Why salary parity shouldn’t be overlooked in your company

Compared to the hairy-chested 70s and shiny-suited 80s, Australia seems like an enlightened, largely non-sexist country. Even more so compared to 1919, when the basic wage for women was set, by law, at 52% of the male one.

So the facts as they stand today may come as a surprise, or a slap in the face, if you’re a woman. According to the Workplace Gender Equality Agency (WGEA), the gender pay gap – the difference in average wages earned by men and women in Australia – stands at 17%, and has varied little in the past 20 years. 

In dollar terms, that means the average woman takes home $260 less, every week, than the average man. When you factor in total pay – things like bonuses, superannuation and paid leave, that gap rises to 21.3%, or a disturbing $27,000 a year.

And, as Libby Lyons, the director of the WGEA, points out, the further up the career ladder you go, the greater the pay gap becomes. Not to mention the opportunity gap; men and women graduate from university in equal numbers, but women earn an average $5,000 less in their first job, while just 16% of Australian CEOs are women.

"Incredibly, when you’re looking at key management personnel, the gap can be as much as $100,000 a year," Lyons says. "A study by KPMG, called ‘She’s Price(d)less – The Economics of the Gender Pay Gap’, found that the main driver of the gap in Australia today, and it’s actually become worse, is plain old discrimination and bias against women.

"I don’t think employers set out deliberately to pay less to a woman than a man, but we know that when it comes to negotiating for pay, and for bonuses, when you’re sitting opposite someone who looks and sounds the same as you, you will favour them. And the majority of managers are still men, which means men are generally treated more positively than women." In short, it seems many businesses are still operating in what we think of as outdated, chauvinistic ways. And while that 52% figure from 1919 sounds harsh, Lyons says it’s a number that’s still appallingly relevant today.

It's also one of the biggest drivers of homelessness in Australia today… it is dreadful that we're even having to talk about it.

"If we look at the amount of superannuation and retirement savings at the end of a working life, women retire with, on average, 50% less savings than men. In 2017; it’s a national shame," she says.

"It’s also one of the biggest drivers of homelessness in Australia today, and the reason women are coming back into the workforce in their sixties and seventies, because they just don’t have the money to retire on, or the assets to sell to stay afloat. It is dreadful that we’re even having to talk about it."

The WGEA is a statutory authority, established in 2012 to "address the historic disadvantage of women in the workplace", and it requires all Australian businesses to report once a year on salary parity as well as providing education and advice to employers.

Lyons believes the data it is now collecting will help the situation, because when trends are spotted her organisation, and the government, can react. "I firmly believe that if we have the data – and interestingly we’re the only country in the world collecting it in such depth and breadth – then we can drive the change," she adds. "Over the past three years, the pay gap has dropped a little each year, and if that continues we know we’re on the right track." 

Gender equality citations

The WGEA is also encouraging change by handing out Gender Equality citations to its Employers of Choice. In 2016, more than 100 organisations from a range of industries received the citation. One of those was carsales.com, an outwardly blokey business that is going above and beyond to reduce its pay gap, according to CEO Cameron McIntyre.

Its initiatives include reviewing the language used in its job advertisements, unconscious-bias training for its senior executives, and a female leadership program. "As part of our accreditation we have to measure the annual salaries for senior male and female executives, middle and lower management, and make sure that gap is either reducing or doesn’t exist," McIntyre explains.

"We started with a workforce that was 33% female, which you’d expect in a heavily automotive-skewed area, but we’re starting to see some results. In the past 12 months, 65% of the staff we’ve hired have been female, and that’s into both management and non-management positions.

At the more senior levels, the previous CEO left in March, and since then we’ve gone from 12% female to 30% of the senior management team being women. It makes no sense to me that we’re still talking about these issues in this day and age. But we all have to do what we can to make sure it isn’t an issue in the future."

One business that’s already seeing results is AECOM Australia and New Zealand, which has put its money where its morals are, assigning $1 million over the past two years specifically to closing the pay gap, according to chief executive, Lara Poloni.

Without taking proactive steps to address the gap, the differential could easily become six figures. – Lara Poloni

"The pay-gap analysis in our sector – construction and engineering – shows that graduates start on equal salaries and it remains fairly consistent for the first three to five years, then the gap starts to appear around the time that women take a break from the workplace to have children and often become the primary carer," Poloni says.

"Without taking proactive steps to address the gap at that relatively early point in a woman’s career by the time they reach key management positions, the differential could easily become six figures.

AECOM has focused on this mid-point in women’s careers to ensure they receive pay reviews while on maternity leave, are offered promotions and leadership roles while working part-time and proactively award pay increases to women when similarly qualified men negotiate their own increase.

"Many companies have gender pay equity strategies and initiatives, but not many have committed additional salary dollars to achieve them. AECOM has allocated $1 million over the past two years to close the pay gap, identifying those who are underpaid and proactively topping-up their salaries to match their male peers."

Equal Pay Day

Equal Pay Day will held in Australia on September 4th and aims to point out the number of days extra the average woman would have to work to earn the same as the average man. It equates to about 60 a year. Or, to look at it another way, how many days women effectively work for free every year.

On Equal Pay Day, supporters are asked to "take it to the streets" by:

• Asking

  Local cafés and restaurants to promote an Unhappy Hour between noon and 2pm, or after work, during which they offer women discounts on meals and drinks, equal to the gender pay gap (17%).

• Carrying

  Red purses and red bags to represent economic discrimination.

• Organising

  Information desks and activities in public areas to draw attention and get people talking.

• Encouraging

  Local shops to decorate their display windows with red purses.

• Attending

  One of the Business & Professional Women, or Security4Women events around Australia.

Ignorance no excuse

Professor Alison Sheridan, head of the Business School at the University of New England in New South Wales, also finds it incredible that in a country where we elected a female prime minister, who was paid the same by law as a man, our gender-income equality remains worse than the OECD average.

"While other countries have reduced their gender wage gaps, our glass walls have proven remarkably impervious," Sheridan says. "The undervaluing of women’s work deserves our attention; not only because it is unfair, but as recent research I have done with colleagues makes clear, it is also a drag on the Australian economy."

Sheridan says she does have some hope, though, with the number of ASX 200 directors rising from just 8% in 2009 to 25% today, and on track to hit 30% by 2018. As to what business leaders can do to get involved, WGEA’s Lyons says she encourages organisations to do their own pay-gap analysis.

"I can’t tell you the number of CEOs I’ve coerced into doing one who’ve sworn beforehand, hand on heart, that they wouldn’t have a gender pay gap, and then it’s a huge moment when they find out they have. And when they deep dive into the data and find out what’s causing it, they get the biggest shock of all," she says.

"People need to ask the question, because they don’t know what they don’t know, and once you’ve discovered what the cause of the gap is, you can start putting action into place." 

To learn more about gender pay equity and download practical information and resources to analyse and improve pay equity in your organisation, visit wgea.gov.au