Statement from Wesley Walden, Managing Partner, McKinsey & Company, Australia and New Zealand.
We welcome public pay gap reporting and the additional focus it will place on addressing the drivers of pay gaps at an organisational and national level. Our gender pay gap is simply not where it needs to be. It highlights the challenge we continue to face in reaching gender balance at all levels of our firm in Australia and New Zealand, particularly in our leadership, despite many years of work attracting, growing and developing women talent. Reducing and ultimately closing the gender pay gap remains a top priority – I genuinely believe this is core to our dual mission to attract and retain the best talent, and to help our clients make distinctive, lasting, and substantial improvements in their performance.
Without denying the significant work we have ahead of us, it is worth noting that we have made real progress. In 2023 in our consulting community, we achieved 54% women representation in recruiting and overall gender-balanced advancements, in a very competitive market for our senior women talent. In the last decade in Australia and New Zealand, we grew women partner representation from 7% to 20%, and women consulting representation from 25% to 40%. We’ve been experimenting with a lot of different solutions to further accelerate this progress – particularly within our leadership, given that it can take up to 15 years to develop a Partner inhouse.
McKinsey is committed to advancing diversity and inclusion in our own firm, for our clients, and in broader society. We are committed to preserving an equal and fair workplace, which includes creating opportunities for all our colleagues to grow and advance in their careers.
27th February, 2024.
Introduction to company gender pay gaps and reporting
Australian companies with 100 or more employees are legally required to calculate and report their gender pay gap data to the Australian Government’s Workplace Gender Equity Agency (WGEA). For the first time in 2024, WGEA is reporting company-specific gender pay gap figures publicly, beginning with the median gender pay gap figures of private sector companies in February 2024. From 2025, WGEA will begin publicly reporting the mean gender pay gap of Australian companies with 100 or more employees.
The median gender pay gap is expressed as the percentage difference between women’s and men’s earnings, and describes the figure in the middle of the dataset. The mean gender pay gap is the difference in the average earnings of all men and women across a workforce, expressed as a percentage of the men’s average earnings.1
WGEA is also publishing the gender composition and average remuneration pay per quartile of each company.
Pay Equity
The company gender pay gap is not the same as a like-for-like pay gap, or unequal pay, which refers to paying men and women differently for performing the same work. We are committed to equal pay for equal work and have processes in place to help ensure pay equity. Central to our pay equity approach are objective benchmarking and market insights from multiple external sources, as well as robust processes that ensure all colleagues are paid equitably throughout their careers. We also use third-party pay equity tools to provide an objective evaluation of, and feedback on, McKinsey’s compensation structures.
Our commitment to diversity and inclusion
We are committed to our Diversity and Inclusion (D&I) efforts. Our collective D&I efforts include producing cutting-edge knowledge, building value-adding partnerships, ensuring supplier diversity, and conducting pro bono work. With our best-in-class partners across the globe, we share a commitment to expand economic opportunity and support communities. Our broad portfolio of D&I research continues to be a leading voice on the subject and catalyses change across industries.
We also partnered with the World Economic Forum to launch the Global Parity Alliance, a cross-industry group of companies taking action to accelerate D&I in the workplace and beyond.
In Australia and New Zealand (ANZ), we have committed to achieving an aspiration of gender balanced representation overall, and are making progress on women representation in our Partner group, which has grown from 7% to 20% in the last decade.2
This aspiration drives our gender equality strategy in ANZ, which is underpinned by three central drivers; attraction, retention and advancement. Our strategy is achieved through five pillars of action; Transparency & Trust, Connectivity, Sponsorship & Mentorship, Flexibility and Talent Attraction, and is enabled through our local Gender Equality Leadership team.
We aim to foster an environment that is distinctive and inclusive, and measure our progress toward building teams that reflect the diversity of our clients, the communities in which we work, and society.
2023 McKinsey & Company Australia and New Zealand Office figures and drivers
For the 2022 – 2023 WGEA reporting period, our median total company pay gap is 38.3%, and our median base salary company pay gap is 33.4%.
The chart below divides the total remuneration full-time equivalent pay of all employees into four equal quartiles. The proportionately larger representation of men in the upper quartile and the proportionately larger representation of women in the lower quartile demonstrate the two core drivers of our firm’s pay gap.
WGEA gender composition by pay quartile for McKinsey & Company, 2022-23.
We recognise our gender pay gap also reflects a national trend where there is more progress to make on gender-dominated job groups, to further close the gender pay gap. For our firm, this is particularly prevalent in the high representation of women in our professional support community. We continue to work with the broader Australian corporate community, including as a Founding Member of Champions of Change, to improve societal drivers of gender inequality, which contribute to the overrepresentation of women in lower-paying job groups, and widen the gender pay gaps of many companies and organisations.
Our progress and looking ahead
Closing the gap takes a long-term commitment and achieving gender parity at all levels of our firm remains a top priority for us. Our research has consistently demonstrated the performance benefits of a diverse workforce, and diverse perspectives in our teams help us to better understand and support our clients, innovate, and manage risk.
Each of the three central drivers in our gender equality strategy are targeted at balancing gender representation at all levels of our firm, particularly at a senior level. Over time, the continued success of this program will result in closing our gender pay gap.
Through a range of initiatives, including our Women’s Internship & Scholarship program, Associate-level female referral campaign and Women in Leadership Forum, we achieved overall gender balance in recruiting of our consultant community in 2023.
We are also proud of our Connectivity and Flexibility programs. We hosted 35+ women’s connectivity events throughout 2023, including company-wide and cohort-based events. Our Flexibility program comprises formal and informal flexibility options, including part-time programs and support initiatives, ramp-on-ramp-off support for working parents and the integration of flexibility conversations into team kick-off meetings. This suite of offerings has helped us close the gender gap in retention of our consulting community, to a 3 percentage point gender difference, in favour of men.
Our Sponsorship and Mentorship program is designed to support all colleagues to thrive and advance, and we conduct an annual analysis of our firm-wide Mentorship, Apprenticeship and Sponsorship Survey to determine any gaps in experiences between gender. This analysis has informed a range of new initiatives in 2023, including sponsorship and mentorship learning events and sponsorship and mentorship coaching, detailing examples of how our women and men prefer to differently receive support. These initiatives have helped us achieve overall gender-balanced advancement in our consultant community in 2023.
We will continue to build on the initiatives under our 2024 gender equality strategy as we work towards gender balance at all levels of our firm.