A report on the gender pay gap at professional services firm Deloitte underlines the large divide that still exist in the sector when partners’ pay is included.
The gender pay gap among the firm’s 2,500 staff has narrowed from 10.1 per cent in 2018 to 6.8 per cent last year. But when partner remuneration is counted, the gap widens sharply to more than 30 per cent.
Under legislation, companies with more than 250 employees will have to publish details of the gender pay gap in their organisations, with the requirement expected to come into force later his year. Deloitte has moved ahead of the legal requirement to publish its own statistics and its plans for promoting gender equality at the firm.
On the basis of the template set out in the legislation, Deloitte calculates that the gender pay gap at the Big Four firm is now 6.8 per cent, having declined steadily in recent years.
The report says the reason for the employee pay gap is because there are fewer women in senior positions and their tenure in those positions. Women make up 47 per cent of the firm’s workforce. However, 27 per cent of the firm’s partners are women and 43.3 per cent of its directors.
The gender bonus pay gap is calculated at 12.6 per cent, down from 23.6 per cent in 2018.
Legislation
Professional service firms will not be obliged under the legislation to include partners in their gender pay gap calculations, as they are owners, not employees of the firm. Partners invest capital and their earnings are determined by reference to the capital they hold and the previous year’s profitability.
Deloitte calculates that taking all employee remuneration together with partner distribution of profits, the assumed gender pay gap rises sharply to 31.3 per cent for the period to September 2021.
The firm’s chief executive, Harry Goddard, says Deloitte has made progress in addressing the gender pay gap, but still has more men “in our most senior, highest paying roles”. The firm is acting to increase the proportion of women in these roles, he said, which it believes will reduce the gap in future.
The number of female partners at the firm has increased from 13 per cent in 2012 to 27 per cent in 2021 and the target is to reach 35 per cent by 2025.
However, the earnings gap at this level is also widened by the longer tenure of male partners. While the average tenure of female partners at the firm now is seven years compared with 10 years for male partners, 89 per cent of the partners within 10 years of retirement – typically by far the highest earning period of their careers – are males.
This issue is likely to exist across the professional services sector.
Among the measures being used by the firm to increase the representation of women at a senior level are the setting of targets and metrics, helping in career development , a range of supports for working parents and normalising flexible working.
