…and it’s a big one.
Women in financial roles earn almost a quarter less than their male counterparts.
Read that again.
The gender pay gap remains a problem across many sectors, and firms are not immune to this ongoing issue.
To make matters worse, public practice is committing this disparity at a much higher rate than the national average.
Both the Office for National Statistics and Accountancy Age have reported comparable figures. So what’s being done about it?
To mark Women’s Equality Day (August 26th), it’s time to acknowledge the gender pay gap in UK accountancy firms for what it is…
Inexcusable.
This article examines the systemic issue and potential measures to address this shortcoming.
Understanding the gender pay gap
The gender pay is the difference in average earnings between men and women. For public practice accountants, that difference is a whopping 25%.
The gap can result from various factors and within public practice, these factors manifest in distinct ways that contribute to the ongoing pay disparity:
Occupational segregation
Women are often underrepresented in senior positions within accountancy firms.
While there may be a relatively equal number of men and women at entry-level positions, the proportion of women decreases significantly at higher levels of the corporate ladder.
This segregation means that higher-paying roles are predominantly occupied by men.
The numbers speak for themselves:
According to the Financial Reporting Council (FRC), while women make up 46% of manager level roles at audit and accountancy firms, just 17% of women rise to partner level.
And it’s not an isolated issue within the accountancy giants. A similar trend can be seen at smaller firms with less than 200 employees, where 52% of manager level roles are held by women, but just 11% of women hold partner level.
Worryingly, the FRC also states that 1 in 3 UK audit and accountancy firms don’t even collect diversity data for their workforce.
How can the issue be addressed if firms are turning a blind eye?
The ACCA also sings a similar tune, recently reporting that a fairly even split of male and female junior accountants have entered the profession over the last decade, but three out of four senior leadership positions are held by men.
Deep rooted discrimination
When men and women occupy leadership roles, they are often subjected to different perceptions and standards, which can impact their careers and effectiveness.
Men are frequently praised as strong, decisive leaders, while women exhibiting similar behaviours may be labelled as bossy, aggressive, or difficult.
This double standard reflects deeply ingrained gender stereotypes, where assertiveness in men is seen as a positive trait, but in women, it is often viewed negatively.
In fact, research shows that 66% of female leaders have been labelled as abrasive or similar during performance reviews, compared to just 1% of male leaders.
Another bias is the common perception that women are more emotional, which can lead to doubts about their ability to handle high-pressure situations or make tough decisions. This results in them being overlooked for senior roles.
According to research by Lean In, an organisation championing equity for women, 73% of women experience bias at work.
However, less than a third of employees are able to recognise bias when they see it.
These biases not only undermine women’s authority and credibility but also limit their opportunities for advancement, perpetuating gender inequality in leadership positions.
Performance and pay reviews
Studies in the UK have highlighted that women are more likely to receive less favourable performance reviews compared to their male counterparts, even when their work output is similar.
When it comes to pay negotiations, the disparity is even more pronounced. Research indicates that women in the UK are less likely to initiate salary negotiations compared to men.
A survey by Totaljobs found that 64% of women had never negotiated their salary, compared to 44% of men. This reluctance can stem from a fear of being perceived negatively or damaging relationships at work, a concern not as commonly held by men.
When women do negotiate, they are less likely to achieve successful outcomes. A study by Glassdoor found that only 36% of women who negotiated their salary received an increase, compared to 44% of men.
These disparities underscore the need for more transparent and equitable review processes and support for women in pay negotiations to ensure fairness in the workplace.
Cultural and structural barriers
The culture within accountancy firms can significantly hinder the progression of female accountants, largely due to the lack of female role models, limited mentoring opportunities, and a corporate culture that historically lacks diversity.
Mentoring is crucial for career development, yet only 35% of female accountants in the UK feel they have adequate access to mentoring, compared to 50% of men, as reported by the Women in Finance Charter.
Without this support, women often miss out on essential guidance and networking opportunities needed for career progression.
The traditional corporate culture in many accountancy firms often perpetuates unconscious biases, with women being overlooked for promotions or challenging assignments.
Flexible working arrangements, critical for balancing work and personal responsibilities, are less available in public practice than other professions – only 30% of women in finance roles have access to them, according to the Chartered Institute of Professional Development.
What is being done to address the gender pay gap?
Several initiatives and regulations have been introduced to tackle the gender pay gap in UK accountancy firms:
- Gender pay gap reporting: Since 2017, UK companies with over 250 employees are required to publish their gender pay gap data annually. This transparency is intended to hold companies accountable and encourage them to take action to reduce the gap.
- Diversity and inclusion programs: Many accountancy firms have implemented programs aimed at promoting diversity and inclusion. These programs often include mentorship schemes, leadership training for women, and initiatives to support flexible working arrangements.
- Equal pay audits: Conducting regular equal pay audits helps firms identify pay disparities and take corrective measures. These audits can highlight areas where gender pay imbalances are most pronounced and guide targeted interventions.
- Promoting work-life balance: Encouraging a work-life balance that supports both men and women equally can help reduce the gender pay gap. This includes offering parental leave for both parents and promoting a culture where taking leave for family reasons is not stigmatised.
Are these efforts enough?
Whilst improvements have been made in recent years, the World Economic Forum has calculated that at the current rate, it will take 132 years to reach full gender pay parity.
The role of public practice leaders
Leadership within accountancy firms plays a critical role in addressing the gender pay gap.
Top management must be committed to gender equality and willing to implement policies that foster a more inclusive environment.
This includes setting clear goals for reducing the pay gap and regularly reviewing progress towards these goals.
Gender equality should be a core part of any company’s values and culture.
At this point, the cry for change couldn’t be louder. The gender pay problem isn’t a new conversation, and leaders are fully aware of the role they play in driving equity.
The business case for gender equality
Addressing the gender pay gap should be a matter of fairness, not good business.
However, research has consistently shown that diverse teams perform better, leading to higher profitability and innovation. So, a win-win, right?
Firms that prioritise gender equality are likely to attract and retain top talent, enhancing their competitive edge in the market.
And we can vouch for this. By working closely with talented candidates up and down the country, here at Public Practice Recruitment Ltd, we know how much emphasis is placed on ethics and modern practices for job searching accountants.
The gender pay gap in UK accountancy firms is a complex issue that requires concerted effort from everyone to address. While significant strides have been made in recent years, much work remains to be done to ensure that women in public practice are paid fairly for their contributions.
By continuing to promote transparency, support diversity and inclusion, and challenge inequality, public practice can move closer to an equitable profession.
Our commitment to our candidates is to only work with forward-thinking firms that foster modern workplaces with fair and inclusive values.
If you’re a talented accountant looking to work with a firm at the forefront of change, we can help.
Similarly, if you work for an inclusive firm that is recruiting for accountants with aligned values, our extensive network covers the length and breadth of the country.
Or is your firm falling behind and needs help to establish a modern employee value proposition? Now’s the time to raise your hand and embrace change.
We don’t just place talented candidates with leading firms; whilst we have a 20-year track record of successfully doing that, we also work with hiring managers to improve talent attraction and retention strategies.
We’re here to help, so contact us today.
