Both the UK and US recently instituted new initiatives to close the gender pay gap. Is it time Australia stepped up its game?
The UK will be naming and shaming the 1,500 employers who failed to report their gender pay gap by the 4 April deadline. Not only will these organisations face public admonishment, but they are also subject to fines and legal action for not handing over their data.
The legislation, introduced last year, requires all British companies – whether public private or charitable – with over 250 employees, to report the disparity in the hourly pay gap between men and women. They are also required to provide information pertaining to bonuses and the number of men and women per business unit.
Of the employers who did submit their data, 80 per cent pay men more than women. No sector reported paying women a higher average salary than men.
Across the pond, a US appeals court has made it illegal for women to be paid less than men based on their previous salary. Given that women are likely to be paid less to begin with, this “excuse” for paying women less initiates a gender pay gap into motion.
So what is Australia doing to close the gap?
Head start
Well, to begin with, our gender pay gap isn’t as wide – we’re currently sitting at 15.3 per cent, whereas the UK is at 18.4 per cent, and the US at a more sizeable 21 per cent.
Secondly, Australia already has a similar reporting system in place to that of the UK. Australian companies are required to disclose their gender pay gaps to the Workplace Gender Equality Agency annually.
But if we don’t want to be overtaken, we could be doing more.
Better transparency?
The Australian arms of two private professional services companies Ernst and Young and PwC recently made the move to be transparent about their pay gaps. PwC’s current gap is 12.3 per cent, which includes partners. On a like for like basis per role, however, the gap is 0.3 per cent.
Interestingly, Ernst and Young’s firm wide average differs significantly from its partner level gap – 10 per cent and 14.9 per cent respectively, which CEO Tony Johnston says is a reflection that there are more men in senior partner positions than women. This is perhaps, more telling – women are clearly not granted the same opportunities as men.
In an Economist article it was suggested that companies look “behind the numbers” to identify where the disparity in their organisation lies.
“What companies really need to find out is whether they are hiring equitably, paying equitably and are offering equitable opportunities to advance,” says Brian Levine, partner and innovation leader at US based human resources consultancy, Mercer.
One of the areas Australian organisations need to focus on is the “motherhood penalty”. Data from he Diversity Council of Australia says the influence of time off from working on women’s careers has more than doubled in a 10 year period. What’s more, one in two mothers say they were discriminated against at some point, either while pregnant, on maternity leave or once they returned to their jobs.
If we want to close the gender pay gap we need to be looking more closely at the culturally ingrained drivers.
Hear firsthand how organisations are changing mindsets and pressing for gender equity in the workplace at the AHRI Inclusion and Diversity Conference in Sydney on 3 May.
If on a like for like basis per role within PwC the pay gap is 0.3 per cent, I find it hard to see where the pay gap is.
I have done our UK Gender Pay Gap reporting & i’d have to say that the use of averages across all employees is absolute nonsense. Average pay for companies like ours where there a lot of blue collar men show females being paid more than 10% more than men on average, but companies that have a lot of blue collar female employees will have the reverse. What is really important is “Equal Pay for Equal Work – ensuring men & women doing the same type of job are paid the same” not some nosiness average. Unfortunately yet another case of… Read more »
Agree with Mark ‘s comments – we will be surprise by the pay gap if we compare like for like. The labour market in Australia is just to competitive to determine wages on the broad groupings as per the WGEA reporting. Not denying that there is a pay gap and that there is work to be done but it is not as big as what gets reported. Maybe some discussion needs to be had with WGEA in terms of their reporting categories.
The largest pay inequality we see is the use of incremental pay systems where the new employee starts 15% or more below the average even if fully competent while the less competent sits on +15% I.e. 30% difference. Gender equality is more likely in the recruitment or appointment bias. This exists largely because firstly the contributing element (position) isn’t designed In a quantifiable way and neither is the matching of the applicants (recruitment or assessment of incumbents). We say people are our most important asset but would we acquire other assets in such an unscientific way we use to acquire… Read more »