Salary survey: Banging their heads against the FD ceiling

This autumn’s Accountancy Age/Robert Half Finance and Accounting salary survey has revealed a gaping chasm between the prospects of women and men.

Graph: Salary survey October 2003

Graph2 : Salary survey October 2003

Startlingly, women were more than twice as likely as men to be stuck in the lowest income bracket of the profession, earning below £25,000 a year.

The division seems to exist on every level, including promotion prospects, and even the benefits they can expect to enjoy.

For example, the survey suggests that men are more than twice as likely as women are to have a company car at their disposal. About 23% of male respondents drive a company car, compared with just 11% of women.

But rather than a ‘glass ceiling’, the term normally used to describe the invisible artificial barrier that blocks women from attaining senior executive positions, it’s more a case of a ‘financial controller’ ceiling.

Of those who felt there was a culture within their company that hinders promotion opportunities for women, some 47% said the ceiling existed from the financial controller level upwards.

Sandra Burling, partner at Deloitte, who sits on the Deloitte board, says: ‘It’s in our best interests to develop all of the people to the best of their ability. If you were to start with an intake of 50/50, you would expect that the partner intake would be 50/50.’

But perhaps we should consider how far accountancy has come. In the sixties, it was a profession almost entirely populated by men.

Back then, and a long time before the Two Ronnies produced their spoof The Worm that Turned, women were just expected to do the secretarial work.

But despite some slow progress, women’s prospects are still not as they should be if there is to be a truly level playing field. Our respondents’ perception of a glass ceiling from the financial controller level was backed up by indisputable salary figures. They reveal a dramatic bias towards men for higher income levels.

Men were almost twice as likely as women to earn more than £50,000. The trend continued into higher salary levels, with men five times more likely to earn more than £70,000 a year.

Deloitte’s intake levels are not quite at the 50/50 level yet. Its intake is currently around 45/55 in favour of men, although Burling believes the intake is closely reflecting the spread of applications.

‘If you’re a woman and you look at the top accounting firms you don’t see many women running them,’ says Burling.

Part of the problem could be simply getting top management to recognise there is a problem. Some 89% of partners and 82% of FDs responded that they did not feel there was a culture hindering promotion opportunities for women in the company.

This was far higher than any other category of respondent. For credit controllers, for example, the proportion was 55%. Interestingly, tax seems to be the biggest problem area for women, with 43% working in this area saying there was a culture problem within their firm hindering female advancement.

Even if society has turned its back on ‘fifties’ attitudes, the fact remains that there still seem to be more men than women applying to be accountants. This clearly needs to be addressed if the industry wants to present itself as an equal opportunity employer.

The survey also revealed that men and women tend to have very different career aspirations once they get into the accountancy profession. Women (11%) were almost twice as likely to favour working in an accountancy practice than men. Perhaps revealing the more caring side of women, the charity and voluntary sector was also a leading choice for women. They were also twice as likely to favour the public sector as their ideal career choice.

However, when it comes to climbing that next rung of the accountancy ladder, the odds seem stacked against women.

The enormous divide between the sexes in accountancy cannot be explained away by the trend of women leaving the profession after having children.

‘There’s more men that come to us than women, but I don’t think that factor explains the big difference between the number of women who are partners versus the number of men,’ says Burling.

‘I’ve got three or four women who are either on or just come back from maternity leave.

‘One or two of them have come back and they’re working three or four days a week. Whether someone takes six months or a year off, I don’t think it really matters.’

In June, Accountancy Age revealed that just one in 10 partners within the Top 50 firms were female – findings that were quickly seized by the Equal Opportunities Commission as evidence that the profession needs to do more.

The Accountancy Age research revealed that Smith & Williamson, with 15%, had the highest proportion of female partners of the top 10 firms. Pricewaterhouse-Coopers, for example, had only 8%.

Five of the 40 accountancy firms prepared to reveal the gender split had no female partners at all. While top 10 firm PKF refused to reveal the gender of its partners.

But as a recent survey from Datamonitor highlighted, it’s not just the accountancy profession that’s at fault. The UK average income for women was 64% of men’s average income – the worst pay gap in Europe.

Figures from the government’s new earnings survey show that the average gender pay gap is 19% among UK workers and 30% among managers.

The gap among financial directors continues. Helen Weir, finance director of Kingfisher, became the FTSE100’s highest paid female executive last year with earnings of £1.2m.

Weir is very much an exception. Male finance directors earn an average of 20% more than female FDs, nearly twice as high as the gender pay gap among auditors, where its 11%.

At the higher levels where the glass ceiling in accountancy is perceived to exist at the controller level, the gender pay gap is 18%.

Under new rules that came into effect this year, staff are entitled to submit a questionnaire to establish whether a direct colleague of the opposite sex is being paid more.

Any employee can name a specific colleague who does a job of equal value, though not necessarily the same job.

If an employer gives an evasive answer or fails to respond to the questionnaire within eight weeks, employment tribunals may be entitled to infer unequal treatment.

Lawyers are forecasting a rise in pay claims on the basis of sex discrimination.

In August, City analyst Louise Barton agreed to settle with Investec for an undisclosed sum, ending one of the longest running sex discrimination cases the City has known. She had been outraged to discover that Mathew Horsman, a former journalist at The Independent, was earning bonuses of up to £1m while she was receiving £300,000.

Encouragingly, the latest Accountancy Age research reveals that once in the profession, women are not treated any worse than men. In fact, the women surveyed were on balance slightly more satisfied with accountancy than their male counterparts.

However, the figures suggest general discontent with the profession.

If they could have any job, only 33% answered affirmatively that they would still be accountants.

While levels of satisfaction suggest women are not having a worse time than men in the workplace, 60% of women would do something other than accountancy compared with 64% of men. The figures show that even accountants would like a bit of a change. The daily grind is notably worse for those in payroll, with 77% saying they would do something else.

And the survey showed that pay is not necessarily the panacea, with most high-earning partners and FDs (57% and 56% respectively) also stating they would go and do something else.

When asked whose job they would most like to have, Richard Branson was the most popular answer in the survey at 42%, and the response was broadly similar for both men and women.

Unsurprisingly, 17% of women would go for Victoria Beckham’s career, while 24% of men wanted to fill David Beckham’s boots.

Only 3% of respondents would opt for Sir David Tweedie’s chair at the International Accounting Standards Board.

But perhaps the most practical means for companies to keep employees happy is to adopt flexibility. The new Equal Pay Act will also boost statutory maternity provisions to 26 weeks paid leave and up to a year off.

Employers who fail to handle flexible-working requests properly will have to cough up eight weeks’ pay in compensation.

Some executive surveys have in fact suggested that rather than improving women’s rights, the new legislation could make them less attractive to employers.

Deloitte’s Burling explains: ‘There are plenty of women who do go off and have families, but they come back to work. The profession is generally better at understanding their needs to make sure they have enough flexibility in the career structure to accommodate that.

‘All you have to do is make sure that when the person comes back they get properly trained in what they will have forgotten and what’s changed.’

A good measure of the scope of accountancy training available is demonstrated by the incoming international accounting standards rules. But, disappointingly, only 51% had already received IAS training and just 20% believed it would not be relevant for their job.

When asked how their company was preparing for IAS, 34% said they were not aware the company was doing anything – just one more reason why so few people would choose to have Tweedie’s job.


Related reading