Accountancy Pay gaps: the ongoing battle

Accountancy Pay gaps: the ongoing battle Share

New reports on gender pay gaps across the profession are due out, many of the top firms have begun to join forces to report on a different pay equality issue – the ethnicity imbalance.

Full disclosure

Last week, EY, KPMG and Deloitte were among 15 of the biggest UK companies to call for mandatory ethnicity pay gap reporting among businesses with more than 250 staff.

A total of 15 companies have so far signed a commitment to work towards the enforcement of ethnicity pay gap disclosures, encouraging other businesses to follow the lead.

INvolve, an organisation that champions diversity and inclusion in business, said other signatories were Bank of England, Bupa, Citi, Creative Equals, ITN, Jomas Associates, Lloyds of London, Reluctantly Brave, Santander, Sodexo, Stella McCartney and WPP.

Interestingly, PwC has not yet officially signed up to the mandatory ethnicity pay gap reporting proposal, but said, “We support mandatory pay reporting and have contributed to the government’s consultation on making this mandatory.”

Time for change

INnvolve predicts that white people currently earn on average £67 to £209 more per week than similarly qualified individuals of a different ethnic background – but that the most ethnically diverse workplaces are 35% more likely to financially outperform industry averages.

As a result, the business that have signed up are not only calling for mandatory reporting of pay disparities, but also practical, top-down institutional change through more visibility of data and open discussion of why the ethnicity pay gap exists within their organisations.

Big deal for big business?

Currently, only 3% of large businesses in the UK have voluntarily reported their ethnicity pay gaps, and that figure does include accountancy’s Big Four.

PwC has previously disclosed that its Black, Asian and Minority Ethnic (BAME) pay gap for employees and partners stood at 35.9%, while Deloitte’s was 43.9%, EY’s stood at 38.1% and KPMG’s was 34%.

Suki Sandhu, CEO and Founder of INvolve said, “Addressing hard issues like disparity and race is never easy, but the moral and business case for taking action must win out. For many businesses the idea of increasing corporate reporting is not a welcome one. But, as shown by mandatory gender pay gap reporting, it is vital to encourage discussion and help businesses to deliver impactful change.

“We know firms who are more diverse and inclusive enjoy a significant diversity dividend – enhanced profitability, productivity, innovation and sustainability. We hope by publishing this framework and white paper more businesses will voluntarily take up reporting on the ethnicity pay gap, while we await the outcome of the government’s policy decision.”

The Equality and Human Rights Commission has also called for mandatory ethnicity and disability pay gaps reporting. It argued that the UK needs to place the same level of scrutiny and action on tackling pay disparities among ethnic minority and disabled staff that it currently puts on gender pay inequality.

If equality is important to you, we encourage you to question how well your company is doing in this regard, and factor such reports into any choices you may make about joining new firms in the future.

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