Accountants should be leaders in pay equity

I strongly believe the accounting profession must demonstrate leadership in pay equity, both as advisors to clients and employers, and as implementers of fair policies within our firms. Our calling cards are objectivity, integrity and transparency, so we should be the first to raise a red flag if pay practices are out of alignment on gender, racial or ethnic lines. Absence of pay equity harms business performance, recruitment and retention, and raises risk — in short, it's bad business and we shouldn't tolerate it. 

That's why I found it so disturbing — infuriating, really — to read a recent Wall Street Journal article that used federal data to show that median pay for men exceeded that for women three years after graduation in almost three-quarters of undergraduate and graduate degree programs, representing a range of fields of study. An accompanying chart of career categories showed a distinct early pay gap among women and men for accounting and related services. Disparities like these are indefensible, and we can't allow them to linger.

We know this is a general business problem, not something the accounting profession grapples with alone. And it's important to note The Wall Street Journal relied on U.S. Education Department data from 2015 and 2016, the latest available for this kind of analysis, so progress should have been made in the intervening years. The article cites data from Georgetown University, where — three years after graduation — women with bachelor's degrees in accounting earned median pay of $99,000 while their male peers earned $155,000. Thankfully, the piece goes on to quote a spokeswoman from the university who said information from the 2021 graduating class points to roughly equal pay. 

Still, 2015 is hardly the distant past — can anyone really challenge the notion that more enlightened pay practices should long have been standard by then? We also know the pandemic has had an outsize impact on women in the workforce, with women's jobs twice as vulnerable as men's, according to research by the McKinsey Global Institute. That kind of volatility likely deepens pay gaps. 

Of course, no one is saying each person at the same career level should be paid the same amount, and the Journal article did note that some women chose lower-paying jobs for various reasons. But when we see lingering disparities between men and women or among racial and ethnic groups, when all things are equal among employees, we must commit to doing better. We're not going to zero out pay gaps instantly, but firms and employers can agree to reset their pay practices if they don't fully account for bias, unconscious or not. 

Here's what I suggest firms can do: 

• Consider a gender and race/ethnicity pay audit. If discrepancies are found, have a defined plan for remedying inequitable treatment. Engaging in a more comprehensive compensation review — either internally or with outside consultants — can be crucial for setting benchmarks and seeing trends. You can also use our brochure on preventing gender pay disparities for best practices in this area.
• Know how you stack up with your peers. Be sure to use accurate comparative data, since different markets have different pay scales. Make sure job descriptions reflect reality and are comparable — narrowing pay ranges for jobs, for example, can be a best practice. Compensation consultants or third-party salary surveys can help. The Bureau of Labor Statistics has good information about women's pay versus men's, as well. 
• Make sure you're considering all aspects of compensation. Be sure to consider base pay, merit increases and bonuses. For discretionary awards, make sure your organization is transparent about the kinds of behaviors and achievements that lead to rewards. Our PCPS CPA Firm Competency Model offers a good template for standardizing skill sets at each level. 
• Focus on outputs and outcomes, not the number of hours worked. Working mothers or caregivers may rely more on flextime or remote work. A performance culture should measure successful outcomes, not how much time an employee spends in the office.
• Take steps to make sure your leadership ranks are diversified. Women only hold 39% of partnerships at the firms that participated in our latest research, despite representing almost half of the workforce within the profession. Pay equity will become more of a priority when more voices are heard.

If there's one take-away I can leave you with, it's that we have the tools to achieve pay equity within the profession and the larger business community. It's time to use them.