McKinsey & Company has become the latest member of the management consulting market to report its UK gender pay gap. In line with the professional services industry as a whole, the firm highlighted a 23.8% mean gender pay gap for fixed hourly pay.
Despite progress in other areas, female workers in Britain remain disadvantaged, with wage disparity costing the UK’s female workforce an estimated £85 billion in lost wages per year – or £6,100 per individual. According to recent research into pay gaps across different industrial sectors, while financial services is the sector with the largest gender pay gap, at 34%, professional services firms also feature an above average gap, at 23%.
In order to push firms to address this, the UK Government has demanded that companies in the UK across all industries publish their gender and ethnicity pay data by April 2018. The regulations now require organisations with 250 or more employees to publish the difference between both the mean and median hourly rate of pay for male and female full-time employees; the difference between both the mean bonus pay and median bonus pay for male and female employees; the proportions of male and female employees who were awarded bonus pay; and the proportions of male and female full-time employees in the lower, lower middle, upper middle and upper quartile pay bands.
Many of the world’s largest consulting firms released this information in advance, in a bid to demonstrate their willingness to address the issue. PwC was the first of the Big Four to do this, perhaps understandably, as it had the most narrow mean gap of 13.7%, while competitor-firm EY was found to have the largest gender pay disparity of 19.7%.
Now, as the release of the data becomes binding by law, McKinsey & Company has become the latest member of the consulting industry to unveil its gap. The organisation reported a gender pay gap which was slightly over the average disparity in the professional services sector, declaring a mean difference of 23.8% – a difference which is also some way off from the progress made by the Big Four, comparatively.
While McKinsey’s median pay gap is more in line with other professional services industry leaders, at 14.3%, 0.5% lower than that of EY, the firm also revealed differences in terms of bonus pay. Its mean gender pay gap for bonuses stands at 76%, while the median gender pay gap for bonus payments is 52.5%. This is partially due to the fact that a smaller number of female employees actually received bonuses, as over the reporting period, 86.8% of female employees received a bonus payment compared to 88.6% of male employees.
As is the case with the bulk of the consulting industry, the size of these gaps is entrenched by a lack of representation at higher levels of the firm. 60% of McKinsey’s lowest pay quartile are women, almost double the 36% of employees in the highest quartile. Women also represent 37% in the second quartile and 39% in the third quartile.
Major changes
In order to address its gender pay gap more rapidly, then, McKinsey has announced that it will seek to ramp up its female presence in the upper realms of the firm. McKinsey subsequently committed to having 40% of its consultant roles filled by women by 2020, including 30% female Partners and 15% female senior partners. During 2017, 40% of consultants that the company recruited were female – meaning that the firm is on track to meet its 40% target, should it continue in this vain. To ensure this, the organisation will also use initiatives such as its Women as Future Leaders network, and the provision of unconscious bias training for all interviewers, to ensure that female employees are visible at all stages of the recruitment.
McKinsey has also introduced measures to retain its female staff – something that professional services firms are placing an increasing impetus on already amid a tightening human resources market – including the implementation of targeted programmes such as its Women’s Leadership Workshop and Pathway to Partner programme. The consulting firm is encouraging open discussions around barriers and trade-offs relating to gender and working to connect high-performing men and women both inside and outside of the business.
A statement in McKinsey’s pay gap report reiterated that it is keen to redouble its efforts to address gender disparity in its organisation. It said, “We are far from having all the answers, or delivering the full results we aspire to, but our understanding of what’s holding back progress, and of how to accelerate it, is growing. Our gender pay gap numbers are a timely reminder that we still have some way to go, but we are encouraged by the progress we have already made and by the desire we have to get this right.”
Sourced from Consultancy UK