There is a “strong and convincing relationship” between employers measuring the gender pay gap in an organisation and reporting it to its leadership (as well as taking action on those findings) in reducing gender pay gaps, a recent report demonstrates.
The report, Gender Equity Insights 2018: Inside Australia’s Gender Pay Gap, is a collaboration between the Workplace Gender Equality Agency (WGEA) and the Bankwest Curtin Economics Centre (BCEC) at Curtin University’s business school.
WGEA’s Director, Libby Lyons has said:
This [R]eport backs up with hard data … that organisational gender pay gaps do not close themselves. They must be quantified, understood, acted upon, monitored and taken responsibility for at the most senior levels of our workplaces.
A commitment to correct like-for-like gender pay gaps was found to be three times more effective when combined with a commitment to report pay gap data to the Executive or Board.
The Report’s key findings are based on data reported by 14 million employees and 11,000 employers over the 2016-2017 period.
1. More organisations taking pay equity seriously
More Australian employers than ever before are taking pay equity seriously, with the following changes from 2014 to 2017:
- Organisations with a formal remuneration policy or strategy increased by 10 percentage points (from 48.9% to 58.5%)
- Organisations conducting a pay gap analysis increased by 14 percentage points (from 24.0% to 37.7%).
2. Top-tier managers’ salaries and discretionary pay re-balancing
The gender pay gap in top-tier managerial positions reduced by around 5% in those organisations which took a gender pay gap audit and acted on the results. Analysing, taking action and increasing the fairness in discretionary pay helps to bring men’s and women’s salaries more into line. Male top-tier managers’ salaries decreased by an average of almost $4,000 and female top-tier managers’ salaries increased by around $24,000 in those organisations.
3. Reporting gender pay gap audits to leadership critical in driving down gender pay gaps
One in four companies reported their pay gap audits to the Executive and 13.9% presented these to their Board. Companies that took actions to correct like-for-like gender pay gaps, combined with a commitment to reporting pay gaps at Executive and Board level, resulted in:
- Actions to correct like-for-like gender pay gaps being three times as effective in reducing overall pay inequities
- A reduction in the organisation-wide gender pay gap by an average of 3.3 percentage points in 2016-2017 alone
- Managerial gender gaps in total remuneration falling by nearly 13 percentage points between 2015-16 and 2016-17.
4. Female-dominated industries lagging behind
The mining and finance industries are leading by example. Almost two-thirds of organisations in the finance and mining sectors undertook a pay equity audit, compared to around 20 per cent in the female-dominated health and education sectors.
“Measurement combined with action and accountability is the trifecta that drives the strongest improvements in pay equity outcomes. ” said Professor Alan Duncan (Director, BCEC).
“Actions do make a difference in promoting greater gender pay equity, but more so when outcomes are ‘owned’ by organisational leadership,” he said.
Read the Report and check out how your industry fares. Is the leadership in your organisation tackling the gender pay gap head on?
Celebrating International Women’s Day and embracing change
Lisa Christy, Regional HR Director at Wolters Kluwer, has welcomed the social transformation and individual contributions that celebrating International Women’s Day and ‘Press for Progress’ encourage.
“While collective consciousness is integral to much needed social transformation, we all have a role to play in accelerating ‘Progress’. For every individual that contribution will be different, but all leads us in the same direction,” Ms Christy said.
Ms Christy provided examples of how organisational leaders can foster this progress, such as mentoring or sponsoring a female in their career, or making hiring, promotion or pay decisions based on talent (without bias), providing flexibility to balance work and life successfully, and better understanding your people and asking ‘how are you really doing?’.
On the issue of pay parity, Ms Christy said, “I will further ‘Press for Progress’ by educating and influencing networks, executives and other decision-makers about gender equity opportunities, so they approach their work and family fully aware of unconscious bias and its impact on women (sisters, daughters, mothers, friends) all over the world.”