The ICAEW’s latest salary survey suggests that the average female chartered accountant earns a whopping £47,000 less than the average male ACA.
By anyone’s standard, this is a shocking number. Whilst the survey doesn't compare roles like for like, and so it doesn't necessarily indicate discriminatory pay, it possibly reflects the different career paths women and men take upon qualification. Either way, this is an issue that needs addressing.
This topic is a political minefield. The risk of offending when making generalisations is high. The gender pay gap is an important issue, and commentary and analysis are therefore important. Many of the reasons for the gap result from issues outside the influence of the individual, such as society and upbringing. There are also key personal career decisions that have an impact upon pay.
After analysing several studies, and combining this with my experience recruiting for senior finance positions, here are five key trends that may explain the results of the ICAEW’s survey. There are undoubtedly more, but by understanding how the certain trends affect your potential pay, you have a starting point for closing your personal pay gap.
A quick analysis of Morgan McKinley’s candidates confirm that there are significant gender preferences between sectors, with a greater proportion of men working in high paying sectors such as financial services and energy, and a greater proportion of women working in sectors where pay is constrained, such as retail and leisure. The financial gains in traditionally male sectors significantly outweigh those in traditionally female sectors. By choosing a high-paying sector, you can significantly increase your earning potential.
The perception of 24/7 work and stress has put many people off aiming to become a CFO. The sacrifices required to reach this level are severe, and the role is often not what it is cracked up to be. These sacrifices have a disproportionate impact upon women, who often have more responsibilities outside of the workplace. Finding ways to climb the ladder while still maintaining a family life is a challenge, but something that is possible.
If you refuse to be put off aiming high, seek out the advice of people like Sheryl Sandberg (COO of Facebook), who have already made this journey. Sheryl’s fantastic book: Lean In: Women, Work and the Will to Lead is a fantastic starting point for both women and men looking to climb the ladder whilst balancing a family life. It provides a balanced and realistic view of the sacrifices needed to reach the top.
The average American takes 12 weeks maternity leave. In the UK, this number is closer to 1 year. This is undoubtedly a success story for the UK. However, when it comes to paternity leave, the number is very different. According to a BBC report, less than 1 in 10 UK fathers take longer than the statutory two weeks leave. This may have detrimental impacts upon family life, and it certainly gives men an advantage when it comes to pay and work opportunities. Until a balance is found, with more men being able to take paternity leave, women will be at a disadvantage.
Relocation is one of the most reliable methods of increasing your employment opportunities, and more opportunities means more pay! For thousands of years migrant workers have traveled in order to find work. According to a study by the Work Foundation men are almost twice as likely as women to move for promotion (54% as opposed to 31%). The support networks women may require to cope with the demands of raising a family take many years to build, and so the cost of relocation is disproportionately higher for women. However, if your desire is to increase your pay, moving cities or even countries is something that could be considered.
Many people are given pay rises purely because they ask for one. The cost of back-filling a position are high, and so most employers would rather give a small pay rise than replace a disgruntled employee. However, men are significantly more likely to ask for an increase in pay. A 2006 survey found that while 80% of women felt underpaid, two-thirds had never asked for more money – and those who had, described it as one of the most stressful things they'd ever done. Professor Marilyn Davidson, co- director of the Centre for Equality and Diversity at Work, says that women on average tend not to negotiate. When offered a new deal, they typically just “accept the terms”. Whatever the reason, whether it be lack of confidence or other complex issues, if you want to earn more money, the best starting point is to tell your manager and ask them for advice. Tell them you are motivated to progress and ask what you need to do to turn that motivation into a pay rise.
The ICAEW's latest salary survey raises questions about the world that need answering. The gender pay gap is unacceptable, and a result of decisions taken by both society and individuals. Ultimately, women face challenges that men do not. Overcoming these challenges is crucial. We all have a responsibility to root-out inequality.