Deloitte ethnicity pay gap slow to close

Big Four firm Deloitte UK has said it still has some way to go in closing the firm’s entity pay gap, as its second year data should the mean pay gap is currently 12.9%, compared to 11.7% in 2017

The median hourly pay gap for Deloitte UK’s black, Asian and minority ethnic (BAME) employees stands at 7.9% (it was 6.9% in 2017).

The firm’s median bonus gap for BAME employees is 25% (30.0% in 2017) and its mean ethnicity bonus gap 45% (40.8% in 2017).

However, Deloitte points out that a reduction in disclosure rates from 83.1% in 2017 to 75.4% in 2018 makes a true year-on-year comparison challenging.

Analysis shows that the gap is due to the lower proportion of BAME employees holding the most senior positions within the firm. While BAME people made up 22% of Deloitte’s overall workforce in April 2018, only 5% of partners and 10% of directors (the grades attracting the highest levels of remuneration) are BAME.

The firm’s agreed target is that, by 2021, 10% of its partners will be BAME, its executive committee will have at least one BAME member, and each of its business leadership teams will include at least one BAME member.

Deloitte analysis shows that the average mean ethnicity pay gap within grade pools was around -2.4% (i.e. in favour of BAME employees). A significant driver for this is the high proportion of London-based BAME employees; 74% of BAME employees are based in London where salaries are, on average, higher. In comparison, only 58% of Deloitte’s non-BAME employees are based in London.

To further increase transparency, Deloitte has published two additional, voluntary calculations: the equity partner earnings gap and the total earnings gap, which takes into account the earnings of the whole firm, including equity partners. The earnings gap stands at 10.6% (median) and 43.9% (mean).

Emma Codd, managing partner for talent at Deloitte UK, said: ‘We first voluntarily published our ethnicity pay gap in December 2017 and I’m a firm believer in the role such transparency can have in encouraging change.

‘Meaningful and sustained change takes time but we are starting to see the results of some of our actions. This year we’ve seen a rise in the proportion of BAME promotions to partner level and an increase in the number of BAME students applying to join our firm – both encouraging signs that our actions are starting to have an impact.

‘Today’s pay gap report shows that we still some way to go and that’s why we are fully committed to providing an inclusive and respectful working environment, alongside targeted actions to help achieve the balance we should have in our firm.’

Report by Pat Sweet

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