The accounting firm PwC has adopted a new rule in the UK whereby shortlists of candidates for senior roles must include at least one woman, the Daily Mail reported on Sunday:
Laura Hinton, chief people officer at PwC, said: ‘Diversity in our recruitment processes is something we’ve been focused on for some time and as part of this we are ensuring we have no all-male shortlists and more diverse interviewing panels.’
PwC, which specialises in tax and advisory services, recently set a target to recruit 50 per cent women and 50 per cent men in all of their recruitment drives. The firm also has a sizeable 35.9 per cent pay gap for its Black Asian and Minority Ethnic (BAME) employees. The move comes as it emerged that the three other companies which make up the Big Four – Deloitte, KPMG and EY – had all called for greater diversity on their candidate lists.
PwC and its competitors all released their UK gender pay gap data in March in line with a law requiring most organizations in that country to do so. These firms’ partnership structures starkly illustrated the degree to which the underrepresentation of women in leadership roles compounds the gender pay gap.: PwC reported a mean gender pay gap of 43.8 percent and a median gap of 18.7 percent when partners were included, whereas the mean gap for employees of PwC Services Ltd., the legal entity that employs most of the company’s UK workforce, was just 12 percent.
Overall, the 61.4 of the roles in the top quartile of the firm are occupied by men, the report showed. Absent the underrepresentation of women in senior roles, PwC said its overall UK pay gap would be as low as 2.9 percent—a difference that “can largely be explained by time in role and skill set factors.”
The other Big Four firms’ data showed similar distinctions in how the pay gaps look when partners are and are not included. Not surprisingly, the reports from these firms revealed large gender bonus gaps, which create pay discrepancies even where men and women receive equal base salaries for equal or equivalent work (as all of these firms stressed they did, in compliance with longstanding pay equity law in the UK). KPMG reported a mean gender bonus gap of 51.3 percent, or a median gap of 27.6 percent.
Pay gap reports from UK financial institutions also showed the impact of the gender discrepancy in leadership roles. At HSBC, for example, only 23 percent of senior positions are held by women, although women make up 54 percent of the bank’s overall workforce. This position gap is considered the main reason why three out of four UK companies reported paying men more than women.
The revelations coming out of Great Britain are also inspiring these large, multinational firms to take steps to close their gender gaps in the US and globally as well. Like PwC, Goldman Sachs followed up its UK pay gap report with a pledge to ensure an even gender split in every class of new hires by 2021, toward a long-term goal of having women make up half its global workforce. PwC has also updated its benefits for new parents in the US, who do not enjoy a statutory right to paid leave, which will be particularly helpful to new mothers. The motherhood penalty—the reduction in earnings women experience after having children and taking time away from work to care for them—has been identified as a major contributor to gender gaps in pay and career advancement.