Mind the gap! – Pay disparity

What is pay disparity?
Pay disparity or Salary inequality is most commonly mentioned in regard to gender, i.e. where men are being paid more than women for equal roles. However, the term may be used in any situation where salary is markedly different between two or more groups/individuals carrying out the same work to the same level of experience.

Similarly, the inequality may refer not to salary in singularity but to the remuneration package in total, for example where holiday allowance is significantly different other key benefits.

Few things are more disappointing than discovering that your colleagues are being paid markedly more than you are. Sure, we can understand if the boss earns more than we do, but when direct peers are raking in more than you are, it can make you feel undervalued, disheartened and downright angry.

Many firms actively discourage employees from discussing salary with peers, but the truth will often out in the end!

The Market
The Accountancy Practice market is complex in regard to both status and pay.

Not only are there complicated structures which vary from firm to firm (for example a Semi Senior Accountant in a Regional firm, may not be comparable to one in a Top 10 firm), but also an array of disciplines, which cannot necessarily be compared like for like. Should a Tax Manager be paid the same as an Audit Manager for example?

We are consistently finding that candidates who have been in the same role for many years, have a salary which is not only out of sync with the market, but oftentimes out of sync with their peers too. This means that many Accountants are moving roles simply to realign their salary. Often after having discovered that they are being underpaid, under-valued and not attracting the remuneration they richly deserve.

Why has this happened?
There are an enormous number of factors which have impacted on the Accountancy Practice market in recent years, causing shortages in skilled candidates and driving salaries skywards. In a candidate driven market many accountancy firms have been forced to pay a premium for qualified new talent. Add in to the mix the effect of National Living Wage and you can soon appreciate how the market needs a realignment.

Some firms have looked at their workforce as a whole and reviewed to ensure that salaries have been also adjusted for existing employees. But many haven’t, with the upshot being that loyal employees who have stayed put, have in fact ended up on comparatively lower salaries as a result.

What to do?
If you find out that you are subject to pay disparity in any shape or form, what should you do?

1. Stop and think – If you find out that you are being paid a salary which is lower than your peers, it’s instinctive to feel a little hurt and maybe angry. But try to avoid a knee-jerk reaction. Instead you should calmly take time to reflect and consider the following;

Is there a genuine reason why you are seemingly being underpaid?

  • Different hours – Be sure that the hours you work are reflective of the person you are comparing to. If you are speaking to someone at another firm for example they may work significantly longer hours. Even internally, employees may have different structures to their day, different lunch allowances and so on. You need to make sure that you are comparing apples with apples.
  • Skill set – Have you got the same level of ability as the employee you are comparing with? A good example would be a Junior Accountant who is still in training and can produce accounts up to Trial Balance but not finalise them. Their salary may not be as high as another Junior Accountant who can finalise accounts. For more Senior Accountants the line can feel even more blurred, but comes down to depth of experience and what they can actually deliver (without support).

This can be quite an emotive subject and one which is hard to be objective about when it comes to our own abilities. Try and take a step back and think with of it from a business perspective. Remember that a practice will base an employees’ charge-out rate on their ability, and this in turn dictates their profitability. By understanding the basis of this purely business decision it may help you to review more objectively.

  • Level of qualification – Pretty straightforward this one. A fully qualified ACCA accountant would expect to earn more than a part-qualified, and so on. For a Semi-Senior Accountants role, therefore it means that there can be quite a wide salary banding, with a Finalist earning significantly more than someone nearer the start of their studies.
  • Specialisms – Some skills within practice are quite niche and indeed very sought after. As always supply and demand come in to play when creating price, and those with a very specialist skill set which is in high demand may be able to command much higher salaries. Examples include things like the ability to Audit Financial Institutions, Academy specialists, or Specialist Tax planning knowledge such as Trusts and Property Tax. Over time these ‘in-demand’ skills will vary and change depending on the market and how the economy and regulatory systems change.
  • Disciplines – Similarly to above, different disciplines will command different salary levels, again in the main due to supply and demand. So, for example a Tax Senior may have a completely different salary level to a pure Accounting Senior, and an Audit Senior something different again. Tax qualifications at the more senior level are notoriously more difficult to pass, and in particular CTA and STEP. Because of this Tax salaries may be higher due to the scarcity of qualified Senior Tax people.
  • Type/size of Firm – Last but not least do bear in mind the size of firm that you are working for. If you are comparing your Salary to someone in a different Practice it’s not always easy to do. Big 4 firms will quite clearly pay a higher salary than a small 2 Partner practice. If in doubt please contact us to discuss.


2. Your drivers
 
– If after considering all of the factors above you do feel that you are suffering from pay disparity, you need to decide what to do next. For some people that will mean trying to rectify the situation with their employer, for others it will mean looking for a new Job. But there is still a third option… which is to do nothing.

Is money the thing that drives you?

If you are motivated by other things then maybe the pay disparity doesn’t matter. Situations where this may be the case include where you have reduced or alternative working hours and a splendid work/life balance. Maybe you work from home several days a week and a role with a higher salary might not allow you the same opportunity to do so?

Other examples of where you may choose to ignore the situation include where you are part way through a career development process and undergoing intensive training and/or development provided by your employer. In this instance, the advancement opportunities you are receiving may well outweigh any benefit in moving roles or in potentially upsetting the status quo. Sometimes a dip in pay short term may be worth it to open up future earning potential.

3. Speak to your employer – Before looking for a new role, it may be worth having an open conversation with your employer regarding salary. Not everyone will feel comfortable in doing this, but if you are in a role which you really enjoy it may be a worthwhile exercise.

  • Make notes regarding why you think that your salary need to be reviewed
  • Plan what you are going to say
  • Book a meeting with your Line Manager
  • Stay calm and let the facts speak for you


4. Assess the market
 – If you are unsure about your current role and remuneration it may be worth having a confidential conversation with someone who truly understands the market and therefore can give you an objective view.

  1. Find a reputable consultant who is a specialist in your field
  2. Speak to them about the current market rate for your skill set and discipline
  3. What are your alternatives? A good consultant should be able to advise you on what other roles would be suitable for you, and what the ramifications of a move might be in terms of your longer-term career. It may be that they advise you to stay where you are to gain further experience.

Be wary of any consultant who tries to push you down a career path which you don’t wish to pursue, they may well just be focused on a fee rather than your career. Good consultants will discuss all of your options with you and let you decide.

How can we help?
As specialists within the public practice recruitment sector, we have an unrivalled reputation for successfully placing candidates across all areas of a practice, including junior accountants, senior accountants, auditing, personal tax, corporate tax, partners, and bookkeepers.

Working with Public Practice Recruitment Ltd means you benefit from honest, expert and insightful advice at all times. From helping you to identify just what you’re best at, what you want to achieve, and any personal aspirations you may have, to supporting you through the interview and final negotiation and acceptance process, we are here to guide you.

For a confidential discussion about your salary level in relation to the current market please call us on 0333 577 7787 or email info@publicpracticerecruitment.co.uk for a prompt call back from one of our dedicated consultants.

Share

Share on twitter
Share on facebook
Share on linkedin
Share on email

Latest Blogs

Blog Archive

Archives

Latest Jobs

Load more listings

Quick CV Upload

Sign Up For Job Alerts

Keep up to date with the latest vacancies by signing up for job alerts via email.