonuses. Pie charts represent proportions of a total so the use of the pie charts here is not necessarily wrong. However, statisticians rarely use pie charts especially when the goal is to compare proportions i.e. how big a difference is there between men and women. The simplest way to do this is to have 2 bars side by side on a 0 to 100% scale as shown here.
It’s Pay Quarters not Quartile Bands. The bottom right hand chart above is a proper layout for this kind of data since you are comparing pay quarters. Of course, Ryanair is incorrectly calling these quartiles instead of quarters but in their defence, Parliament made the same mistake in the 2010 Equality Act. Quartiles are of course the boundaries between quarters. Unlike their other 3 charts, no explanation is given of this chart and you have to know what it is representing.
Using pie charts in the first place. In my 30+ years experience of working with non-statisticians from many industries and all business functions, I have found when someone defaults to a pie chart, more often than not that is a clue that the person who did the chart didn’t understand what they were doing. Again Ryanair will not be alone in doing this.

I finish the Terrible by noting that the 2018 report is their latest. Ryanair never bothered to submit 2019 data and they have yet to publish 2020 data.

Ryanair’s 2018 Report – The Outstanding

Here is the top half of the 1-pager which I think is brilliant.

What is the purpose of an employer’s pay gap report? For me, it is the employer’s chance to explain and own the following narratives –

How they operate today
Why they have a pay gap today
What plans they have to address this
What barriers/constraints have to be overcome to make progress
What is a realistic timetable for progress within the current framework of employment law
What has worked so far in closing their pay gap

How well does Ryanair’s half pager capture the 6 narratives?

1. How they operate today – The gender pay gap regulations only applies to employees who come under UK employment law. Ryanair is an Irish airline with operations in many countries. In the very first paragraph, they state the only employees to come under the regulations are pilots and cabin crew based in the UK. They point out that their head office and administrative operations are based in Ireland.

Suppose that first paragraph had been the entire report, would you now expect a pay gap at Ryanair UK? Of course you would! How many pilots have you heard making announcements on flights you’ve taken have been female? How many of the cabin crew that have served you have been male? Do pilots earn more than cabin crew? Of course they do but are you bothered by that? Probably not, since the pilots bear the greatest responsibility for your safety.

So in pointing out how they operate, they immediately give you information that pretty much tells you they will have a pay gap, what the reasons are for this and that changing this is going to take some time. Ryanair’s economy and efficiency in conveying what you need to know is excellent.

2. Why they have a pay gap today – We already expect them to have a pay gap following the first paragraph but they follow up with a few numbers that tell the entire story even better.

This is the winning bit for me that renders the terrible bottom half irrelevant and makes their report outstanding. Yes, there is a dodgy bar chart (689 v 15?!?) that the Liberal Democrats would be proud of (google “Lib Dem bar charts” for some fun!) but the numbers are the important bits here.

Ryanair give us a succinct set of raw numbers that tell me the following.

Their UK gender ratio is effectively 2 to 1 male to female.
If each role had the same gender ratio of 2:1 M:F and the total number of employees does not change then Ryanair would have –
- 235 female pilots not 15.
- 233 female cabin crew not 465.
- 16 female other roles not 19.

Thus the Gender Swap Number (please read if you have not heard of this before) for pilots is +220 i.e. assuming the same number of pilots in the future, the first and completely necessary step needed to eliminate the gender pay gap at Ryanair is for 220 male pilots to be replaced by 220 female pilots.

Similarly the GSN for cabin crew is -228 i.e. assuming the same number of cabin crew in the future, 228 female cabin crew need to be replaced by 228 male cabin crew.

Lastly, the GSN for other roles is +3 i.e. if there continues to be just 48 other roles based in the UK, 3 male employees need to be replaced by 3 female employees.

