Addressing the Gender Pay Gap

According to the Workplace Gender Equality Agency (WGEA) pay equity is when women and men who are doing work of equal or comparable value at the same standard are paid the same amount. While this seems to be fair and logical it is not happening and the pay gap is often in effect as soon as women enter the workplace to start their first job.

The pay gap has many possible effects it means women aware of unfairness are less likely to go the extra mile in their role and may leave an organisation, in the longer term it means women are more likely than men to retire with insufficient superannuation and reduced financial security.

So where does the gender pay gap stem from? According to the recently released ANZ Women’s Report Australia’s gender pay inequality is a result of three key drivers

1. Fields of study, career choices and pay gaps

The subjects men and women choose at high school and university have a significant impact on the careers they enter and the resulting incomes. Some occupations remained skewed by gender due to stereotypes about the roles men and women should follow and the flexibility offered in those roles. This means women are over-represented in lower-paid sectors of the economy.

2. The gendered nature of caring

Women have more career breaks than men as a result of taking time out to have children or assume other family responsibilities. Despite the increased availability of flexible work many women face significant barriers when considering a return to work because of the societal expectation that the men remain in full time paid work. These assumptions around breadwinning and care giving means women and men must prioritise between them.

3. Discrimination and structural bias

According to the ANZ report the main reason women earn less is simply due to discrimination, research shows women graduates entering the workforce for the first time earn four per cent less than their male counterparts for no reason at all. This pay gap widens and is most prominent in senior leadership positions.

The ANZ report suggests that these factors compound across a women’s career and mean that as many as 90 per cent of Australian women will have inadequate savings as they enter retirement.

So what can organisations do to address the pay gap and improve the imbalances women face from the moment they enter paid work until retirement?

ANZ Chief Executive Officer Mike Smith said findings in the report have prompted the bank to make diversity and gender equality initiatives a priority.

This includes a range of measures such as top-up superannuation payments, super contributions for paid and unpaid parental leave, free financnial advice for employees with limited super and access to financial planners who are specialists in the financial needs of women.

Mr Smith says that while more needs to be done to achieve full gender equality these policies are a step in the right direction for ANZ. But what can other organisations do to address the gap?

The WGEA has launched a campaign titled Equal Pay is in Your Hands, which aims to raise awareness about the gender pay gap and encourages all CEOs to conduct a gender pay gap analysis, which the WGEA says is the first step in addressing pay fairness in the workplace.

The WGEA claims that unless an organisation performs this analysis it is impossible to know the real picture with regard to gender pay rates:

“We know employers don’t set out to pay women less. But we also know – because employers tell us – that unless you regularly conduct a gender pay gap analysis, you can’t be sure there aren’t instances of women being unfairly paid less than men,” says the In your Hands website.

According to the WGEA, most CEOs who have taken action to address the gender pay gap have experiences a ‘light bulb’ moment that motivated them to identify and define the problem within their organisation and take steps to redress the balance.

Research shows that for many CEOs this light bulb moment occurs when they have a daughter. International research has shown that in organisations where a CEO has had a daughter the gender pay gap is reduced.

Leveraging this information stage one of the WGEA campaign involved sending Daughter Water to 3,000 Australian CEOs who said they hadn’t performed a gender pay analysis within their organisation. The purpose of the Daughter Water was to raise awareness and start the conversation about the gender pay gap in Australia.

The WGEA has also developed a range of free tools which decision makers within organisations can access to quantify and address their gender pay gap. The resources include targeted briefs for directors, CEOs, managers, HR practitioners and employees and can be accessed here.

According to Sex Discrimination Commissioner Liz Broderick gender equality is not a battle of the sexes or a zero sum game it is a fight for equality and a fight which men and women must wage side-by-side.

“I have often asked myself: ‘Is poverty to be the reward for a lifetime spent caring?’ This is where many women in Australia are at. Every one of us can do something in our sphere of influence to shift systems that constrain our nation’s potential,” says Ms Broderick in the ANZ report.

To read the report in full click here.

This Better Workplace Bulletin was first published in September 2015