Closing accounting's gender pay gap

In recent years significant progress has been made towards achieving gender pay parity in accountancy, with one recent report placing the gender pay gap for accountants at 6.6%. This is a marked improvement on previous reports and below the cross-industry average of 8.3%.

So what factors have contributed to this improvement and what needs to happen to eradicate the gap?

Financial Accountant speaks with Helen Kowalewska, Lecturer/Assistant Professor in Social Policy at the University of Bath, and Duncan Walker, Managing Director at Duncan Walker Partnerships Ltd, about fixing the gender pay gap in accounting and the state of pay parity across the UK in general.

The UK’s gender pay gap

Before we dive into the gender pay gap in accounting, it’s worth taking a look at the state of gender pay parity in the UK overall.

As shown in the graph above, there’s been an overall decline in the gender pay gap in the UK over the past few decades.

“The gap is obviously a historic issue and it can’t be changed overnight,” says Walker. “There shouldn't be any gap at all, but it’s encouraging to see that the gap is getting smaller, so we are heading in the right direction.”

When observing the gender pay gap across the UK, some geographical areas appear to be well ahead of others.

Walker says it’s not necessarily the case that they’ve done a lot differently to close the gender gap, but the data may reflect smaller population sizes in those parts of the UK.

“Scotland and Northern Ireland have relatively small populations compared to the rest of the United Kingdom. Because England has a bigger population I would think there is a tendency for there to be more differentiation,” says Walker.

He also suspects that it could be harder to keep gender pay gap discrepancies under wraps in countries with smaller populations.

“The variation [between 1997 and 2022] might be greater in Northern Ireland and Scotland because it would be fairly obvious to people if someone is getting paid massively more than somebody else, whereas London has such a large population that it would be difficult to keep track.”

Measuring the gender pay gap in accounting

The gender pay gap for chartered and certified accountants currently sits at 6.6%. This is a significant improvement from the gap reported by the Big Four firms a few years ago when the gaps at those firms ranged into the high teens.

In 2018, EY reported a median gender pay gap of 19.5%, while at Deloitte the gap was 15.2%.

The introduction of mandatory pay gap reporting, which applies to large UK companies, one year earlier could be behind the gradual improvement.

“Before mandatory reporting came into effect it was hard to know the extent to which the gender pay gap existed,” says Kowalewska. “In the public sector it was transparent but it wasn’t clear in the private sector. Making it mandatory for large private companies to report their gender pay gap has been a helpful start. However, it is limited to big companies so we don’t necessarily know what the pay gap is in smaller companies, which is the majority of businesses.”

As shown in the graph below, the gender pay gap is also substantially greater in some industries, including for teachers; legal professionals; and marketing, sales and advertising directors where the gap reaches into the 20s and 30s. Search for professions in the top left search bar (for example, try ‘chartered and certified accountants’).

Although it’s promising to see that the gap in accounting has reduced in recent years, the fact that there still is a stubborn gap is concerning, says Kowalewska.

“A 6.6% gap seems small compared to some professions having a pay gap of 20%, but it’s a gap nonetheless and something that needs to be addressed.”

For this gap to narrow, companies need to put proactive strategies in place, including providing incentives for men to take parental leave.

“We need to create more equality in men’s and women’s caregiving roles. Shared parental leave came into effect in 2015 but the take-up among men has been really low,” says Kowalewska, pointing to a prevailing attitude that women are the parental caretakers as the culprit. A cultural shift is needed, and employers have a role in making that happen, as well as in reducing and eradicating the career penalties associated with taking time out for parenting.

“There’s this assumption that it’s the woman who disrupts her career to have kids. That has implications for the gender pay gap because it means that women are less likely to be promoted, hired and given extra responsibilities. It’s often still seen that career opportunities will clash with their personal life.”

Creating more flexible models of work that encourage collaboration and sharing of clients could also help to close the gender pay gap.

“There’s often an expectation that an accountant works with certain clients and others in the team don’t have much interaction with those clients. That means if that accountant isn’t there then the work with that client will be compromised,” says Kowalewska.

This could filter through to remuneration as it may mean that companies are more inclined to financially reward accountants who are available 24/7.

A team-based approach can help to address this problem.

“It would help to break down that perception that work can’t be 24/7. Everyone needs to have more flexibility built into their work routine,” says Kowalewska.

“Changing the flexibility of a profession and creating greater standardisation of communication can help to make it a more open, diverse and inclusive workplace.”