The gender pay gap in accounting – some analysis

The gender pay gap in accounting - some analysis

CM Murray's partner and general counsel Beth Hale and Zulon Begum, partner, look at the meaning behind the gender pay gap figures reported in the accounting industry

The gender pay gap in accounting – some analysis

The second year of gender pay gap reports have now been submitted by all employers with 250 or more employees. The government website indicates that over 11,000 employers have filed their reports. Analysis of the data done by the BBC suggests that 78% of UK businesses who have submitted reports have a pay gap in favour of men, while only 14% reported a “reverse” pay gap – in favour of women.

What are employers obliged to report?

The Gender Pay Gap Reporting Regulations came into force in April 2017 and the first reports were published in April 2018. The latest reports cover the year up to 5 April 2018. The regulations require employers to publish statistics on the difference between mean and median hourly pay and mean and median bonus pay as between men and women, as well as the percentage of men and women who receive a bonus and the number of men and women in each of four pay quartiles.

There is no obligation on employers to provide a narrative or explanation for the figures they publish. An overwhelming majority of employers chose to do so, and many set out measures they were taking or planning to take to address the gender pay gap, including female career progression programmes or increased flexible working arrangements.

What about the partner pay gap?

Although the regulations do not require businesses to publish the gender pay gap at partner level (partners are expressly excluded from the obligation), there was significant criticism of the Big Four when they did not do so in 2018. This year, they have all voluntarily published their partner pay gap as well as a “total earnings gap” which includes the pay of employees and partners.

What are the issues in professional services?

In accountancy – as in other professional services – the problem tends to be with promoting and retaining women, rather than bringing them into the profession in the first place. Graduate schemes are often split 50/50 between the genders, but the number of women reduces steadily as employees get more senior, and the numbers drop off dramatically at partner level. There are a number of factors which contribute to this – including lack of flexible working arrangements and unconscious bias.

Another issue in professional services – and one which is perhaps harder to overcome – is that there tends to be large proportion of women in support functions such as secretarial roles which are typically paid less well than client facing roles. Encouraging men into support roles is not often discussed but could have a positive impact on pay gap figures.

Why has the pay gap worsened for some employers?

While overall, the median reported pay gap reduced slightly by 0.1% (from 9.7% to 9.6%), there were a large number of employers (approximately 45%) who reported an increase in their gender pay gap. While this is disappointing, it is not entirely surprising and there are several possible explanations.

Firstly, it’s important to remember that the data published now relates to the period up to 4 April 2018. The measures that many employers described in their previous reports had either not been implemented at the “snapshot date” for the latest reports or had not had time to have any meaningful impact. For example, KPMG (whose pay gap has worsened) have said that many women have joined since April 2018 following a push to improve diversity in the firm and were not captured in the latest figures.

In addition, part of the solution to the gender pay gap lies simply in recruiting more women into the workplace. Inevitably, much of this recruitment will happen at a junior level – and, of course, there is then an onus on employers to promote and retain those employees. Increasing the numbers of women at a junior level within a workforce will, in the short term, increase the gender pay gap for that employer. Genuine change takes time to implement. The introduction of mandatory gender pay gap reporting has had a huge impact on the public awareness of the issue and will, hopefully and eventually, start to have a similar impact on the figures themselves.

 

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