Closing the gender pay gap

What is the gender pay gap

• Gender discrimination  
• Care, family and workforce participation  
• The type of job, taking into account occupational and industrial segregation¹

How big is the gender pay gap?

Again, there isn’t a simple answer to this one. It’s currently somewhere between 13 per cent and 21.7 per cent depending on which data you use.  
 
In Australia for example, many use the Australia Bureau of Statistics (ABS) figure, which is currently at 13 per cent, in New Zealand this figure sits at 8.6 per cent². This means the average salary of men in Australia is more than $13,000 greater per year than women. Which, over the course of a working life, is more than half a million dollars. The ABS figures however, don’t take into account overtime, superannuation or any junior or part-time roles in a business.  
 
The figures reported by the WGEA do include all of this data, together with bonuses and casual workers at all levels of the business. Recently the WGEA gap is reported as 21.7 per cent, meaning for every $1 men earn on average in Australia, women make 78 cents. That becomes a gap of $26,393 over the course of a year, or $1 million over the course of a 40-year career. The gap varies between states and industries, and between the private and public sector, but there is always a gap.

What causes the gender pay gap? 

There are several factors for the difference in average salaries between men and women; some of them a result of direct discrimination, others due to unconscious bias – although often even then, that lack of awareness is built on the back of ingrained stereotypes.

Women are, generally, considered more caring than men, and in practice that’s exactly how it looks in the workplace³. And this affects their pay in a number of ways. Rules around maternity and paternity leave have changed over the years, for example, the very definition has now changed to ‘primary carer’ leave removing gender from the conversation all together, however it is still women who bare the biggest brunt of starting a family. Not just in the act of maternity, but on an ongoing basis, women are more likely to make career-impacting sacrifices around their children such as taking unpaid leave or part-time work to fit around their children’s needs. But not just their children – all family members. When care of any sort is needed in the home, such as aging parents, it’s more likely to be the woman who provides it. 

This care factor influences the industries that women choose to work in as well. Female-dominated industries in the caring professions such as childcare and nursing and teaching tend to have lower wages than more male-dominated industries such as mining, construction and investment banking.

Sadly, one of the other reasons for the gender pay gap, is the lack of females in leadership positions, only 22 per cent of CEO positions in Australia are held by women, despite the fact that businesses with women in leadership positions do better⁴. Without an increase in females in leadership positions, the gap will not close, and organisations will miss out on increases in profitability and productivity.

Reason for publicly identifying organisation’s gap

Gender equality in Australia is measured through six different indicators:  

• Gender composition of the workforce  
• Gender composition of governing bodies of relevant employers  
• Equal remuneration between women and men 
• Availability and utility of employment terms, conditions and practices relating to flexible working arrangements for employees and to working arrangements supporting employees with family or caring responsibilities 
• Consultation with employees on issues concerning gender equality in the workplace  
• Sexual harassment, harassment on the grounds of sex or discrimination 

Organisations in Australia have been reporting on these indicators since 2013, and some progress has been made, however change isn’t happening fast enough. In fact, in recent years, progress in Australia has stalled indicating that employers are not following up gender pay gaps with actions to fix it. This latest reform to name the organisations alongside their reported gap hopes to improve transparency, accountability and motivate action to accelerate progress.  
 
In the UK a similar system did not close the gap straight away, but heated discussion in the public forum on big employers such as Barclays (44 per cent gap) and RyanAir (a whopping 72 per cent gap) did start to move the dial and the gap has started to narrow.

What you can do to start to close the gap

How you respond when you identify a gender gap is more important than the reporting itself. Think about how changing policies and practices in key areas, including recruitment, talent, development, training, remuneration and retention for starters.

For further ideas consider: 

• Meet your legal requirements. Governments have been creating policies to help close these genders gaps, so ensure your organisation is compliant.  
• Creating networks of advocates for gender equality can help address barriers and affect change.  
• Enhance the availability and uptake of shared parental leave.  
• Re-think or redesign part-time roles for managers.  
• Increase the share of women in leadership positions, including targets and other diversity policies.  
• This step of public reporting is just the beginning towards closing the gap. Companies have always had the gender gap data at their fingertips to start this process – but now the public has that data, too.