Is change coming? How Australia can navigate the gender pay gap

Closing the gender pay gap will be easier said than done.

Closing the gender pay gap will be easier said than done. Photo: Getty

The lid has been lifted on gender pay gaps at some of Australia’s biggest businesses, with publicly released data putting individual employers on notice for the first time.

Described by some as a ‘name and shame’ strategy, the Workplace Gender Equality Agency (WGEA) data makes it simple to search the difference between what men and women at particular companies earn overall.

And it’s illuminating, showing that in 62 per cent of large Australian companies, median gender pay gaps still land firmly in favour of men.

There is some good news, with about 30 per cent of companies close to parity, says Sommer Nisbet, general manager and solutions director for diversity, equity and inclusion consultancy TDC Global.

“However, there’s a real sentiment that once we start to include the CEO pay, which will be a compulsory reporting element from next year on, what we’re actually going to see is that might go backwards,” she said.

In Australia, 78 per cent of CEOs of large companies are men. 

The gap is narrowing, but not fast enough

Nisbet says the data is incredibly important in providing transparency.

However she cautions it doesn’t necessarily provide the full picture, and should be considered in conjunction with other data, such as the latest HILDA [Household, Income and Labour Dynamics in Australia] survey.

That survey showed the gender pay gap narrowing. 

In 2001, women who worked full-time earned an average of 79 per cent of what men made, rising to 86 per cent by 2021. For overall earnings, including part-time jobs, the gap was 75 per cent.

Nisbet says the pay gap is generally trending in the right direction. 

“What I think a lot of people feel is perhaps it’s not moving fast enough.”

Where to from here?

In the short term, Nisbet says organisations need to create opportunities for conversation, which could be as simple as a one-on-one coffee, or HR hosting a drop-in session to talk about women’s career progression.

“When there is no chance for a conversation, people fill in the gaps by making assumptions and that can really harm businesses.”

In the longer term, companies need a strategy they can use to clearly explain to shareholders, current employees and prospective employees how they are addressing the pay gap, she says.

Getting more women into the ‘big jobs’

Nisbet says the WGEA data shows that the biggest roles – and corresponding pay packets – often go to men.

“So then what happens is on an individual basis, firms can rationalise that. Well of course the CEO’s male because he’s been with the business for 20 years. Who else would know how to steer the business as well as he does with that body of knowledge?”

It’s not to say that’s wrong, Nisbet says. However there has to be space created for more women to demonstrate their talents, and take on the larger, decision-making roles. 

Hurdles ahead?

Nisbet is concerned some organisations have looked at the WGEA data and decided they are “probably at par or slightly above par”. The risk is they might just keep plodding along.

Gemma Lloyd, co-founder and CEO of jobs platform WORK180, says while things might be heading the right way, potential hurdles such as return-to-office mandates lie ahead.

“That might then start pushing more women out of the workforce,” Lloyd said.

But she hopes greater transparency around the pay gap will get employers moving. 

“Women are now empowered with this information that they haven’t had before, and they’re going to be able to hold their employers to account.”

What women really want

In its recent What Women Want report, WORK180 found 86 per cent of candidates surveyed wanted to know what potential employers were doing to reduce and remove their gender pay gap. 

Interestingly, 55 per cent of candidates surveyed said they would still apply to a company with a poor pay gap if the company could prove its commitment to closing it.

Putting their money where their mouth is

Lloyd says the reality right now is that most employers have a pay gap.

“But really what it comes down to is: Is that employer taking it seriously? Do they have a plan to close that pay gap? Does that plan include both retention strategies and hiring strategies, career development strategies?”

Lloyd hopes the WGEA data will lead to employers “actually putting their money where their mouth is, and creating a plan and following that plan and taking real action”.

Men need to be supported, in order to create change for women.

Meanwhile Erica Hatfield, who coaches parents (mostly mothers) return to work after having children, says the dial is never going to shift unless employers support both men and women to work flexibly.

That includes men being encouraged to take paid parental leave.

“If we’re not helping the men to access flexibility, then it’s always going to be the women that are doing the heavy lifting in that space when it comes to domestic care work,” Hatfield said.

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