If you have still not read my Gender Swap Number article linked above, it originates from the underlying mathematics of the median gender pay gap. I have repeatedly explained in a number of articles (See B2, B6, C4, E3 from this link) that a pay gap is only truly closed when you see the same gender ratio in every part of the employer’s departments and pay scales. The GSN tells you how much work you have to do to achieve this state of affairs hence why it is so useful. By providing the raw data by type of role, Ryanair were in effect giving you their gender swap numbers. They may not have realised they were trailblazing here but the sheer economy and succinctness of the numbers provided and what they imply is why they get an outstanding from me and why other employers should seek to emulate them.

Do I need to know any other statistics about Ryanair’s pay gap? Some people incorrectly believe that gender pay gaps are measurements of unequal pay. If you are such a person, please read my article “Unequal Pay & Gender Pay Gaps are the not same thing” before going any further. However, employers should be doing equal pay analysis in addition to gender pay analysis and Ryanair start their pay gap report in the very first sentence by stating “Ryanair is an equal pay employer …“. If you’re going to make such a definitive statement you should provide evidence to back it up which Ryanair did with this statement.

On its own, it may not be enough but the emphasis on all employees in the UK being covered by collective bargaining agreements is quite notable. I have to confess when I’ve thought about how an employer can verify equal pay compliance, my first thought has always been that pay systems are less susceptible to equal pay issues than individual pay. Until Ryanair pointed this out, I had not thought of collective bargaining as a tool for ensuring equal pay compliance. After all, suppose an equal pay case was successful against Ryanair, then the employees’ representatives who negotiated this pay system on behalf of all employees will be just as responsible as the management. The point is Ryanair has clearly stated what their mechanism is for ensuring equal pay compliance and this is actually quite rare to see in reports from other employers.

3. What plans they have to address their pay gap – None are stated, all we get is the statement shown here. There is a bland commitment to reinforcing trends they see as welcome e.g. doubling number of female pilots from 8 to 15, but there are no details. So this is a gap to be addressed.

4. What barriers/constraints have to be overcome – The statement above states there is a global shortage of female pilots in the first place which is correct. I asked earlier how many announcements from pilots have you heard over the years from a woman and in my experience it is probably less than 1 in 20. I don’t know what proportion of pilots in the UK are female but Ryanair’s 1 in 47 sounds on the low side. Is that why Ryanair didn’t put some numbers in their pay gap report to show how they compare with their competitors because it would look bad?

Actually, I am not a fan of employers benchmarking themselves in their pay gap reports. It’s fine to do it in passing but frankly an employer’s pay gap report should be focused on themselves not others. I’ve repeatedly said that the pay gap analysis is a Continuous Improvement tool not a league table exercise. Employers should not be patting themselves on the back for being in the top 10% of their industry. they should be focused on what they want to achieve and explaining how they intend to get there. I have to say, Ryanair have never struck me as an airline that wants to be the same as their competitors and I sense the same attitude coming through in their pay gap report. In which case I commend them for not comparing themselves directly with competitors but that doesn’t let them off the hook regarding point 3 above on future plans.

5. What is a realistic timetable for progress – Ryanair’s gender swap number for pilots is +220 if their gender ratio goal is 2:1 M:F. If their goal was 9:1 M:F the GSN would be +55 and if 19:1 M:F, GSN would be +15. The latter two sound more realistic given the lack of female pilots globally and in the pipeline but neither of these come anywhere close to eliminating their pay gap.

Since Ryanair have not stated what their goal is, it is not surprising there is no statement of timescale for progress. I do think though that nearly everyone vastly underestimates how long it will take to make progress on a gender swap number. I explain this in some detail in my article “Eliminate your gender pay gap by playing Blackjack” which includes a spreadsheet you can download to check my calculations.

6. What has worked so far – Ryanair state that the number of female applicants are increasing and the number of female pilots has doubled (from a low base admittedly!) Do Ryanair know why this is the case? Have they been doing something that contributed to this outcome? If so, they should say so. After all, they state they are committed to continuing this growth which implies that they have a process that is working and intend to stick to so why not tell the world what this is? For me, this is the ultimate purpose of the pay gap report, sharing with the world what has worked for you.

