Overview
In partnership with the Bankwest Curtin Economics Centre (BCEC), the Agency uncovers new insights about gender pay gaps in Australian workplaces. Every year since 2016, BCEC has produced a report analysing the Agency’s datasets to explore trends and identify policies and practices that work to address gender inequality in the workplace.
Data collected over five years has revealed critical actions organisations can take to address pay equity, achieve a more gender balanced workforce and ultimately, benefit the bottom line.
Critical actions
Conduct a pay gap analysis
Each year, the series has highlighted that the gender pay gap remains a persistent and concerning feature of the Australian labour market. Despite advancements in women’s educational attainment and workforce participation, as well as the introduction of anti-discrimination legislation, the national gender pay gap has hovered between 14% and 19% for the past two decades.[1] Although women are progressing faster into management and leadership roles, the data shows that systemic gender pay gaps persist, and are higher in senior leadership.
The 2016 report recommends that organisations conduct a pay gap analysis to target and reduce gaps. This involves auditing the current employee pool’s remuneration to uncover any cases of unequal pay, as well as differences between the average earnings of men and women across different position levels and the organisation overall.
In 2018, the series offers some encouragement that Australian businesses are taking the issue of gender pay equity seriously, with more Australian organisations than ever before seeking to measure their pay differences and review their remuneration policies. It notes that when analysing pay roll data, organisations should review both base salaries and discretionary pay
Respond to the pay gap analysis
Measuring gender pay gaps is not enough—organisations should act on their pay equity outcomes to make a positive difference.
Encouragingly, the 2018 report found that more than half of those organisations that conducted a pay gap analysis also took definitive action in light of the results. The most common type of action to take was to report to the executive, followed by reviewing performance pay.
It also found that more organisations than ever before are implementing specific actions to address cases of unequal pay, nearly doubling from 12.3% to 21% in the two years to 2017 among companies that undertook pay audits.
Importantly, the report highlights that pay equity actions are more effective in combination than in isolation. For example:
- an organisational commitment to correct like-for-like pay gaps is three times as effective in reducing overall gender pay gaps when combined with a commitment to report pay outcomes to the executive or company board
- reviews of performance ratings and pay processes are shown to be more effective when combined with executives and board reporting.
Introduce flexible work policies
The 2019 report showcases a number of workplace policies that have proven key to ensuring women continue to progress into senior positions and narrowing the gender pay gap.
In particular, flexible workplace policies and employer-funded paid parental leave schemes are integral to retaining female staff members during and after pregnancy. Employer-provided onsite childcare also increases the retention of female managers by almost one-fifth (18.9%)
Increase the representation of women in leadership
The BCEC series uncovers critical evidence of the importance of female representation in senior leadership roles—not only to reduce gender pay gaps but to improve company profitability and productivity.
In 2016 and 2017, the research shows that increasing the representation of women in executive leadership roles is associated with declining gender pay gaps:
- having equal representation of women on governing boards leads to a 6.3 percentage point reduction in the gender pay gap for full-time managers
- organisations with balanced representation of women in executive leadership roles have pay gaps half the size of those with the least representation of women in leadership.
Reports in 2018 and 2019 build on these findings, highlighting the critical role of leadership in decision-making and driving organisational change towards gender equity. Importantly, the 2019 report finds that:
- women are now progressing into management roles at a faster rate than men. If this growth continues, it would take just two decades for women to have equal representation in full-time management positions
- for the top spot of CEO, we will not see an equal share of women until the turn of the next century – some 80 years away.
Critically, in 2020, the series delivered a clear message:
More women in key decision making positions delivers better company performance, greater productivity and greater profitability.
The research analyses changes in the gender composition of leadership structures within a company and links these to company performance. It demonstrates that increasing the representation of women across each of the key leadership roles in a company added company market value of between $52m and $70m per year for an average sized organisation. These findings are statistically significant, meaning the association between women in leadership and business performance is causal.
Despite this, on average women remain under-represented in senior management. The latest WGEA data confirms that only 14.1% of board chairs are women, with very little change over the last six years. Among management tiers, women are more likely to hold lower level line management roles than senior leadership positions. The research findings in this report demonstrate clearly that gender diversity in leadership is not just a matter of fairness but a commercial imperative.
