Gender pay – encouraging signs for some businesses, embarrassment for others

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After a period out of the headlines, the gender pay gap issue has again been thrust back into the limelight with news that salaries of the BBC’s top staff show dramatic disparities between men and women.

According to the corporation’s annual report, only one in three names on the list of those currently earning upward of £150,000 are women.

During 2017, public reporting of gender pay disparities has become more commonplace.  The UK’s larger companies (those with at least 250 employees) are required to publicly announce what their gender pay gap is, while for the BBC specifically, all stars earning more than £150,000 have had to be identified as part of a wider scrutiny of the corporation to demonstrate value for money. These moves are designed to help companies – both public and private – think more critically about how to close the gender pay gap once and for all.

Recent analysis by the Treasury has suggested that the new National Living Wage will eradicate the gender pay gap for the lowest paid by 2020, but will remain a significant problem for others as salaries increase. This tallies with findings from the Institute of Fiscal Studies (IFS), who found the gender pay gap was relatively non-existent at the point where people enter the labour market, and widening only slightly up until employees hit their late 20s. However, it then opens up significantly until reaching a plateau of around 33%, about 12 years after women have had their first child, on average.

This week, AAT issued its own biennial survey into the earnings potential of our members across all levels, as well as how they contribute to the accountancy profession and the overall economy. In order to complete the 2017 AAT Salary and Career Survey, we spoke to approximately 12,000 of our members – from those who are beginning their journey as students right through to those who have worked in the profession for years and run their own businesses.

The gender gap among our full and fellow members was small, but there was still some evidence. According to our research, men at these higher levels were paid an average of around two per cent more than women. And just as in the case nationally, the figures are stronger for women at the lower end of the scale, with women in fact earning nine per cent more at student level, and five per cent more at affiliate level.

This appears to be a significant improvement on our findings from just two years ago, where our survey focused on pay across the board. The 2015 AAT Salary and Career Survey found that average full-time salaries of our full and fellow members in full-time work were 20% higher for men at £31,750, compared to £26,544 for women.

The early signs suggest that the move towards going public with gender pay figures is helping redress the pay gap for some, while other companies such as the BBC are beginning to acknowledge the work that lies ahead of them on this issue. The Government appears keen to ensure that support is given to companies wishing to take action on their own gender gap, and that this doesn’t simply become a public name-and-shame exercise, through initiatives such as the Think Act Report, encouraging companies to identify issues around gender equality. AAT signed up to this report last year, along with becoming the first accounting body to sign the Women in Finance Charter.  While we have a good gender balance within our organisation, our top pay quartile still favours men, and as part of the Charter’s targets, we aim to have women making up at least 40 per cent of senior management by 2022.

It’s also important to remember that public reporting of the gender pay gap is not by itself the solution to the problem, while the fact that it is currently required only by those with at least 250 employees means that there is less incentive, as yet, for smaller and medium-sized businesses to focus on their own gender pay issues. Action from subsidised childcare, enforced paternity leave and greater workplace flexibility, such as the encouragement of working from home, are all measures that companies can consider which may help address the problem. Our own research has told us that men are twice as likely to push for, and get, pay rises – and again steps can be taken during company review processes to ensure that it isn’t bullishness which becomes the key factor in fairly remunerating employees.

Ultimately, companies that are transparent about pay, and consider the root causes of why they may have a gender pay gap in the first place, are most likely to find the solutions necessary to tackle the issue once and for all. In doing so, they can be more proud of their business position which will more accurately reflect current society.

Download your free copy of the 2017 AAT Salary and Career Survey

Olivia Hill is AAT's Chief HR Officer.

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