Westpac has done it, Telstra, Woolworths, ANZ, NAB, CSR and BP are on to it, and even number-crunchers such as accountants KPMG are doing it.
So let’s do it – let’s have pay equity for women and men who are doing similar jobs.
Pay equity is not something leaders can set and forget. It requires an understanding of the data and a willingness to investigate when gaps emerge.
With many Australian businesses now regularly reporting on efforts to build better gender diversity, and boost women in leadership, there’s growing recognition that the well-documented gender pay gap also needs to be addressed.
Fortunately, the business case has never been clearer: closing the gap is about attracting and retaining the best talent, avoiding costly turnover and ensuring a return on investment for Australia’s largest cohort of higher education graduates – women.
Data released to coincide with last week’s Equal Pay Day shows there is an 18.2% difference between male and female average weekly full-time earnings, according to the Workplace Gender Equality Agency.
That figure has widened from 17.1% a year ago, and is unacceptably similar to the pay gap 20 years ago. This year’s Equal Pay Day is 66 days after the end of the financial year – that’s the amount of extra time the average woman would have to work to make the same as the average man.
Gender pay research shows the gap emerges right across the economy, in all sectors and at all levels.
Alarmingly, the pay gap actually widens the further up the ranks women climb, with AFR Boss research published in April showing senior executive women at top listed companies earn 20% less than men in similar roles. Analysis also showed senior women tended to be clustered more in lower paid support roles than in line management.
A range of structural factors contribute to the gap, including sector and occupational segregation, which means more women are working in lower paid sectors, and the impact of part-time work. The finger has also been pointed at the resources boom and women’s poor negotiating skills.
But it’s evident the problem is not confined to one sector, or women failing to ‘lean in’ and ask for pay rises. There’s certainly a gender pay gap in traditional male-dominated sectors, but one of the highest gaps of 30 per cent occurs in the financial services sector which employs many women in office-based jobs.
The good news is the spread of gender pay audits shows business leaders believe action can be taken to address the problem. The Chief Executive Women I represent believe that change has to start at the top, and we call on leaders of businesses and organisations across the country to commit to taking the single most important step in attracting and retaining talent.
BP Australia takes gender pay parity seriously, according to CFO Brooke Miller, a CEW member. BP includes a reporting tool in its annual salary review process, which shows managers the ‘gender impact’ of their decisions.
Transparency of pay scales and criteria for promotion, and auditing fixed and variable pay components are other crucial tools in addressing the gap. Organisations committed to closing the gap are also building a data base of information on pay which can help track the effects of career breaks on progression and remuneration.
While businesses use a range of approaches to monitor and eliminate the pay gap, WGEA suggests immediate steps for senior executives include: placing pay equity on the next executive team agenda; requesting your HR team conduct a pay equity analysis and report back to you; using the “Addressing pay equity” WGEA webpage; committing to developing an action plan to address any gender pay gaps identified; and including metrics on gender pay equity in your report to the Board.
Smart business leaders are recognising the pay gap is a brake on workplace effectiveness, and has serious effects across the economy.
When women earn less, they have less to spend, less to contribute to households and less to save for their retirement. And they have less incentive to stay attached to the workforce.
The upshot is their financial security is compromised at a time when most of us will self-fund our retirement after working for longer.
In the short term, the pay gap contributes to a significant waste of talent that Australian businesses simply can’t afford.
The ramped up attention to gender and pay by our top corporations is a signal that this message is beginning to be heard loud and clear.
And some of that welcome focus has been helped along, no doubt, by the advocacy of the growing number of women in senior executive ranks and on boards.