Opinion hour: Shining a light on the gender pay gap

Last week, the Workplace Gender Equality Agency (WGEA) published its first ever gender pay gap data for companies with more than 100 employees, and the numbers aren’t pretty.

Men earn more than women across every industry in Australia. 61.6% of employers have a gender pay gap that favours men, while more than half of employers have a gender pay gap over 9% (within 5% is considered a “neutral” variance in pay rates).

WGEA figures put the overall difference between the average earnings of men and women at 21.7%, when overtime, bonuses, and additional payments are factored in alongside base salaries. Many of the country’s biggest and brightest companies have gaps well above this national average, some as high as 50-70%.

Add to this that nearly 80% of CEOs in Australia are male and the picture looks less than savoury for working women.

How about some good news

There are some encouraging figures in the data. The national gender pay gap has been going down for more than 10 years, but the sluggish decline was one of the reasons behind legislation to mandate employers with 100+ employees to report their gender pay gap figures.

The data comes from nearly 5,000 private businesses and the Minister for Women, Katy Gallagher, said its release “marks a historic step towards transparency and accountability in addressing gender inequality”.

Just over 30% of employers had a gender pay gap of 5% or lower and 8.3% had a pay gap that favoured women - mostly businesses in the healthcare and social assistance sectors.

Employers in female-dominated industries report smaller pay gaps, and companies with female leadership have less pay variance and gender gaps that are closer to the acceptable range.

What we are seeing in the field

Taken as a whole, these figures are stark, but not all are surprising - given some of the biggest gaps are found in industries that have far less women working in them than men, e.g. construction and mining.

Other sectors typically have a much larger proportion of men occupying higher paying roles, e.g. finance and insurance, or larger numbers of women working in lower-paid areas.

As Minister Gallagher said, one of the key drivers of publishing the data is to shine a light on the industries and companies that have persistent gender pay gaps, so there will likely be a public push to rectify salary discrepancies.

Amendments to the Fair Work Act banning pay secrecy clauses has encouraged people to discuss remuneration and for companies to be more transparent about what they are paying people.

Employees - both men and women - are also willing to leave organisations that don’t address gender pay inequities.

This all adds up to some compelling reasons to analyse your business’ pay disparities (even if you are an employer with fewer than 100 employees) and create fair and equitable salary ranges for your team members.

A benchmark longitudinal study from the Harvard Business Review examined the gender pay gap in Denmark before and after their mandatory reporting legislation passed in 2006. Results show a 7% reduction in gender pay gap within 2 years and companies also saw an overall 2.8% decrease in their wage bill, and increased transparency did not negatively impact their net income. Win-win.

Practical tips to address gender pay gaps in your company

Obviously, if employees have equal experience and responsibility, then their remuneration should be the same. Equal pay for equal work has been a legal requirement in Australia since 1969.

Here are some ways that you can help with transparency and bringing men’s and women’s pay onto an equal footing:

• Publish salary ranges in job ads - this is good practice, helping your job applicants and employees see your pay rates (irrespective of gender). It also helps screen out applicants who may not be interested in the role because of the salary
• Complete structured annual remuneration review cycles, so you and your people know they are being paid fairly.
• Use salary benchmarking (both within the organisation and with the wider industry).
• Identify and foster female high performers from a junior level to empower them to grow and stay with the business.
• Implement initiatives to assist females going on or returning from maternity leave to ensure that they’re no worse off in terms of salary
• Encourage more flexibility in your working practices to allow women to return to work sooner.
• Check for biases when promoting staff - research has shown that women are less likely to be promoted to high-paying roles and are often given less challenging roles because of stereotyping and unconscious bias.
• Encourage men to be more open about their personal responsibilities, which over time will hopefully lead to men and women sharing the load more at home.

If you need any help with strategies for reducing your gender pay gaps or getting remuneration right for all your team, get in touch with MyHR.