Steps toward closing the gender pay gap

CPA employers can take these concrete actions to make compensation more equitable.
By Yasmine El-Ramly, CPA/CITP, CGMA

Steps toward closing the gender pay gap
Image by dashk/iStock

Early in her career, Melissa Hooley, CPA, CGMA, and her husband at the time, also a CPA, worked for the same organization. Every year they each received a letter detailing their raises — and every time her husband got a higher increase than she did, even though they were at the same level and had nearly identical backgrounds, performance reviews, and expertise.

"Each year I had to go in and discuss the issue," said Hooley, who has since changed firms and is now partner-in-charge of employee benefit plan services at ACM LLP in Denver. "Every year I had a conversation with my mentor (a male partner at the organization), and he always ensured adjustments were made." Although she appreciated the organization's adjusting her compensation and recognizing the unintentional bias, she found it exasperating to have to make a case for herself year after year, especially with the knowledge that others with the same qualifications didn't experience the same problem.


As Hooley's example illustrates, the gender pay gap in accounting is real. Among accountants and auditors, women made 78% as much as men did, according to a 2018 report by the American Association of University Women. In the United Kingdom, the publication Accountancy Age found a 21.5% gap overall between men's and women's salaries.

Many organizations have unintended gender pay discrepancies in their compensation structure, which they may not even be aware of. But there are compelling reasons for organizations to assess their compensation practices and take an intentional approach to pay equity. Equitable pay is more than a matter of simple fairness; organizations may lose valuable talent if women employees become aware of a wage gap and leave. Organizations with a wage gap may also gain a reputation for pay disparity or unfairness, making it difficult to recruit top talent.

"Your competitors have an advantage if your people are underpaid, because they can lure away the best people or the strongest entry-level staff simply by offering market rates," noted Mary Bennett of MLBennett Consulting LLC in Asheville, N.C., a former chair of the AICPA Women's Initiatives Executive Committee and a consultant to CPA firms and other organizations on diversity and inclusion. "If you don't create a sense of belonging and fairness, people do notice."

Organizations that retain their best people also have more to offer clients. "As a profession, if we genuinely want to bring value to clients, the creativity that comes from diversity of thought is critical," said Wendy Eversole, CPA, CGMA, partner and COO of HORNE LLP, working out of the firm's Ridgeland, Miss., office. "Pay parity is a big part of ensuring we have that diversity."


Often, there are concrete reasons why individual men and women with similar positions are paid differently. Various factors can affect pay, such as cost-of-living differentials in local markets or pay variations based on specialties; an employee's education level, level of expertise, or practice area; and the quality of an employee's performance.

However, some gaps in compensation have nothing to do with performance or qualifications. Some may result from unconscious bias or other misunderstandings in the compensation process. In other instances, pay gaps may arise if female professionals fail to negotiate a higher salary on hiring or a larger increase in a performance review than men do. (As a Glassdoor survey found, 68% of women accepted a salary offer without negotiating, compared with 52% of men.) This disparity will only grow over time if professionals receive raises or bonuses based on their current salaries. All employees should be prepared to negotiate for the salary they think they deserve (see the sidebar, "How Individuals Can Ensure They're Paid What They're Worth"). And a survey reported in the Harvard Business Review found that women who asked for higher pay actually got that raise only 15% of the time, versus 20% for men, which is why consistent and equitable organizational pay practices are so important.

Pay gaps can also be exacerbated when starting pay is based on a new hire's last salary. If women start out being paid less than men, they will then be more likely to start subsequent jobs at a lower rate than men and, if raises are based on set annual percentage increases, their pay will remain lower over time.


