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The benefits of gender pay gap transparency for women, men and companies

All is not equal in Australian pay, which was recently revealed for many workplaces.

All is not equal in Australian pay, which was recently revealed for many workplaces. Photo: Getty

From next month, workers around Australia will find out if there is a gender pay gap in their workplace.

Experts say the change is necessary for progress to be made.

The Workplace Gender Equality Agency (WGEA) will publish the gender pay gaps for every Australian employer with 100 or more employees on February 27.

The findings will be available to the public on WGEA’s Data Explorer.

Dr Fiona Macdonald, Centre for Future Work industrial and social policy director, said the reforms coming into action next month will help end pay secrecy.

Workers will be given insights into the state of pay at their companies, and may also feel more confident discussing pay with colleagues.

“Pay secrecy basically holds down wages for women,” she said.

“We know that gender pay gap actually applies within organisations where men in jobs with similar skills requirements … do earn more, and if that’s not known … that gives people less capacity to actually challenge that.”

The Australian Bureau of Statistics estimates the gender pay gap is 13 per cent.

Meanwhile, WGEA found the average total remuneration gender pay gap, which encompasses all employee types including part-time and casual workers, sits at 21.7 per cent.

This means women in Australia are earning an average of $26,393 less per year than men.

Women are also set to retire with a much smaller nest egg than men, with 2023 research by The Australia Institute’s Centre for Future Work finding women earn $136,000 less in superannuation over their working lives than their male counterparts.

Lower pay and smaller retirement savings could be a factor behind women aged over 55 being one of the fastest-growing homeless demographics in the country.

Men and employers to benefit from pay transparency

Careers hub Work180 founder Gemma Lloyd said the WGEA reforms are necessary to address the gender pay gap, which affects men as well as women and the wider economy.

“While men may win when it comes to their pay, the gender pay gap perpetuates harmful gender norms and expectations that ultimately limit their choices and opportunities as well,” Lloyd said.

“It can also contribute to work-life balance challenges, as men may feel pressured to prioritise work over family responsibilities.”

Australian women spend 81 per cent more time doing unpaid domestic and care work than men, Centre for Future Work found.

Next month’s changes could also be good news for employers to assure workers they are being paid fairly.

Gartner HR Advisory APAC senior principal Jasleen Kaur said with the pay gap, perception is worse than reality; currently only one in seven employees believe their organisation is making a credible effort to address pay gaps.

“In the absence of transparency, employees will consider pay gap to be worse than it actually is,” Kaur said.

“This perception then leads to a negative impact on intent to stay. Hence, pay transparency and open communication work in the favour of most companies, as long as the communication is well managed.”

How to address pay gaps in your workplace

If you discover a gender pay gap exists within your organisation next month, Macdonald said it’s important to work together with your colleagues to seek answers.

‘‘I think a good thing would be for people to collectively say to their executives in their organisation, or their managers … ‘Can you tell us why there’s this pay gap?’’’ she said.

If you’re told the gap is due to factors such as performance bonuses, question why your workplace system is producing those differences, and bring in your union to help tackle the issue.

Lloyd said if you discover your employer has a large gender pay gap, the most important thing to look for is a transparent action plan that the employer, with specific steps to address the gap.

“The plan should include managing recruitment funnels, as well as promotional opportunities, to ensure processes are equitable,” she said.

“If your employer has a large gap with no intention of closing it, it’s time to look elsewhere.”

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