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Gender Pay Gap Reporting

In April 2018 UK companies with more than 250 employees were required to report on their gender pay gap. This involved carrying out six calculations that show the difference between the average earnings of men and women in each organisation. Due to the global impact of Covid the Gender Pay Gap reporting for 2019/2020 was postponed and the new deadline was moved to 5th October 2021.

The data for this analysis was taken from a snapshot date of 5 April 2020, the last report was submitted in 2019. Therefore, we are now 2 years on from the first report in 2018. In the past 2 years, our associate count has dropped to 553 currently from the 812 associate count that formed the basis of our 5 April 2020 Gender report.

At Build-A-Bear Workshop, our Mission is to ‘Add a Little More Heart Illustration to Life.’ As such, our core Values put people at the heart of what we do. The past year has seen this message driven even further through our strategic goals and the evolution of our core values - we are committed to treating everyone fairly, by valuing the diversity, individuality and background of all associates, Guests and business partners irrespective of their background, and to giving associates opportunities for development based on performance.

The Gender Pay Gap analysis results:

On average, men were paid 7% more than women, with the average pay per hour recorded as £7.73 vs £7.17 for the women.

Please note the hourly rate is lower than the National Living Wage set out for 2021, due to the timeline set for this Gender Pay Gap report with resulted in a 5 April 2020 measurement date while as per Coronavirus Job Retention Scheme, the NMW changes were not added until later when employees returned to the workplace and were working. Another consideration is the group of employees used in the reference group. For Build-A-Bear Workshop the full pay relevant employees are the hourly paid employees. As per Full-pay relevant employees are all employees who are employed by the employer on the snapshot date, and: are paid their usual full basic pay (or pay for piecework) during the pay period in which the snapshot date falls (the relevant pay period).

The Mean (Average) gender pay gap was 7% at 5 April 2020 vs 20.99% for 5 April 2018, i.e. reduced by 13.99%. In other words, nearly two-thirds of the gender pay gap that existed in 5 April 2018 was eliminated by 5 April 2020. The Median (Mid-range) gender pay gap was 21% as at 5 April 2020 vs 5.75% for 5 April 2018

The guidelines for this Gender Pay Gap report were based on relevant employees that were paid full pay as of the measurement date. For Build-A-Bear Workshop, the eligible employees are hourly paid which resulted in the 7% mean gender pay gap, a 13.99% reduction from the gender pay gap that existed at 5 April 2018. The majority of the employees in this category are paid based on the National Minimum Wage set by the Government. The 21% median gender pay gap is a result of factors such as bonus payments - for the relevant period ended 5 April 2020, bonus payments were made only to store employees and one male Director in head office who was eligible for a Long Term Incentive. If we were to review this over a different period that did not include the impact of Covid, store closures, furlough and pay reductions, along with the circumstance that only one associate in our Head office received a bonus payment, the differential would likely be less.

Another factor that contributed to the gender pay gap was the change in Head office head count and the proportion of male representation in our small senior leadership team at Head office. Although the senior leadership team has four people who are split equally based on gender, the level of seniority differs which results in a gender pay gap. Of the four senior leadership team members, 50% are female and 50% are male and there are three are Directors and one Manager. Because the team size is so small the fact that one of the team members who is female is a Manager while the other three team members are Directors, plays a significant role in the differences in full pay package, which includes bonus payments and the salary.

Another reason for the gender pay gap is the classification of the relevant and full pay relevant employees. All salaried employees were furloughed due to Covid meaning the figures for the 5 April 2020 gender pay gap calculation are predominately based from the hourly paid employees. As per the guidelines of the Coronavirus Job Retention Scheme, we paid out employees 80% of their wages which meant they wouldn’t be classified as full pay relevant employees. Furthermore, for cash preservation purposes all Head Office employees who weren’t furloughed took a 20% reduction in hours which resulted in their pay being reduced by 20%. Based on the requirements on how to calculate the gender pay gap, the relevant employees all had a pay reduction versus the full pay relevant employees who were hourly paid.

From a holistic perspective as part of a global business we are proud to say that the Board of Directors of our ultimate parent based in North America is 40% female, and the President and CEO (and highest paid employee) of our ultimate parent company is female. In fact, 50% of the C-Level employees of our ultimate parent company are female.

Our largest proportion of employees are Bear Builders (Sales Assistants). This group of employees accounted for 90% of our total headcount. At 5 April 2020, the gender split of Bear Builders stood at 87.5% female and 12.5% male consisting of 441 female and 63 males.

The median pay gap is (21%) which demonstrates that despite the top earners in the company being male, the mid-point hourly rate for males and females only varies by £0.45.

Pay quartiles as of 5 April 2020:

Band Females Males
Upper Quartile 87% 13%
Upper Middle Quartile 91% 9%
Lower Middle Quartile 83% 17%
Lower Quartile 94% 6%

The Bear Builders are paid consistently based upon pay ranges which is also determined by location, store size irrespective of gender.

To put the pay quartiles into context, on 5 April 2020 the total headcount across the organisation stood at 85% female and 15% male.

Therefore, females represented a large proportion of all the pay quartiles.

The Gender Bonus pay analysis results:

For the 5 April 2020 measurement period, the gender split of employees who received a bonus was:

23% of females received a bonus
40% of males received a bonus

The difference in bonus pay was:

57% Mean (Average) gender pay gap
32% Median (Mid-range) gender pay gap

On average, men received a 57% higher bonus payment than women and, the median bonus payment for men was 32% greater than for women

Based on the Gender Bonus Pay analysis, males were more likely to receive a bonus and on average earned a 57% higher bonus than their female counterparts. It is noteworthy that at the time the data was taken because only store bonuses were paid out, there were only a limited number of job roles eligible for a bonus. During the pay period analyzed, only one head office employee was paid a bonus which was a result of his Long Term Incentive payout that vested in the reference period. Within the past year we have introduced store-wide incentive schemes designed to encourage more applicants to join retail and which are expected to increase the earnings potential for our team members.

Retail continues to attract employees who require flexibility and want to balance employment with education or other personal commitments. We were already aware that our core customer-facing employees, Bear Builders, are predominantly female, but this analysis has highlighted the significant variance. We know this pattern is mirrored across the retail industry at large, but specifically is more notable at Build-A-Bear Workshop, as our brand is generally a more attractive place of work for females due to their familiarity with our brand.

Our challenge continues to be encouraging male applicants to join our Bear Builder population and to encourage increased representation of females in leadership roles. We aim to increase the number of female leaders by working closely with our female employees on their development plans in order to identify our future leaders.

This whole process is imbedded within our annual performance review programme as we continuously look at ways to balance our representation of males and females across all levels.