Organizations can take several steps to remediate existing disparities and prevent new ones. However, in making any individual or general compensation decisions, employers need to be aware of employment and labor laws, especially those that have to do with compensation, hiring and firing, and discrimination. Laws vary widely among jurisdictions and can change frequently. It is always a best business and legal practice to consult with an attorney when analyzing and managing pay equity issues. According to Best Practices for Preventing Gender Pay Disparity, a guide from the AICPA Women's Initiatives Executive Committee, organizations can:

Track compensation metrics

A comprehensive compensation audit, performed at least annually, is the best way to identify and track metrics on all compensation issues, including gender pay parity. "If you just have gut checks and not a robust review process, you can miss the mark on the market salary levels or fail to notice unconscious bias," Hooley said. (An audit can also spot pay disparity among white and minority employees.)

How does an audit work in practice? At HORNE, a team that includes Eversole, the firm's managing partner, and the director of finance reviews raises and bonuses once a year to spot trends and discrepancies. To gain perspective, the team talks with partners-in-charge to understand professionals' individual strengths and the reasons for past compensation decisions.

During conversations like these, Bennett advised, "It's very important not to present the reviews and the discussions with those in charge of compensation as punitive or as a search for overt discrimination but as a trend analysis instead." Everyone involved should understand that any disparities could be a result of unconscious bias or other unintended actions over a series of years, she noted.

Another option is to bring in an outside consultant to perform a regular compensation review that includes gender pay parity issues, said Beth Baldwin, chief people officer at Burr Pilger Mayer LLP (BPM) in San Francisco. She recommends that the reviews include benchmarking your compensation against local and nationwide salary data to ensure that you remain competitive. Bonuses should be part of the review, as they are an important part of compensation.

Considering market data may be a requirement in some jurisdictions. When gathering market pay information, be aware of antitrust issues. For example, it's illegal in many jurisdictions to directly ask a competitor about their pay to match it.

Understand the difference between equal and equitable

Pay parity is not about paying individuals an equal amount at each level of the organization but about helping achieve a level playing field for everyone. Differences are acceptable as long as they are equitable and are empowering individuals to take ownership of their career. Employees with modified work arrangements, for example, may have lower total compensation than those with standard working hours; nevertheless, such arrangements are an important benefit that can allow individuals to integrate their lives, career, and values.

Address existing disparities

If you find out that pay gaps exist in your business, consult your organization's legal counsel to determine how to remedy inequitable past pay practices and how to ensure that those practices are corrected going forward.


Steps to take include:

Have a narrow range for starting salaries

Having too wide a range can open the door to inadvertent inequities. If men typically get the highest salaries and women fall at the low end, a wide range will exacerbate the gap between them. For example, a report by the jobs data platform company TransparentCareer found that, among new MBAs with the same credentials and access to an identical set of jobs, the total compensation package was $14,000 higher for men than for women.

To address this issue, organizations can ensure that all incoming employees at the same level and with similar backgrounds have similar salaries. BPM, for instance, offers the same starting salary to all entry-level hires with similar levels of education or experience, separate from any signing bonus and wardrobe allowance. Salary "may begin to vary after the third year" based on performance reviews, promotions, and other factors, Baldwin said.

Another good practice: Refrain from asking about current or past salaries when hiring, a practice that is actually illegal in some states. Base salary on qualifications for the job rather than previous pay.

Use objective, organizationwide measures to set employees' pay and raises

Align metrics with your organization's core competencies and leadership attributes. As a starting point, CPA firms can turn to the AICPA Private Companies Practice Section (PCPS) CPA Firm Competency Model (available to PCPS Section members), which details attributes for the following areas of professional achievement: business development; people development and teamwork; chargeable hours/productivity/personal profitability; client service; and technical knowledge/expertise.

Set expectations

Make the performance review and promotion decision process as transparent as possible by communicating the attributes and competencies that are valued and/or needed to advance within the organization. One way to do so is to make a road map of the process and competencies available to all employees during onboarding.

Rethink how you handle employee performance reviews

Ask that criticism in reviews be constructive to avoid biased or dismissive assumptions or conclusions. For example, the review might suggest a solution ("She has good ideas but could benefit from coaching to help build her confidence so that she articulates them in meetings.") rather than offering purely critical comments ("She seems to lack confidence because she rarely speaks in meetings.").

