‘Accounting trick’ keeping the big 4 below national pay gap
Women were underrepresented among the big four’s top earners in recent gender pay data. Had the data been comprehensive, the picture would have looked still worse.
Partners were not counted in the national pay gap data gathered by the WGEA. It is this “loophole” that kept the big four consulting firms below the national average pay gap, said Greens Senator Barbara Pocock.
“All those partners in the big four consulting firms who walk away with bags of money while minimising their income tax are mostly men,” said Senator Pocock.
“And guess what, they’re not counted in these gender gap stats ... This is an accounting trick.”
Indeed, in responding to its gender pay data, Deloitte shared that only 33 per cent of its partners were female, despite accounting for half of its overall workforce.
Even in the WGEA data, which excludes partnerships, female employees were underrepresented in the highest-earning quartile of all big four consulting firms.
While it is difficult to fact check how significant the movement might be when factoring in partners, the WGEA has acknowledged the exclusion is a drawback.
The 2021 review of the Workplace Gender Equality Act recommended including partnerships and partners in the data set more comprehensively, noting the exclusion “skews the reporting” of the data.
“This is because partnership structures are used in industries with high gender pay gaps, such as legal and accounting industries,” said the WGEA.
The WGEA has said it is working with the government on making the change. The process will involve consulting with industry stakeholders on how to collect data on the promotion and resignation of partners, data on the composition and equity status of partners, and requiring employers to report partner remuneration data.
This is only one of the drawbacks acknowledged by the WGEA. Another significant issue is that chief executives were not included in the data.
“Nearly 80 per cent of CEOs in Australia are men. Because CEOs are often the highest paid employees at an organisation, we expect the inclusion of CEO remuneration to have a meaningful impact on employer average gender pay gaps,” said WGEA.
Senator Pocock said the Greens are calling for firms to be required to publish their partnership gender pay data, adding the “public deserves the data.”
“This is the loophole in the gender pay stats that allows the big four firms to evade transparency so we don’t have the full picture about the gender gap in their organisations,” she said.
“Let’s find out what’s really going on for men and women inside the big consulting firms.”
