Less than a week after KPMG announced it would be setting targets to improve the socio-economic diversity of its leaders, PwC has published its socio-economic pay gap for the first time as part of its FY21 Annual Report.
The analysis, which is based on information shared by 80% of PwC staff on the occupation of their highest-earning parent, shows that the median socio-economic pay gap including partners was 12.1%. This figure is higher than the firm’s median gender and ethnicity pay gaps, despite socio-economic background not being a protected characteristic in the Equality Act.
For many organisations developing a social mobility strategy, understanding what data to gather to be able to report on any pay gap can be difficult. The Social Mobility Commission, which is the independent statutory body responsible for advising the government on how to improve social mobility in England, says that the key question to ask is this:
What was the occupation of your main household earner when you were about aged 14?
- Modern professional & traditional professional occupations such as: teacher, nurse, physiotherapist, social worker, musician, police officer (sergeant or above), software designer, accountant, solicitor, medical practitioner, scientist, civil/mechanical engineer.
- Senior, middle or junior managers or administrators such as: finance manager, chief executive, large business owner, office manager, retail manager, bank manager, restaurant manager, warehouse manager.
- Clerical and intermediate occupations such as: secretary, personal assistant, call centre agent, clerical worker, nursery nurse.
- Technical and craft occupations such as: motor mechanic, plumber, printer, electrician, gardener, train driver.
- Routine, semi-routine manual and service occupations such as: postal worker, machine operative, security guard, caretaker, farmworker, catering assistant, sales assistant, HGV driver, cleaner, porter, packer, labourer, waiter/waitress, bar staff.
- Long-term unemployed (claimed Jobseeker’s Allowance or earlier unemployment benefit for more than a year).
- Small business owners who employed less than 25 people such as: corner shop owners, small plumbing companies, retail shop owner, single restaurant or cafe owner, taxi owner, garage owner.
- Other such as: retired, this question does not apply to me, I don’t know.
- I prefer not to say.
By analysing the answers to this question and excluding those who answered “Other” or “I prefer not to say”, socio-economic background can be reported by employers in three groups:
- Professional backgrounds – modern professional & traditional occupations; senior or junior managers or administrators.
- Intermediate backgrounds – clerical and intermediate occupations; small business owners.
- Lower socio-economic backgrounds – technical and craft occupations; routine, semi-routine manual and service occupations; long-term unemployed.
In my view, collecting accurate data is one of the best ways to start addressing unseen barriers to progression. However, interestingly, when PwC asked the above question, disclosure of data was higher among senior rather than junior staff. To me, this really emphasises the importance of promoting social mobility within organisations and being clear through policy and practice that individuals will not be treated unfairly because of their socio-economic background and will not be prejudiced by sharing that information.
PwC has been ranked number one in the Social Mobility Foundation’s Employer Index and has a comprehensive action plan for improving social mobility which employers in other industries should take note of. However, despite its extensive range of initiatives, it is still the case that only 14% of its employees come from what the Social Mobility Commission deems to be a lower socio-economic background, compared to 39% of the workforce in England.
Whilst the social mobility conversation is gaining momentum, it is clear to me that it will be a very long one.
If you would like a discussion about improving social mobility in your organisation then please do get in touch.