Encourage promotions

One way to equalize an organizationwide pay disparity is to ensure that women have the same opportunities for advancement as men. The fact that far fewer women than men make partner can be one factor in a firm's overall pay gap. The latest AICPA Women's Initiatives Executive Committee CPA Firm Gender Survey found that only 22% of partners were women. If a star player has consistently received bonuses but hasn't been promoted, the team reviewing gender pay disparity should work with the relevant organizational leaders to understand why. The team can ask this question about both men and women, but raising the issue will help prevent women from being unintentionally sidelined.

Develop formal sponsorship programs

These efforts can ensure that women and underrepresented minorities have the same opportunity for advancement and pay increase, as well as increase the available talent pool in organizations by spotting emerging leaders (see "Succeeding at Sponsorship," July 2019). More details are available in the PCPS CPA Firm Sponsorship Success Toolkit.

Offer training in detecting and overcoming unconscious bias

Organizations should provide regular awareness training for partners and any others who make compensation decisions. This education can be integrated into other training or awareness efforts on compensation, people management, organizational culture, and unconscious bias.

Expect accountability

Hold leaders and those who conduct performance reviews accountable for the organization's gender pay audits and other efforts to address compensation issues and resolve existing discrepancies.

Enhance diversity

Including more women and underrepresented minorities on compensation committees can help tackle unconscious bias and assumptions that may impact compensation decisions.

Consider changing how employees are compensated

CPA firms may also find that compensation decisions are being made based on hours worked rather than results achieved. Those in charge of compensation may decide that those who are on alternative schedules deserve lower pay, even if they are exemplary workers. This misperception could affect women on alternative schedules.


The advantages of making efforts to achieve equitable pay are clear. Not only do such efforts bring in new perspectives and experiences, they also demonstrate an organization's commitment to fairness and inclusion.

How individuals can ensure they're paid what they're worth

It's easier to ensure you're getting the compensation you deserve if you are able to recognize and articulate your own value. Another important factor is being able to negotiate in any compensation discussion. Many professionals accept compensation decisions as final offers, when they are often just part of a negotiation. With that in mind, put these best practices to work:

  • Benchmark your compensation against the averages for a similar position nationally and in your marketplace. You can find this information in the Robert Half Salary Guides and elsewhere.
  • Understand your organization's compensation system. How are compensation decisions made? Who is making the decisions — a compensation committee, the managing partners, an executive committee, etc.? Learn the leadership attributes and competencies that are valued by your organization. This information will help you position yourself and align your performance with what the organization is seeking when you are discussing bonuses, pay increases, and promotions.
  • Keep a record of your accomplishments. It's a good idea to maintain an ongoing list of your achievements, along with how each one benefited the organization. Compiling this list is a great confidence booster, and it will help you discuss your value before any review or when asking for a raise or promotion.
  • Ask for constructive feedback from your reviewers so you can build on your past performance and understand how you can better position yourself for advancement.
  • Consider asking your supervisor about your chances for promotion. Your supervisor may not be aware of your desire to move up or may have advice to help speed your advancement.
  • Find a sponsor who can advocate on your behalf when promotions or compensation are being discussed. Learn more about what sponsors do and how they can significantly impact your career in the PCPS CPA Firm Sponsorship Success Toolkit.
  • Negotiate for equitable pay for a modified work arrangement by preparing a case to present to your organization's leaders. It should include your findings on local and national compensation for similar jobs; a plan for your modified work arrangement and how it could impact your compensation; and a discussion of your strengths and your contributions to the organization.

Source: Best Practices for Preventing Gender Pay Disparity, a guide from the AICPA Women's Initiatives Executive Committee.

About the author

Yasmine El-Ramly, CPA/CITP, CGMA, is senior technical manager—Firm Services & Global Alliances for the Association of International Certified Professional Accountants in North Carolina.

To comment on this article or to suggest an idea for another article, contact Courtney Vien, a JofA senior editor, at or 919-402-4125.

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