Why haven't equal rights for women meant equal pay?
This article was first published in February 2012 in the
Chartered Accountants Journal (NZ Institute of Chartered
Accountants) and is reprinted by permission.
As part of the remuneration survey conducted each year by NZICA,
information is collected regarding geography, years of experience
and type of employer as well as gender. Differences in pay
based on some of these factors are expected and understood. A
difference in pay between the genders, however, is less easily
In 2011, the pay gap between men and women surveyed by NZICA was
27.6% (compared to 28.9% in 2010). This compares to a 9.6%
pay gap nationally, across all paid employment (source: New Zealand
Income Survey) which had reduced from 10.6% in 2010. Such a
large pay gap in our profession deserves some critical review and
this article will outline some work that has already been
undertaken as well as considering some broader gender
representation and remuneration issues.
We often look at our closest neighbours for comparisons but,
unfortunately, the Institute of Chartered Accountants in Australia
(ICAA) does not produce a remuneration survey and although salary
reports are produced by the major recruitment agencies, they do not
provide information by gender. However, we do know that
globally, NZ performs reasonably well. The average OECD pay
gap is 18%!
Interestingly, in these difficult days post-GFC, it has been
suggested that fixing the gender pay gap could provide a
significant boost to a country's economy. Goldman Sachs
calculated that closing the US pay gap could increase the GDP by
more than 9%. In Australia, the Prime Minister Julia Gillard
recently announced a plan to increase the wages of more than
150,000 community service workers (some of Australia's lowest paid
workers, the vast majority of whom are women) - an initiative of up
to $2 billion AUD.
Are there any reasons for the pay gap?
There are some explanations for the pay gap between men and
women, the most obvious of which is the greater proportion of women
that undertake paid work in a part-time
capacity. This is particularly true of accountants
and the increase in work-place flexibility over recent years is to
be celebrated. Of course, as accountants we also recognise
that it makes good financial sense to support and retain staff in
whom much time and money has been invested; flexible work
arrangements (including remote working as well as variable hours)
are a great way of achieving this.
Other possible explanations for the pay gap include the suggestion
that women don't ask for enough pay, that they
will often accept the offered salary rather than negotiate when
starting a job and that they are less likely than men to ask for a
pay rise or a promotion during their career. Blaming the
victim is not generally a progressive approach but perhaps we can
encourage ourselves and others to hold these 'difficult'
The final often heard argument is about women's lack of
experience, usually as a result of taking time out of
their career to raise their children. Few would argue that
these women have developed their skills in multi-tasking,
flexibility and adaptability - all key requirements for our
careers. Could these skills be more favourably viewed by
employers, especially when considering pay and promotion
Could workplace flexibility provide a solution?
Each year since 2002, there have been more female than male
accounting graduates and there are now significantly more women
under 45 in the profession than men, along with a high number of
male accountants who are over 50. As we know, the number of
women partners and associates is very low with many women leaving
the profession or working part-time for a number of years while
they raise their family and not progressing to partnership.
Combined with some key skills shortages, these demographic
challenges prompted research to be undertaken on flexible work
practices within the accounting sector by the Ministry of Women's
Affairs in 2010, with the support of the Equal Employment
Opportunities Trust and NZICA.
Flexible working was proposed as a solution to the challenges
faced by the profession along with 5 key benefits that it would
provide to the employer. Although the pay gap was not
directly covered by the research, implementing flexible work
arrangements and improving the retention of female accountants
would have the result of increasing the average remuneration of the
female members of the profession.
Could legislation also assist?
Although there are some explanations and potential solutions for
the pay gap, it remains difficult to accept, particularly since the
legislative framework for equal pay in NZ has been in place for
In 1960, the Government Service Equal Pay Act was passed,
eliminating separate male and female pay scales in the Public
Service. This was followed in 1972 by the Equal Pay Act,
which extended pay equity coverage to the private sector.
Therefore, it would appear further legislation specifically on pay
may not be appropriate. However, it may be that the amount of
work place flexibility made available to accountants could be
improved through legislation. Perhaps legislative change to
address female under-representation in other areas would also
Law and women on boards
The number of women on company boards has received a lot of
attention in recent years and a range of initiatives have been
launched at home and overseas. Currently, women make up 9.32%
of directors of NZX companies (45 women hold 58 out of the 622
directorships). The NZ Institute of Directors launched its
'Mentoring for Diversity' programme last December and the NZX has
proposed legislation that would require listed companies to state
the number of women they employ in senior roles.
This follows the broader rules introduced by the Australian
Securities Exchange (which come into effect for ASX listed
companies this year) that require disclosure of the number of women
employed, the number in senior management and the number on the
board. These rules are likely to be responsible for the
increased number of female appointments seen in 2011, resulting in
women now holding 13.5% of ASX directorships (there are 140 women
holding 199 board positions according to the Australian Institute
of Company Directors). In Europe, some countries have quotas
for female board members of large companies (and studies have shown
a positive correlation between women on boards and company
performance). Perhaps a quota should be considered for NZX
The other area of female under-representation which concerns
many is the lack of women in politics. Of course we know that
NZ led the way for women's rights by becoming the first country to
grant women the vote in 1893. We have a good proportion of
female MPs compared to some countries, although the number was
reduced at the last general election for the first time since MMP
was introduced (and is now 38 MPs or 31.4%). Around the
world, women represent an average 18.4% of government reducing to
18.1% in Asia. The figure is much higher in the Nordic
countries at 41.4% (source for all: Inter Parliamentary
Union). Is it a coincidence that Scandinavia is known for its
excellent parental leave and childcare facilities, as well other
social benefit schemes?
A career summary…
Returning to the situation in NZ, let us review the potential
financial course of a career of a new female accountant today:
- As a graduate, a woman's starting salary will be on average 6%
lower than that of her male counterparts.
- After 5 years, this gap could have increased to 17% (source for
both: Ministry of Women's Affairs study - Analysis of Graduate
Income Data 2002 - 2007, Management and Commerce graduates).
- A few years later, she may start wondering whether she will
reach a six-figure salary. According to the 2001 census data,
only 3% of female accountants were earning $100,000 or more
compared to 20% of male accountants (the accounting profession had
the largest gender variance at this salary level).
- When deciding whether to aim for partnership, will she have
many female role models and will her employer provide flexible work
arrangements if she decides to have a family as well?
Hope for the future
One of the key reasons for the pay gap is the lower number of
women who stay in the profession (and reach its higher levels)
compared to men. As we have seen, work is underway to reduce
this gap by providing more workplace flexibility. This will
assist women to stay in the work force for longer as they juggle
their family and their career. Hopefully this will result in
more female associates and partners in due course. There is a
you can't be what you can't see
so let's hope the future contains more women earning the same as
men for the same work, along with more women in key roles in
politics, boards and CA firms!
Suzy Morrissey CA is a Committee Member of the Wellington
Women's Special Interest Group. She is also a co-facilitator in
Professionelle's Wellington Chapter.