Ryanair’s 2020 Narrative – How to Improve

I’ve given an outstanding for the pay gap report because it turns out to be a prototype of my Gender Swap Number concept. Swap numbers work for any protected characteristic including ethnicity or disability and I am recommending that the government switch pay gap reporting to focus on pay fingerprints and swap numbers in future. Until that happens, any employer wishing to base their pay gap analysis on swap numbers can use Ryanair as an example.

When I compare their 2018 report against the 6 narratives I listed earlier, I find on points 1,2 & 4, Ryanair’s report is excellent at diagnosing what is the state of play today and how much work is needed going forward. On points 3, 5 & 6, they give hints but ultimately they need to do more on their goals, plans & timescales. I am a fan of the 1-page downloadable format and I do like the fact that the whole thing has a heavy Ryanair brand and stamp on it. That signals to me that Ryanair want to own their pay gap narrative, not hide it away. Given that the bottom half of the 1-page PDF download is terrible, I would delete what’s there and replace it with their goals, plans and timescales which is currently missing.

My recommendations for improvement are –

Publish their 2019 & 2020 pay gaps now.
Put in their report how many cabin crew are employed by agencies. This is a well known practice and Ryanair are allowed to exclude agency staff from their pay gap calculations but if they were included, their pay gap would be larger. Ryanair operate a fleet of Boeing 737-800 aircraft with 189 passengers, 4 cabin crew and 2 pilots. Assuming similar working hours, the reported number of cabin crew employed by Ryanair is probably only half of the cabin crew you will actually see on a Ryanair flight.
Put the statutory pay gap calculations on a page on their website (which is required by law) rather than in the PDF download. This is the bottom half I’ve criticised as terrible and gives you little information on what is happening at Ryanair.
Keep the top half of the PDF as is subject to adding the point about agency workers in the 2nd paragraph and putting a separate line in the tables showing numbers for Cabin Crew (agencies). I’m sure Ryanair won’t mind adding something witty about the bar chart following Lib Dem best practice!
Replace the bottom half of the PDF with a clear statement on what their goal is going forward, what actions they intend to take and what timescales are realistic.

I started out by apparently criticising Ryanair for only having 1 page for their pay gap report but in fact I would praise them for this. Why should a pay gap report be 20 pages long and tell you nothing meaningful? Ryanair should make it a virtue to summarise their goals, plans and timescales in half a page so what might this look like?

Ryanair’s gender swap number for pilots is +220 and for cabin crew is -228. Assuming that the lowest paid pilot still earns more than the highest paid cabin crew, Ryanair could eliminate their pay gap by asking 220 male pilots to swap jobs with 228 female cabin crew and job done! Of course that is not going to happen.

If Ryanair conclude that there is no realistic prospect in the foreseeable future of the gender ratio of cabin crew being the same as pilots, then Ryanair will never be in a position to eliminate their pay gap. In that case, the only goal open to them is to continuously increase the number of female pilots they have up to some realistic level given current pipelines of female pilots in the industry. Their report should state what they consider to be realistic and how long they expect this to take.

If the industry has a structural problem with attracting women in the first place, then Ryanair need to decide whether changing this is something they can do on their own or whether it requires industry collaboration. I suspect it requires the latter but I could be wrong. Either way, Ryanair should decide on one or two actions that it wishes to test out and measure how well they work.

Too often, I see employers list a whole range of ideas they intend to pursue but I wonder if having too many leads to lack of focus on any. By focusing on a new action each year and reporting how well they have worked, as the years roll by, an employer will build up a list of what is working so far and what has not worked. That is the ultimate purpose of a pay gap narrative for me, it is the employer’s opportunity to tell the world what has worked for them. Everything else is simply a lead up to this point but to get to this point, employers need to correctly diagnose their pay gaps in the first place, decide what their goal is, put an action plan together and then monitor results. Only then will their pay gap reports be worthwhile reading.

What is Ryanair’s response?

I will be asking Ryanair to comment on this article and will post their response here if I receive one.

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