An inside look at the recent enactment of AB-168 and the Bay Area’s accounting and finance profession
By: Mike Tomasello, Founding Partner, DeWinter Partners
As many of you know, on Thursday, October 12, Governor Jerry Brown executed Assembly Bill No. 168. One can argue whether California has led efforts for equal rights in the workplace or not. AB-168 is an attempt to address and eliminate demographic wage gaps by prohibiting employers from requesting a candidate's salary history. Effective January 1, 2018, California employers are prohibited from requesting a candidate's salary history. Additionally, the bill requires employers to provide projected salary ranges for open job opportunities.
With a little under three months to revise current hiring processes and salary negotiation strategies, many employers found themselves with more questions than answers to ensure their organizations adhere to the state’s revised Labor Code without undermining their current hiring strategy. As an employer who works with and for employers across the Bay area, our team at the DeWinter Group immediately rang our labor attorneys to assess the situation and update our internal recruiting processes to ensure compliance for both the DeWinter Group, as well as our clients. After all was said and done, we still were left asking ourselves two major questions. Does a wage gap exist for accounting and finance professionals? Will AB-168 truly eliminate demographic-based wage gaps?
Gender-based Wage Gaps within Accounting and Finance Across the Bay Area
Over the past 17+ years, I have worked with thousands of male and female accounting and finance professionals from senior-level staff to executives. As a recruiter it is (or better said was prior to October) my job to understand where professionals stood with regards to salary, skillset, experience, and credibility to ensure each ‘match’ I made with an employer was ideal for both parties. When asked the question, ‘Do you see an apparent wage gap between females and their male counterparts in the accounting or finance profession?’ my answer is yes. According to the IMA's 2016 US Salary Survey, female accountants make on average 80% of what their male peers make in the West. Additionally, many public accounting firms have published similar statistics. PwC reported a ‘13.7% mean gender pay gap’ and Deloitte reported an 18.2% gender pay gap.
Now in response to the numbers (we are numbers people here), we decided to take a look at our own statistics obtained from placements made with reputable companies in the Bay Area over the past year. Reviewing the gender, function and seniority from over 300 placements, we found on average women working within the accounting function received higher offers than males. Additionally, there was approximately a 1% wage gap between males and females placed into finance roles. We also witnessed an increase in the number of women at managerial levels within the accounting and finance function over previous years.
Although our findings contradict most data sets, including those we made reference to previously, we were not shocked with what we found because it is the result of consistent and objective business practices. The DeWinter Group’s placement data demonstrates that our team is keenly aware of the issue of diversity in the workforce, a core value at the DeWinter Group. Additionally, when working with clients, we provide objective insight throughout the salary negotiation process which aligns with the candidate’s skillset and experience, as opposed to salary history and gender. As a result, our position as an unbiased intermediary agent between employers and job seekers legitimately enabled us to smooth the gender wage gap which otherwise exists within the market.
Will AB-168 truly eliminate demographic-based wage gaps?
When asked ‘Will AB-168 eliminate demographic-based wage gaps?’, we feel as though AB-168 will help to raise awareness of the issue and enforce accountability. The onus now falls on the employer to justify why they are offering a potential candidate the salary they are regardless of gender. This means hiring managers and internal recruiters may no longer simply present a salary offer based on an employee’s previous salary. They must do the legwork to understand the skillsets of all of their employees and assign a value to these skillsets.
What is the major issue for women working within accounting and finance across the Bay area if not the pay gap?
The bigger question that needs to be addressed for women working in accounting and finance functions in the Bay Area is ‘What can be done to help women climb the corporate ladder and overcome gender discrimination as they approach executive ranks?’ Fact, executive-level positions within the accounting and finance profession are predominantly weighted towards men. A tough problem to solve with legislation without forcefully imposing gender-based minimum employment percentages. Our hope is that this trend will equalize as women at managerial levels move into executive roles and impact hiring decisions from the top down. In the next DeWinter Partners’ blog article we will expand upon this the topic of executive advancement for women within the accounting and finance profession.
To learn more about the DeWinter Group’s services or get in touch with a dedicated recruiter, visit https://www.dewintergroup.com/services.